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Tuesday 11 December 2018
Mexican Man Sentenced to Prison for Illegally Reentering the United StatesRead the Press Release
A Mexican man who illegally returned to the United States after being deported was sentenced December 10, 2018, to nearly three months in prison.
Jose Arenas-Aguilar, age 32, a citizen of Mexico illegally present in the United States and residing in Denver, Colorado, received the prison term after an October 2, 2018, guilty plea to one count of illegal reentry into the United States.
At the guilty plea, Arenas-Aguilar admitted he had previously been deported from the United States in April 2015 and illegally reentered the United States without the permission of the United States government. Arenas-Aguilar admitted he illegally returned to the United States in May 2015, one month after being deported. Arenas-Aguilar had also been granted a voluntary departure from the United States in September 2012. Arenas-Aguilar was found by immigration agents in September 2018 after he was charged in Floyd County, Iowa, with operating a motor vehicle while intoxicated. That case is still pending.
Arenas-Aguilar was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Arenas-Aguilar was sentenced to 88 days’ imprisonment. He must also serve a one-year term of supervised release after the prison term. There is no parole in the federal system.
Arenas-Aguilar is being held in the United States Marshal’s custody until he can be turned over to immigration officials.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-2046-CJW. Follow us on Twitter @USAO_NDIA.
Mescalero Apache Man Sentenced for Federal Assault ConvictionRead the Press Release
ALBUQUERQUE – Patrick Moquino, 39, an enrolled member of the Mescalero Apache Nation who resides in Mescalero, N.M., was sentenced today in federal court in Las Cruces, N.M., to 21 months in prison followed by 3 years of supervised release for his conviction on an assault charge.
On June 13, 2018, Moquino pled guilty to assault resulting in serious bodily injury. He admitted assaulting an Apache man on March 14, 2017, on the Mescalero Apache Indian Reservation in Otero County, N.M., by punching and kicking the victim while the victim was lying on the ground. Moquino further admitted that the victim suffered a fractured nose and head trauma as the result of the assault.
This case was investigated by the Las Cruces office of the FBI and the Mescalero Agency of the BIA’s Office of Justice Services and is being prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office.
Meridian Resident Pleads Guilty to Bribery Scheme Involving Correctional OfficerRead the Press Release
BOISE - Tiffany Culbertson, 23, of Meridian, Idaho, pleaded guilty last week to conspiracy to commit Hobbs Act extortion under official color of right, U.S. Attorney Bart M. Davis announced. Culbertson pleaded guilty in front of Senior U.S. District Judge Edward J. Lodge pursuant to a written plea agreement filed with the Court. Culbertson’s sentencing is set for February 21, 2019.
According to her plea agreement, Culbertson agreed with an Idaho Department of Correction (IDOC) inmate, Colin McIntyre, 27, of Stanfield, Oregon, to pay a correctional officer at an IDOC prison to bring in contraband cell phones. Culbertson then followed through with the plan, purchasing a cell phone and delivering it to the correctional officer, Joshua Barney, 43, of Boise, along with a bribe payment. Barney then brought the phone into the prison and delivered it to McIntyre, which was prohibited under IDOC policies.
Culbertson was one of three defendants charged by federal indictment with multiple crimes involving the bribery scheme. In prior court proceedings, co-defendants Barney and McIntyre pleaded guilty to conspiracy to commit Hobbs Act extortion under official color of right. McIntyre is set to be sentenced on February 14, 2019. Barney is set to be sentenced on February 19, 2019.
Conspiracy to commit Hobbs Act extortion under official color of right is punishable by up to 20 years imprisonment, a maximum fine of $250,000, and a term of supervised release of up to three years.
This case was investigated by the Federal Bureau of Investigation and IDOC’s Special Investigations Unit.
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McKeesport Man Sentenced to 2½ Years in Prison for Passing Counterfeit CashRead the Press Release
PITTSBURGH, Pa. - A resident of McKeesport, Pa., has been sentenced in federal court to 2½ years in prison followed by three years of supervised release and was ordered to pay $9,570.00 in restitution on his conviction of conspiracy and passing and uttering counterfeit money, United States Attorney Scott W. Brady announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Bruce M. Charles, Jr., 32.
According to information presented to the court, Charles conspired and passed counterfeit $100, $50, and $20 FRNs throughout the Western District of Pennsylvania.
Assistant United States Attorney Shardul S. Desai prosecuted this case on behalf of the government.
United States Attorney Brady commended the United States Secret Service for the investigation leading to the successful prosecution of Charles.
Marion Prison Inmate Pleads Guilty to Possessing MarijuanaRead the Press Release
Raydale R. Mitchell, 48, currently a Federal Bureau of Prisons inmate, pled guilty today in United States District Court in Benton to possessing marijuana in November 2017 in the United States Penitentiary at Marion, Illinois, when he was an inmate confined to that facility. Mitchell was charged with that offense by a Federal Grand Jury in August 2018.
Sentencing is currently set for March 20, 2019, at 10:00 a.m. at the United States Courthouse in Benton. Mitchell faces up to an additional 5 years in prison for the marijuana offense which must be imposed consecutively to the 168-month sentence for distributing heroin, imposed in 2013, that he was serving at the time he possessed the marijuana.
Mitchell was returned to the custody of the United States Marshal to await sentencing in this case.
The investigation leading to the charge in this case was conducted by the Federal Bureau of Investigation and the Federal Bureau of Prisons. The case is being prosecuted by Assistant United States Attorney James M. Cutchin.
Manchester Man Sentenced to 30 Months for Participating in Fentanyl Trafficking ConspiracyRead the Press Release
CONCORD, N.H. – Albert Gordon, 45, of Manchester, was sentenced on Monday to serve 30 months in prison for participating in a conspiracy to distribute, and possession with intent to distribute, fentanyl, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, in the course of an ongoing drug trafficking investigation that included wiretaps of certain telephones, investigating agents learned that on March 7, 2018, an individual intended to travel from New Hampshire to a location in Massachusetts to purchase fentanyl. Agents conducted surveillance in the area of the transaction and observed a hand-to-hand exchange between a known drug trafficker and the driver of the car at the driver’s side window. The vehicle left Massachusetts and agents followed it directly to New Hampshire. A New Hampshire State Trooper stopped the vehicle. During the traffic stop, the Trooper subsequently located an orange bag containing approximately 184 grams of fentanyl. Gordon admitted that another individual had asked him and his girlfriend to drive to Massachusetts to buy drugs and that they had agreed to do so.
The defendant previously pleaded guilty on August 29, 2018.
“Fentanyl is a deadly drug that continues to cause serious damage to communities throughout the Granite State,” said U.S. Attorney Murray. “Those who choose to transport fentanyl into New Hampshire face serious prison terms. Fentanyl trafficking will be prosecuted aggressively. By targeting drug traffickers and getting fentanyl off the street, we are striving to protect the lives and safety of our citizens.”
“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. “This investigation demonstrates the strength and continued commitment of our local, state and federal law enforcement partners.”
The case was a collaborative investigation that involved the Drug Enforcement Administration; the New Hampshire State Police; the Hillsborough County Sheriff’s Office; the Nashua Police Department; the Massachusetts State Police; the Massachusetts Attorney General’s Office; the New Hampshire Attorney General’s Office; the Essex County District Attorney’s Office; the Internal Revenue Service; Immigration and Customs Enforcement’s Homeland Security Investigations; United States Customs and Border Protection Boston Field Office; the United States Marshals Service; the United States Department of State’s Diplomatic Security Service; the Manchester Police Department; the Lisbon Police Department; the Littleton Police Department; the Seabrook Police Department; the Haverhill (MA) Police Department; the Methuen (MA) Police Department; the Lowell (MA) Police Department; and the Maine State Police.
The case is being prosecuted by Assistant United States Attorneys Georgiana L. Konesky, Seth R. Aframe and Debra M. Walsh.
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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Man from Mexico Charged with Methamphetamine OffensesRead the Press Release
United States Attorney Ron Parsons announced that a man from San Jose, Mexico, has been indicted by a federal grand jury for Conspiracy to Distribute a Controlled Substance and Possession with Intent to Distribute a Controlled Substance.
Heriberto Navarro Ortiz, age 32, was indicted on December 4, 2018. He appeared before U.S. Magistrate Judge Mark A. Moreno on December 7, 2018, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in federal prison and/or a $10,000,000 fine, a minimum of 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that beginning no later than November 17, 2018, Ortiz knowingly and intentionally combined, conspired, confederated, and agreed with others to knowingly and intentionally distribute and possess with intent to distribute 500 grams or more of methamphetamine. The Indictment also alleges that on November 22, 2018, Ortiz knowingly possessed with intent to distribute 500 grams or more of methamphetamine.
The charges are merely accusations and Ortiz is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Cameron J. Cook is prosecuting the case.
Ortiz was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Kinmundy, IL Man Sentenced to 6 1/2 Years in Prison for Bank FraudRead the Press Release
Alfred L. Cross, 75, of Kinmundy, IL, (originally from Mattoon, IL), was sentenced to 78 months in prison on his federal conviction on five counts of bank fraud, announced Steven D. Weinhoeft, United States Attorney for the Southern District of Illinois. The evidence presented in court established that Cross defrauded seven southern Illinois banks out of more than $500,000.
Cross pled guilty to the charges in the indictment on March 16, 2018. Facts presented at the plea hearing established that Cross opened checking accounts at the following banks: Bradford National Bank in Greenville, Illinois; Community First Bank of the Heartland in Mount Vernon, Illinois; the Farmers and Merchants National Bank in Nashville, Illinois; First Southern Bank in Carbondale, Illinois; Midland States Bank in Effingham, Illinois; State Bank of Whittington, in Benton, Illinois; and Washington Savings Bank, located in Effingham, Illinois. After these accounts had been open for a short period of time, Cross deposited into each of the accounts very large checks, ranging from $18,875 to $148,000. These checks were drawn on out-of-state bank accounts in the names of businesses that Cross controlled. At the time he deposited these checks, Cross knew there were insufficient funds in the out-of-state accounts to cover the checks. Before the checks could be returned as NSF, Cross withdrew almost all of the funds he had deposited.
Cross gave some of these funds to his relatives and used the remainder to pay for personal expenses. Cross conducted this fraud scheme from April 14, 2011, through March 25, 2015.
At sentencing, Cross asked the court to impose a lenient sentence, due to his advanced age and medical conditions. The court indicated that other factors warranted a sentence of significant prison time. Noting that Cross had 16 prior convictions, many of which were for similar conduct, the court was "not confident he can be deterred" from future criminal conduct. The court observed that Cross is "a con artist, plain and simple" who "supports himself by ripping people off."
In addition to the 6 ½ year prison sentence, the court ordered Cross to serve a five year period of supervised release and pay restitution of $111,698.98 to two of the banks he defrauded. (Restitution was not ordered for the banks that obtained judgments against Cross and/or had recovered funds they were owed by other means).
In commenting on yesterday’s sentence, U.S. Attorney Weinhoeft stated: "Cross may have conned several banks, but he couldn’t game the federal justice system. These criminals will not avoid lengthy prison sentences by pointing to their age, medical issues, or other excuses to escape responsibility for their crimes. Our office will continue to seek significant prison time for financial criminals who rip off businesses and other individuals."
The investigation was conducted by agents from the Springfield Division, Fairview Heights Resident Agency, of the Federal Bureau of Investigation ("FBI"). The case was prosecuted by Assistant United States Attorney Scott A. Verseman.
Kettering Man Pleads Guilty to Producing Child PornographyRead the Press Release
DAYTON –Matthew Jones, 44, of Kettering, Ohio, pleaded guilty in U.S. District Court to two counts of producing child pornography.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Todd Wickerham, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, Ohio Attorney General Mike DeWine, Greene County Prosecutor Stephen K. Haller, Montgomery County Prosecutor Mathias H. Heck, Jr., Kettering Police Chief Christopher N. Protsman, Xenia Police Chief Donald R. Person and members of the FBI’s Child Exploitation Task Force announced the plea entered into yesterday afternoon before U.S. District Judge Walter H. Rice.
According to court documents, in 2003 and in 2009, Jones sexually abused two, three-year-old girls and created hundreds of images of the abuse.
Jones also used computer file sharing programs to receive, possess and view images and videos of the sexual abuse of toddlers and young children.
Jones was indicted by a federal grand jury in January 2018.
Jones’ plea in federal court was the first part of a global resolution of charges involving the federal court, the Greene County Common Pleas Court and the Montgomery County Common Pleas Court. The global plea means Jones also accepts responsibility for one count of rape of a person under age 13 in Greene County and the same charge in Montgomery County, as well as two counts of sexual battery and one count of gross sexual imposition in Montgomery County.
As part of this global resolution, the Greene County Prosecutor’s Office will recommend Jones receive 15 years up to life in prison for the Greene County offense. The Montgomery County Prosecutor’s Office will recommend Jones receive 20 years up to life in prison for the Montgomery County offenses. Also as part of the resolution, Jones will serve his sentences concurrently with each other.
Each federal count of producing child pornography is punishable by 15 to 30 years in prison.
U.S. Attorney Glassman commended the investigation of this case by the FBI, Ohio Bureau of Criminal Investigation (BCI) and Kettering and Xenia police departments, as well as Assistant United States Attorneys Amy M. Smith and Dominick S. Gerace, who are prosecuting the case.
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Juneau Couple Sentenced for Roles in Drug Trafficking ConspiracyRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that a Juneau couple has been sentenced to federal prison for their roles in a drug trafficking conspiracy to distribute drugs in Juneau, Alaska.
Tiffany Spaulding, 35, of Juneau, was sentenced yesterday by Chief U.S. District Judge Timothy M. Burgess, to serve five years in prison, followed by five years of supervised release, after pleading guilty to one count of drug conspiracy. Her co-defendant, Christian Peters, 46, of Juneau, was previously sentenced to serve 30 months in prison, followed by five years of supervised release, on the same charge.
According to court documents, a federal investigation was launched after a suspicious package was identified on Aug. 6, 2017, that originated from “Melly Sanchez” in California, to be delivered to “Rosetta Stone” in Juneau, Alaska. A search warrant was obtained and executed on the package, and located inside was 198.8 grams of methamphetamine, and a quantity of 50 oxycodone pills. After U.S. Postal Inspectors conducted a controlled delivery of the package on Aug. 9, 2017, Spaulding accepted the package and brought it to a residence she shared with Peters, who arrived a short time later. Upon Peters’ arrival, the package was opened knowing that it contained methamphetamine intended for further distribution in Juneau. The investigation revealed that Spaulding and Peters had previously agreed with others to receive a package of methamphetamine at their residence, and to deliver methamphetamine to a co-conspirator.
The U.S. Postal Inspection Service (USPIS), the Federal Bureau of Investigation (FBI), the Alaska State Troopers (AST), and the Juneau Police Department conducted the investigation leading to the successful prosecution of this case. This case was prosecuted by Assistant U.S. Attorney Jack S. Schmidt.
Judge Sentences Johnstown Drug Dealer to 8 Years in Prison for Distributing Heroin Near a PlaygroundRead the Press Release
JOHNSTOWN, Pa. – A resident of Johnstown, Pa., has been sentenced in federal court to 96 months in prison and six years’ supervised release on his conviction of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
United States District Judge Kim R. Gibson imposed the sentence on Charles A. Meyer, 38.
According to information presented to the court, on Oct. 20, 2015, within 1,000 feet of a playground, and on Dec. 22, 2015, and Jan. 22, 2016, Meyer distributed a quantity of heroin on each of those dates. Also on Jan. 22, 2016, Meyer possessed with the intent to distribute a quantity of heroin.
Assistant United States Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
Mr. Brady commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation that led to the successful prosecution of Meyer.
Johnstown Woman to Serve 7 Years in Prison for Distributing Cocaine, Allowing Her Apartment to be Used to Distribute DrugsRead the Press Release
JOHNSTOWN, Pa. – A resident of Johnstown, Pa., has been sentenced in federal court to 84 months in prison and three years’ supervised release on her conviction of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
United States District Judge Kim R. Gibson imposed the sentence on Patricia Ann Hawes, 55.
According to information presented to the court, on May 11, 2016, Hawes distributed a quantity of cocaine. Likewise, between April 22, 2016 and June 7, 2016, Hawes maintained her apartment on Highland Avenue for the purpose of distributing and using heroin and cocaine.
Assistant United States Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
Mr. Brady commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation that led to the successful prosecution of Hawes.
Jackson Men Sentenced to Prison for their Roles in Methamphetamine ConspiracyRead the Press Release
Jackson, Miss. – Vincent Taylor McGee, 30, and Jose Pacheco, 41, both of Jackson, were sentenced by U.S. District Judge William H. Barbour, Jr. today for their roles in a methamphetamine trafficking conspiracy, announced U.S. Attorney Mike Hurst and DEA Assistant Special Agent in Charge Derryle Smith. Both defendants pled guilty before Judge Barbour on June 11, 2018.
McGee was sentenced to 120 months in federal prison, followed by 5 years of supervised release, for conspiring to possess with the intent to distribute 500 grams or more of a detectable amount of methamphetamine. In November 2015, McGee picked up 1 kilogram of a detectable amount of methamphetamine from a Mexican source of supply in Atlanta and delivered it to a co-conspirator in Jackson.
Pacheco was sentenced to 39 months in federal prison, followed by 2 years of supervised release, for conspiring to possess with the intent to distribute 500 grams or more of a detectable amount of methamphetamine. Pacheco assisted co-conspirators in arranging the purchase and delivery of 1 kilogram of methamphetamine from a source of supply in Mexico.
The case is the result of an extensive investigation, dubbed "Rock Bottom", which began as an operation targeting illegal narcotics distribution in central Mississippi that involved the distribution of cocaine, crack and methamphetamine.
The case was investigated by the Drug Enforcement Administration, the Mississippi Bureau of Narcotics, and the Bureau of Alcohol Tobacco Firearms and Explosives, with assistance from the Hinds County Sheriff’s Office, Ridgeland Police Department, Jackson Police Department, U.S. Marshals Service, Federal Bureau of Investigation, Mississippi Highway Patrol, Madison County Sheriff’s Office, Brandon Police Department, Rankin County Sheriff’s Office, Mississippi Department of Corrections, Pearl Police Department, Flowood Police Department, Bureau of Customs and Border Patrol, and the DEA Houston Field Division. It is being prosecuted by Assistant United States Attorney Chris Wansley.
Jackson Man Sentenced to Almost Three Years in Prison under Project EJECT for Illegally Possessing FirearmRead the Press Release
Jackson, Miss. – Michael Handford, 30, of Jackson, was sentenced today by Senior U.S. District Judge William H. Barbour III, to 35 months in prison, followed by 3 years of supervised release, for illegally possessing a firearm, announced U.S. Attorney Mike Hurst and Special Agent in Charge Dana Nichols with the Bureau of Alcohol, Tobacco, Firearms and Explosives. Handford was also ordered to pay a $1,500 fine.
On October 24, 2017, members of the Jackson Police Department stopped the car in which Handford was a passenger for a traffic violation. Officers saw Handford attempting to hide a handgun under his seat as they approached the car. A records check revealed that Handford was a convicted felon and therefore could not legally possess firearms. Handford pled guilty before Judge Barbour on August 23, 2018, to being a felon in possession of a firearm.
The Jackson Police Department and the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. It was prosecuted by Assistant United States Attorney Patrick Lemon.
This case is part of Project EJECT, an initiative by the U.S. Attorney’s Office for the Southern District of Mississippi under the U.S. Department of Justice’s Project Safe Neighborhoods (PSN). EJECT is a holistic, multi-disciplinary approach to fighting and reducing violent crime in Jackson through prosecution, prevention, re-entry and awareness. EJECT stands for "Empower Jackson Expel Crime Together." PSN is program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Former Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Illegal Alien Sentenced to Federal Prison for Sexual Exploitation of a Minor and Possession of Child PornographyRead the Press Release
United States Attorney Brandon J. Fremin announced that, U.S. District Judge Brian A. Jackson sentenced VICTOR ZELAYA-FUNEZ, age 38, a Honduran national residing in Zachary, Louisiana, to 185 months in federal prison following his convictions for sexual exploitation of a minor and possession of child pornography. The Court further sentenced ZELAYA-FUNEZ to 5 years of supervised release following his term of imprisonment. The Court also ordered that the electronic devices used to facilitate his crimes be forfeited.
Following a three-day trial in June of this year, a jury unanimously found ZELAYA-FUNEZ guilty of sexual exploitation of a minor and possession of child pornography. The evidence at trial demonstrated that ZELAYA-FUNEZ possessed sexually explicit photos of the victim, and attempted to coerce the victim into creating additional sexually explicit videos and sending them to him. In private messages he sent to the victim, ZELAYA-FUNEZ threatened to tell the victim’s parents about sexually explicit images of her which he possessed if she did not comply with his demands for additional sexually explicit material. In other private messages, the defendant told the victim he cared for her and promised to provide her with various things of value in exchange for additional sexually explicit material.
United States Attorney Fremin stated, “This prosecution and sentence should send a strong message that we will go to great lengths to protect our communities from child predators and those who attempt to exploit children. I am very proud of the hard work and collaboration by our partners at the Department of Homeland Security, the East Baton Rouge Sheriff’s Office and the East Baton Rouge District Attorney’s Office.”
This case is part of Project Safe Childhood, a nationwide initiative by the U.S. Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood combines federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This investigation was conducted by the United States Department of Homeland Security, Homeland Security Investigations and Enforcement Removal Operations, and the East Baton Rouge Parish Sheriff’s Office, with assistance from the East Baton Rouge Parish District Attorney’s Office. The matter was prosecuted by Assistant United States Attorney Rene I. Salomon, who serves as the office’s Chief of the Criminal Division and former Assistant United States Attorney Ryan Rezaei.
Hudson County, New Jersey, Man Charged with Using Fake Passports to Conduct $1 Million Bank Fraud ConspiracyRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was arrested today and charged with a scheme that allegedly caused $1 million in losses by using fake passports to open bank accounts into which he and others deposited phony IRS refund checks, U.S. Attorney Craig Carpenito announced.
Mamadou Diallo, 42, of Jersey City, New Jersey, is charged by complaint with one count of conspiracy to commit bank fraud and two counts of passport fraud. He appeared today before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court. Diallo was released on $500,000 bond.
According to documents filed in this case and statements made in court:
From June 2012 through the present, Diallo and others conspired to fraudulently obtain money from four banks. They created false passports from various West African countries by affixing their own pictures onto passports bearing names other than their own. The conspirators then opened bank accounts using the doctored passports as photo identification. They deposited fraudulent checks bearing the routing number for the U.S. Treasury and then withdrew the funds. The losses associated with the conspiracy exceed $1 million.
The count of conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. The passport fraud charges each carry a maximum potential penalty of 15 years in prison.
U.S. Attorney Carpenito credited inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn; special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael; the U.S. Department of Treasury-Office of Inspector General, under the direction of Inspector General Eric Thorson; and the New York State Department of Taxation and Finance.
The government is represented by Assistant U.S. Attorney Ari B. Fontecchio of the U.S. Attorney’s Office Organized Crime and Drug Enforcement Task Force / Narcotics Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Hortonville Man Receives 15 Year Sentence for Sexual Exploitation of MinorsRead the Press Release
Matthew D. Krueger, United States Attorney for the Eastern District of Wisconsin, announced that on December 10, 2018, Jason W. Junek (age: 42) of Hortonville, Wisconsin, was sentenced by Chief District Judge William C. Griesbach to 15 years in federal prison for sexual exploitation of minor children in violation of Title 18 United States Code Section 2251(a). Upon his release, Junek will be on federal supervised release for 10 years and will have to register as a sex offender in the jurisdiction in which he resides. He was also ordered to pay a mandatory $5,000 special assessment pursuant to the Justice for Victims of Trafficking Act.
Junek used several popular social messaging applications to exchange texts, instant messages, and sexually explicit images with underage girls located across the United States and in several foreign countries. Junek created fictitious accounts to portray himself as a high school student utilizing the names “Jordan Fuerst” and “Josh Gibson.” Junek convinced the underage girls that he was their “boyfriend” and manipulated them into sending sexually explicit digital images and videos.
In pronouncing sentence, Chief Judge Griesbach noted the “horrible” nature of Junek’s crimes stating he “deprived children of their innocence.” The judge proclaimed the strong need to deter Junek and others from engaging in sexual communications with minors via the internet and that Junek’s actions called for substantial punishment.
The case was investigated by the Outagamie County Sheriff’s Office and the Wisconsin Internet Crimes Against Children (ICAC) Task Force. It was prosecuted by Assistant United States Attorney Daniel R. Humble.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006, by the U.S. Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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For further information contact:
Public Information Officer Dean Puschnig, (414) 297-1700
Honduran Congressman Pleads Guilty to Conspiring to Import Cocaine into the United States and Possessing Machineguns and Destructive DevicesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that FREDY RENAN NAJERA MONTOYA pled guilty yesterday in Manhattan federal court to charges that he conspired to import cocaine into the United States and possessed machineguns and destructive devices during the course of that conspiracy. NAJERA, who arrived in the United States on March 14, 2018, pled guilty before U.S. District Judge Paul G. Gardephe. NAJERA served in the National Congress of Honduras from 2006 until he arrived in the United States for prosecution. NAJERA pled guilty to charges carrying a mandatory minimum sentence of 40 years in prison. Sentencing is scheduled for April 19, 2019.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As he has now admitted in a United States courthouse, Fredy Renan Najera Montoya used his power and influence as a Honduran congressman to facilitate the transporting of massive amounts of cocaine from Colombia through Honduras, and ultimately to the streets of the U.S. He further admitted that he and his hired security teams used military-grade weapons, including machineguns, to protect the drug smuggling enterprise. Now, Najera awaits sentencing for the serious crimes to which he has pled.”
According to the Superseding Indictment, other court filings, and statements made during court proceedings:
From at least in or about 2008, up to and including in or about 2015, NAJERA abused his position as a Honduran congressman to lead large-scale and violent drug-trafficking activities in the same part of Honduras that he represented in his government position. NAJERA helped distribute more than 30 metric tons of cocaine, which NAJERA and his co-conspirators received in Honduras through a variety of means and ultimately imported into the United States. As part of these activities, NAJERA used, and employed security teams who used, military-grade weapons, including machineguns and rocket-propelled grenade launchers.
Between approximately 2008 and 2015, NAJERA constructed, maintained, and staffed clandestine airstrips in Olancho that were used to receive multi-hundred-kilogram shipments of cocaine sent from Venezuela to Honduras. NAJERA facilitated the receipt of cocaine-laden planes and helicopters at his airstrips, and coordinated the transportation of the cocaine westward in Honduras so that it could be imported into the United States. NAJERA employed heavily armed security personnel who participated in all aspects of the receipt and transportation of these shipments. NAJERA also cultivated criminal relationships with members of the Honduran National Police and the Honduran military in order to support his drug-trafficking activities by obtaining sensitive law enforcement information used by traffickers to avoid arrests and to plan transportation routes for U.S.-bound cocaine.
In 2009, NAJERA worked with narcotics trafficker Sergio Neftalí Mejía Duarte and Leonel Rivera Maradiaga, one the leaders of the violent Cachiros drug-trafficking organization, to hire members of the Honduran National Police to assassinate General Julian Arístides González. Around that time, General Arístides González began investigating NAJERA and other drug traffickers in Honduras following a cocaine plane shipment to Olancho that drew law enforcement attention. In retaliation, Mejía Duarte, on behalf of NAJERA, contacted other drug traffickers, including Leonel Rivera Maradiaga, and requested that they assist in killing General Arístides González in order to stop the investigation and other similar investigations. Leonel Rivera Maradiaga, in turn, recruited members of the Honduran National Police to carry out the murder.
Shortly after the murder, NAJERA and Mejía Duarte met with Leonel Rivera Maradiaga. During that meeting, NAJERA told Leonel Rivera Maradiaga, in substance, that Leonel Rivera Maradiaga had done a good job killing General Arístides González. Mejía Duarte also congratulated Leonel Rivera Maradiaga for arranging the murder. NAJERA and Mejía Duarte then presented Leonel Rivera Maradiaga with the money to pay the assassins, in the form of approximately $300,000 in cash that they had laid out on a table nearby.
In 2012, NAJERA also introduced members of the Sinaloa Cartel to Honduran officials who provided nearly unfettered access to a major commercial shipping hub in Puerto Cortés, Honduras. In connection with these efforts, NAJERA accepted at least one cash payment and helped broker additional bribes paid to Fabio Lobo, the son of the former Honduran President, and others. The Sinaloa Cartel relied on NAJERA’s connections to transport approximately 10 tons of cocaine through Puerto Cortés.
In 2013 and 2014, NAJERA was part of a group of current and former Honduran congressmen who worked with other drug traffickers in an effort to obtain political support and protection from other high-ranking Honduran officials. One of the group’s objectives was to install a Cachiros associate as the leader of the Honduran Congress to promote trafficker-friendly policies, including with respect to extradition.
Some of NAJERA’s co-conspirators have already been sentenced. In May 2018, Mejía Duarte was sentenced in the Southern District of Florida to life in prison for conspiring to import cocaine into the United States. In September 2017, Lobo was sentenced by U.S. District Judge Lorna G. Schofield to 24 years in prison for conspiring to import cocaine into the United States.
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NAJERA, 41, pled guilty to one count of conspiring to import cocaine into the United States, and to one count of possessing machineguns and destructive devices during the course of that conspiracy. Count One carries a maximum term of life in prison and a mandatory minimum term of ten years in prison. Count Two carries a maximum term of life in prison and a mandatory minimum of 30 years in prison, which must be served consecutive to any other term of imprisonment. The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of NAJERA will be determined by Judge Gardephe.
Mr. Berman praised the outstanding efforts of the Bilateral Investigations Unit of the Special Operations Division of the DEA, New York Strike Force, and Tegucigalpa Country Office.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III and Matthew J. Laroche are in charge of the prosecution.
Heroin Trafficker Sentenced to 15 Years in PrisonRead the Press Release
NORFOLK, Va. – A Suffolk man was sentenced today to 15 years in prison for the distribution of heroin.
“Drug traffickers in possession of firearms pose a significant threat to our communities,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “Investigating and prosecuting these cases remains a top priority in the Eastern District. We would not have been able to achieve this result without the cooperation of our local and federal law enforcement partners. My thanks to the Suffolk Police Department and DEA for their outstanding work on this case.”
According to court documents, Henry Scott, 43, sold 50 grams of heroin several times to an informant working with the Suffolk Police Department and the DEA. Law enforcement officials capped the investigation by executing a search warrant at Scott’s residence where they found an additional 27 grams of heroin along with an AR-15 style firearm with a 60-round drum magazine.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department reinvigorated PSN in 2017 as part of a 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.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Scott W. Hoernke, Acting Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after sentencing by Senior U.S. District Judge Robert G. Doumar. Assistant U.S. Attorney William D. Muhr prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:18-cr-54.
Hartford Man Pleads Guilty to Illegal Gun PossessionRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that ALVIN CRAWFORD, also known as “Nardy,” 34, of Hartford, pleaded guilty today before U.S. District Judge Janet C. Hall in New Haven to one count of possession of firearm by a convicted felon.
According to court documents and statements made in court, on April 2, 2018, Crawford, holding a yellow plastic bag, exited a car and ran from Hartford Police in the area of Rockville Street in Hartford. Crawford ignored verbal commands to stop running, threw the yellow bag over the fence, scaled the fence, picked up the bag and continued to run. Officers apprehended Crawford on Westland Street shortly after he had dropped the bag. A search of the bag revealed a Taurus .38 Special revolver and five rounds of ammunition.
Crawford’s criminal history includes state felony convictions for criminal possession of a firearm, carrying a pistol without a permit, violation of a protective order, and assault in the second 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.
Crawford has been detained since his arrest.
Judge Hall scheduled sentencing for March 7, 2019, at which time Crawford faces a maximum term of imprisonment of 10 years.
This matter is being investigated by the Hartford Police Department and the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force, which includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
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 neighborhoods safer for everyone.
Guatemalan Woman Sentenced for Illegal Re-entry into United StatesRead the Press Release
ALBANY, NEW YORK – Erla Maribel Ambrocio Ixlaj, age 30, and a citizen of Guatemala, was sentenced today to time served (114 days in jail), for illegal re-entry into the United States.
The announcement was made by United States Attorney Grant C. Jaquith and Thomas E. Feeley, Director of the Buffalo Field Office of Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations (ERO).
Ambrocio Ixlaj has been previously removed from the United States to Guatemala three times, the most recent removal taking place on August 5, 2014. On August 19, 2018, she was encountered and arrested by an ICE Officer in Walton, Delaware County, New York. A fingerprint check of Ambrocio Ixlaj resulted in the discovery of the prior removals. Ambrocio Ixlaj admitted that she returned to the United States without permission following the August 5, 2014 removal. Ambrocio Ixlaj has never had lawful authority to enter or reside in the United States.
Following her sentencing, Ambrocio Ixlaj was remanded to the custody of the Department of Homeland Security, for removal proceedings.
This case was investigated by ICE-ERO and prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Grayson County Man Pleads Guilty to Production, Distribution and Possession of Child PornRead the Press Release
OWENSBORO, Ky. – A Millwood, Kentucky, man, has pleaded guilty before United States District Judge Joseph H. McKinley on Monday, to multiple counts of production and distribution of child pornography, and possession of child pornography, announced United States Attorney Russell M. Coleman.
James D. Armes, 37, of Grayson County, Kentucky was indicted on five counts of production of child pornography, two counts of distribution of child pornography, and one count of possession of child pornography on May 9, 2018. On Monday, Armes admitted before the Court his guilt on all counts.
According to a factual basis of the charges before the Court, on or about December 2, 2017, Armes’s wife, looked at his cell phone and observed pictures of an eight month old relative with Ames in sexual situations.
On January 2, 2018, the Federal Bureau of Investigation obtained a federal search warrant to search the cell phone for child pornography. Several images and videos of child pornography were located on the phone including the images described by Armes’ wife. The review of his cell phone revealed eight videos and seven images of child pornography, involving two victims, that Armes produced.
Because of Armes prior rape conviction, he faces a mandatory minimum sentence of 25 years imprisonment and not more than 350 years, a fine of $2,000,000, and supervised release of not less than 5 years and not more than life.
This case is prosecuted by Assistant United States Attorney Spencer McKiness. The case was investigated by the Federal Bureau of Investigation and the Grayson County Sheriff’s Department.
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This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims.
Government Intervenes in False Claims Act Lawsuit Against Sutter Health and Palo Alto Medical Foundation for Mischarging the Medicare Advantage ProgramRead the Press Release
The United States has intervened in a complaint against Sutter Health LLC, a California-based healthcare services provider, and an affiliated entity, Palo Alto Medical Foundation, (collectively “Sutter”) that alleges that Sutter violated the False Claims Act by submitting inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans, the Justice Department announced today. Sutter Health is headquartered in Sacramento, California.
“Federal healthcare programs rely on the accuracy of information submitted by healthcare providers to ensure that patients are afforded the appropriate level of care and that managed care plans receive appropriate compensation,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Today’s action sends a clear message that we will seek to hold healthcare providers responsible if they fail to ensure that the information they submit is truthful.”
Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed healthcare insurance plans called Medicare Advantage Plans (MA Plans) that are owned and operated by private Medicare Advantage Organizations (MAOs). MA Plans are paid a capitated, or per-person, amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the health status of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.
Sutter Health, a non-profit public benefit corporation that provides healthcare services through affiliated entities, including hospitals and medical foundations, contracted with certain MAOs to provide healthcare services to California beneficiaries enrolled in the MAOs’ MA Plans. In exchange, Sutter received a share of the payments that the MAOs received from CMS for the beneficiaries under Sutter’s care.
Sutter submitted diagnoses to the MAOs for the MA Plan enrollees that they treated. The MAOs, in turn, submitted the diagnosis codes to CMS from the beneficiaries’ medical encounters, such as office visits and hospital stays, and these diagnosis codes were used by CMS to calculate a risk score for each beneficiary.
The lawsuit alleges that Sutter Health and Palo Alto Medical Foundation knowingly submitted unsupported diagnosis codes for certain patient encounters for beneficiaries under their care. These unsupported diagnosis scores allegedly inflated the risk scores of these beneficiaries, resulting in inflated payments to Sutter. The lawsuit further alleges that once the Sutter entities became aware of these unsupported diagnosis codes, they failed to take sufficient corrective action to identify and delete additional potentially unsupported diagnosis codes.
“This intervention illustrates our commitment to protecting the integrity of the Medicare Advantage program,” said U.S. Attorney Alex G. Tse for the Northern District of California. “The share of Medicare beneficiaries enrolled in Medicare Advantage has steadily grown over the past decade, with 19 million beneficiaries enrolled in 2017. It is critically important that the data submitted to the Medicare Advantage program is truthful, because the government relies on this information to set payment levels. We will continue to guard government health programs from companies that improperly maximize their bottom line at taxpayer expense.”
The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case. The whistleblower, Kathleen Ormsby, was a former employee of Palo Alto Medical Foundation.
This matter was investigated by the Civil Division’s Commercial Litigation Branch, the United States Attorney’s Office for the Northern District of California, and HHS-OIG.
The case is captioned United States ex rel. Ormsby v. Sutter Health, et al., Case No. 15-CV-01062-JD (N.D. Cal.). The claims in which the United States has intervened are allegations only, and there has been no determination of liability.
Government Intervenes in False Claims Act Lawsuit Against Sutter Health and Palo Alto Medical Foundation for Mischarging the Medicare Advantage ProgramRead the Press Release
SAN FRANCISCO – The United States has intervened in a complaint against Sutter Health LLC, a California-based healthcare services provider, and an affiliated entity, Palo Alto Medical Foundation, (collectively “Sutter”) that alleges that Sutter violated the False Claims Act by submitting inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans, the Justice Department announced today. Sutter Health is headquartered in Sacramento, California.
“This intervention illustrates our commitment to protecting the integrity of the Medicare Advantage program,” said U.S. Attorney Alex G. Tse. “The share of Medicare beneficiaries enrolled in Medicare Advantage has steadily grown over the past decade, with 19 million beneficiaries enrolled in 2017. It is critically important that the data submitted to the Medicare Advantage program is truthful, because the government relies on this information to set payment levels. We will continue to guard government health programs from companies that improperly maximize their bottom line at taxpayer expense.”
“Federal healthcare programs rely on the accuracy of information submitted by healthcare providers to ensure that patients are afforded the appropriate level of care and that managed care plans receive appropriate compensation,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Today’s action sends a clear message that we will seek to hold healthcare providers responsible if they fail to ensure that the information they submit is truthful.”
Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed healthcare insurance plans called Medicare Advantage Plans (MA Plans) that are owned and operated by private Medicare Advantage Organizations (MAOs). MA Plans are paid a capitated, or per-person, amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the health status of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.
Sutter Health, a non-profit public benefit corporation that provides healthcare services through affiliated entities, including hospitals and medical foundations, contracted with certain MAOs to provide healthcare services to California beneficiaries enrolled in the MAOs’ MA Plans. In exchange, Sutter received a share of the payments that the MAOs received from CMS for the beneficiaries under Sutter’s care.
Sutter submitted diagnoses to the MAOs for the MA Plan enrollees that they treated. The MAOs, in turn, submitted the diagnosis codes to CMS from the beneficiaries’ medical encounters, such as office visits and hospital stays, and these diagnosis codes were used by CMS to calculate a risk score for each beneficiary.
The lawsuit alleges that Sutter Health and Palo Alto Medical Foundation knowingly submitted unsupported diagnosis codes for certain patient encounters for beneficiaries under their care. These unsupported diagnosis scores allegedly inflated the risk scores of these beneficiaries, resulting in inflated payments to Sutter. The lawsuit further alleges that once the Sutter entities became aware of these unsupported diagnosis codes, they failed to take sufficient corrective action to identify and delete additional potentially unsupported diagnosis codes.
The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case. The whistleblower, Kathleen Ormsby, was a former employee of Palo Alto Medical Foundation.
This matter was investigated by the Civil Division’s Commercial Litigation Branch, the United States Attorney’s Office for the Northern District of California, and HHS-OIG.
The claims in which the United States has intervened are allegations only, and there has been no determination of liability.
Glenwood Man Sentenced for Receipt of Child PornographyRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on December 6, 2018, Steven Horton, age 40, of Glenwood, was sentenced to 84 months in prison to be followed by 10 years of supervised release by United States District Court Judge Stephanie M. Rose. The defendant pleaded guilty to accessing child pornography on July 24, 2018.
Operation Pacifier was an investigation conducted by the FBI into Playpen, a website on TOR hosted as hidden service. Playpen operated as a message board-type website where registered users would distribute and share images and videos of child pornography. Horton registered with Playpen on October 27, 2014, and was actively logged into Playpen for over 21 hours between the registration date and February 28, 2015.
This case was investigated by Iowa Department of Criminal Investigations, Federal Bureau of Investigation, Pottawattamie County Sheriff Department, and Glenwood Police Department.
The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.Gardiner Woman Sentenced to 70 Months for Heroin, Crack and Fentanyl ConspiracyRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Nicole Truman, 36, of Gardiner, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 70 months in prison and three years of supervised release for conspiring to distribute heroin, cocaine base, commonly known as “crack,” and fentanyl. She pled guilty on May 24, 2018.
According to court records, between June 2015 and March 2017, Truman conspired with others to acquire heroin and crack in Rochester, New York and transport it to Central Maine for distribution. The defendant assisted the head of the conspiracy, Darrell “Coast” Newton, and other dealers he sent from Rochester in distributing the narcotics in Central Maine. She provided transportation, facilitated drug deals, introduced Rochester conspirators to area distributors, assisted other conspirators in finding residences from which to sell drugs, and was a money courier.
Following her indictment in May 2017, she fled to Missouri where she was arrested several months later and returned to Maine.
The case was investigated by the U.S. Drug Enforcement Administration, the Maine Drug Enforcement Agency, and the Kennebec County Sheriff’s Department, with assistance provided by the Augusta Police Department. This case was investigated and prosecuted as part of the Department of Justice’s Strategy to Combat the Opioid Epidemic.
Fort Smith, Arkansas Man Sentenced to 186 Months for Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Nowlin Lee Waugh, Jr, age 35, of Fort Smith, Arkansas, was sentenced to 186 months’ imprisonment and 8 years’ supervised release for Possession With Intent To Distribute Methamphetamine. Mr. Waugh’s jury trial began on August 14, 2018 and concluded on August 15, 2018 with the guilty verdict. Sentencing occurred following the completion of a presentence report.
Evidence at trial proved that on March 23, 2018, Oklahoma Highway Patrol troopers attempted to stop a vehicle driven by the defendant on Interstate 40 in Okmulgee County. During the pursuit that ensued, the troopers could see the defendant moving erratically inside the vehicle. When the vehicle stopped the troopers saw bags that contained methamphetamine, a trash can that had methamphetamine and bleach in it, and an open bottle of bleach. There were also several open plastic baggies that had methamphetamine residue inside. Troopers recovered over 50 grams of methamphetamine that the defendant had not been able to destroy with bleach. The Drug Enforcement Agency assisted with the investigation.
“Despite the defendant’s best efforts to destroy the evidence of his crime, Oklahoma Highway Patrol troopers were able to process the crime scene and collect the evidence needed to prove to the jury that Waugh intended to distribute methamphetamine. The car stop and resulting investigation prevented thousands of dosage units from being distributed into Oklahoma communities, and will allow Waugh to be held accountable for his unlawful acts,” said United States Attorney Brian J. Kuester. “The hard work by the OHP Troopers, DEA Agents, and members of this office led to a just result for the people and communities in Eastern Oklahoma.”
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 Edward Snow 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.
Former State University President, Alain Kaloyeros, and Three Corporate Executives Sentenced to Prison for Fraud in Connection with Buffalo Billion Bid-RiggingRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that ALAIN KALOYEROS, the former President of the State University of New York Polytechnic Institute; STEVEN AIELLO, a founder and partner of COR Development (“COR”), a real estate development company based in the Syracuse, New York, area; JOSEPH GERARDI, also a founder and partner of COR; and LOUIS CIMINELLI, the former Chairman and CEO of LPCiminelli, a construction company based in Buffalo, New York, were sentenced to prison for fraud in connection with the rigging of bids for hundreds of millions of dollars of State-funded contracts under New York State’s “Buffalo Billion” economic development program. KALOYEROS was sentenced today by U.S. District Judge Valerie E. Caproni, and AIELLO, GERARDI, and CIMINELLI were all sentenced last week by Judge Caproni. The defendants received the following sentences:
ALAIN KALOYEROS
42 months in prison
STEVEN AIELLO
36 months in prison
JOSEPH GERARDI
30 months in prison
LOUIS CIMINELLI
28 months in prison
On July 12, 2018, KALOYEROS, AIELLO, GERARDI, and CIMINELLI were each convicted of wire fraud and wire fraud conspiracy, following a three-week trial before Judge Caproni, who imposed sentence on each of the defendants. GERARDI was also convicted of making false statements to federal officers. In addition to the bid-rigging offense, AIELLO’s sentence also reflected his conviction for paying bribes to Joseph Percoco, a former executive aide and campaign manager to the Governor of New York.
U.S. Attorney Geoffrey Berman said: “The Buffalo Billion program is an economic initiative intended to stimulate economic growth, and ultimately benefit the people of New York. But a well-connected group of Albany insiders exploited the project to benefit themselves instead. By manipulating the application process for awarding bids, these men effectively corrupted the bidding process to ensure that companies with which they had financial interests would be awarded the lucrative work. Public corruption – especially at such a disconcertingly high level in Albany – contributes to the frustration and eroding faith of the people of New York in the integrity of their government. We will continue to do everything within our power to ensure that funds intended for the greater good of New Yorkers will be used for just that – and not to line the pockets of influence-peddlers with high-level access.”
Judge Caproni said during AIELLO’s sentencing: “I want this sentence to be heard around the state. . . . This prosecution . . . should serve as a warning to others who interact with the government everywhere . . . when competing for projects from an entity like Fort Schuyler, you are playing with state money. That means you have to be purer than Caesar’s wife, because the money you were trying to get comes from the hardworking men and women of New York State. If you can’t live with that standard, then stick with private sector work, because if you remain at the public trough and you engage in corrupt means to get to public money, even if you did a good job for the public, the Court will show you no mercy. . . .”
According to the evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:
KALOYEROS, AIELLO, GERARDI, and CIMINELLI conspired to deceive Fort Schuyler Management Corporation (“Fort Schuyler”), a State-funded entity charged with awarding State contracts worth hundreds of millions of dollars, by secretly rigging the bidding process so that the contracts offered in connection with the Buffalo Billion program would be awarded to COR and LPCiminelli. KALOYEROS, who oversaw the application process for many of the State grants awarded under the Buffalo Billion and similar programs, retained Todd Howe to lobby the New York Governor’s office in order to maintain and expand KALOYEROS’s position. KALOYEROS and Howe, who also worked for both COR and LPCiminelli, then conspired with AIELLO, GERARDI, and CIMINELLI to defraud Fort Schuyler by secretly tailoring the required qualifications for development deals in Syracuse and Buffalo so that COR and LPCiminelli would be awarded significant projects without any meaningful competition. All the while, the defendants falsely represented to Fort Schuyler that the bidding process was fair, open, and competitive.
More specifically, in or about October 2013, Fort Schuyler issued requests for proposals (“RFPs”) to solicit bids from interested and qualified developers for the Syracuse and Buffalo projects. KALOYEROS oversaw the drafting of the RFPs and, unbeknownst to Fort Schuyler, KALOYEROS and Howe secretly solicited from AIELLO, GERARDI, CIMINELLI, and others at LPCiminelli: (1) qualifications of COR and LPCiminelli to put in the RFPs, so that the RFPs would request qualifications specifically held by those companies, and (2) feedback on the RFPs, before they were released publicly. For example, the Syracuse RFP requested the use of specific project management software used by COR. After Howe emailed GERARDI and AIELLO a draft of the Syracuse RFP approximately two weeks before its public issuance, GERARDI sent back to Howe and AIELLO a handwritten mark-up of the draft RFP, on which GERARDI had, among other things, underlined the software names and wrote “too telegraphed?? I would leave out these specific programs.” For its part, the Buffalo RFP, as initially issued, required 50 years of experience by a local developer – a qualification touted by LPCiminelli in promotional materials provided to KALOYEROS.
Additionally, after the Government’s investigation became public, both KALOYEROS and CIMINELLI deleted incriminating evidence from their personal email accounts. GERARDI voluntarily met with government agents and lied about his criminal conduct.
In addition to his convictions for fraud in connection with the Buffalo Billion program, AIELLO was convicted in connection with a bribery conspiracy involving Percoco, who was also convicted and sentenced by Judge Caproni to 72 months in prison. Beginning in early 2014, Percoco was paid bribes totaling approximately $35,000 from COR. These bribe payments were orchestrated by AIELLO, who arranged them in exchange for Percoco’s official assistance for COR on an as-needed basis.
Specifically, Percoco agreed with AIELLO to, and did, take official action for the benefit of COR to (a) reverse an adverse decision by the Empire State Development Corporation, which is the State’s main economic development agency, that would have required COR to enter into a costly labor peace agreement in connection with a development project in Syracuse, (b) free up a backlog of more than $14 million in State funds that had already been awarded to COR but were delayed in payment, and (c) secure a substantial pay raise for AIELLO’s son, who worked in the Governor’s office. To disguise the nature and source of the bribe payments, COR’s bribes to Percoco were funneled through bank accounts and a shell company set up by Howe.
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In addition to the prison term, KALOYEROS, 62, of Slingerlands, New York, was sentenced to 2 years of supervised release. Judge Caproni also ordered KALOYEROS to pay a fine of $100,000.
In addition to the prison terms, AIELLO, 60, of Fayetteville, New York, GERARDI, 59, of Fayetteville, New York, and CIMINELLI, 63, of Buffalo, New York, were each sentenced to two years of supervised release. Judge Caproni also ordered AIELLO, GERARDI, and CIMINELLI each to pay a fine of $500,000 and to forfeit ill-gotten gains.
Mr. Berman praised the outstanding work of the Buffalo Field Office of the Federal Bureau of Investigation and the New York Office of the Internal Revenue Service-Criminal Investigation, which jointly conducted this investigation with Special Agents from the U.S. Attorney’s Office.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Janis Echenberg, Robert Boone, David Zhou, and Matthew Podolsky are in charge of the prosecution.
Former Senior Employee at FDIC Convicted of Embezzling Confidential DocumentsRead the Press Release
Following six days of trial, a federal jury in Brooklyn returned a guilty verdict today against Allison Aytes on both counts of an indictment charging her with theft of government property in the possession of the Federal Deposit Insurance Corporation (FDIC). When sentenced by United States District Judge Sterling Johnson, Jr., Aytes faces up to 20 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Jay N. Lerner, Inspector General, FDIC, announced the verdict.
“Aytes embezzled sensitive and confidential information about banks that was the property of the United States government shortly before she resigned from the FDIC to seek job opportunities at those very same banks,” stated United States Attorney Donoghue. “With today’s verdict, Aytes has been held accountable for abusing her position of trust for personal gain.”
“This case makes clear that those who compromise sensitive FDIC information will be held accountable for their actions,” stated FDIC Inspector General Lerner. “We are committed to investigating such breaches of public trust, and to protecting the integrity of confidential data maintained by the agency.”
At the time of her resignation in September 2015, Aytes was a senior employee in the FDIC’s Office of Complex Financial Institutions in New York. The Office was created after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act to oversee and conduct, if necessary, an orderly bankruptcy of the world’s largest banks and financial institutions. Each of these banks and financial institutions is required to file resolution plans, referred to as “living wills,” with the FDIC. The plans contain confidential information about the bank, including its assets, business operations, data center locations, critical vendors, agreements with other banks and potential weaknesses or other deficiencies that pose risk during a time of financial crisis.
In August 2015, Aytes used her office computer to review listings for and apply for jobs with financial institutions that filed living wills with the FDIC. On August 27, 2015, one day after being contacted about a possible position at one of the banks, Aytes logged on to a secure FDIC database and printed living will information for that bank. On September 16, 2015, Aytes resigned her position at the FDIC. A review of FDIC Data Loss Prevention software revealed that on her last day of work, Aytes copied numerous electronic files from the FDIC network to external USB drives, including living wills for U.S. banks where Aytes had been seeking employment.
The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney James P. McDonald is in charge of the prosecution.
The Defendant:
ALLISON AYTES
Age: 41
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-132 (SJ)
Former Owner of Chicago Medical Clinic Guilty of Selling Opioid Prescriptions to Patients Who Lacked Medical Need for the DrugsRead the Press Release
CHICAGO — The former owner of a Chicago medical clinic admitted in federal court today that he sold opioid prescriptions to patients whom he knew lacked a legitimate medical need for the drugs.
MOHAMMED SHARIFF, who owned Midtown Medical Center in Chicago’s Uptown neighborhood, conspired with a physician to sell oxycodone, hydrocodone, and other medications to patients whom they knew lacked a medical reason for taking the drugs, according to a plea agreement filed today in U.S. District Court in Chicago. At Shariff’s direction, the physician, DR. THEODORE GALVANI, wrote prescriptions for the powerful opioids without conducting an appropriate physical examination or performing any medical tests, the plea agreement states. Dr. Galvani often met with more than 70 patients per day, sometimes seeing them in groups of two or more at the same time, the plea agreement states. At Shariff’s direction, a “crew leader” often organized groups of people to see Dr. Galvani and obtain opioid prescriptions from him, the plea agreement states.
Shariff, 68, of Lincolnwood, pleaded guilty to one count of conspiracy to knowingly dispense controlled substances outside the usual course of professional practice and without a legitimate medical purpose. The charge carries a maximum prison sentence of 20 years and a maximum fine of $1 million. U.S. District Judge Harry D. Leinenweber set sentencing for March 19, 2019.
Dr. Galvani, of Spring Grove, previously pleaded guilty to drug conspiracy charges. He is awaiting sentencing.
Shariff’s guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Jeffrey Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General. The government is represented by Assistant U.S. Attorneys Peter M. Flanagan and Andrew C. Erskine.
According to Shariff’s plea agreement, individuals paid $100 to $200 in cash to Shariff and Galvani in exchange for the improper prescriptions. For individuals insured by Medicare, Shariff and Dr. Galvani prescribed the opioids and then submitted or caused others to submit false claims to Medicare, seeking reimbursement for purported office visits with those individuals, the plea agreement states. From February 2012 to March 2013, Shariff and Dr. Galvani received a total of at least $584,188 through the improper prescription scheme, the plea agreement states. Shariff admitted that he personally kept at least $292,094 as his share of the proceeds. Shariff further admitted that, during the same period of time, he and Dr. Galvani together were responsible for prescribing more than two kilograms of oxycodone, more than 595,000 hydrocodone pills, and more than 190,000 alprazolam pills (commonly known as Xanax), to individuals whom they knew had no legitimate medical need for those drugs.
In addition to the improper prescriptions, Shariff admitted in his plea agreement that he attempted to carry out a separate fraud scheme involving a home health care company that he owned, Elgin-based Home Health Resource LLC. In a May 2016 meeting in Chicago, Shariff offered to pay an unidentified physician $500 each time the doctor certified a Medicare beneficiary as eligible for home health care and referred the patient to Shariff’s company, the plea agreement states. Unbeknownst to Shariff, the doctor was cooperating with law enforcement, and their conversation was surreptitiously recorded. During the meeting, Shariff claimed that he arranged for his home health company’s employees to conceal the fact that their clients were not truly eligible for home health services. Shariff told the cooperating physician that he instructed nurses at the company to “tell the patient you are homebound,” and that “when the doctor come, don’t say that you go out and drive and this and that. Don’t tell anybody you drive, don’t tell anybody you’re taking the bus, even going to the groceries. If anybody asks, ‘I stay home. I’m homebound.’”
Former Oil Company President Sentenced to 12 Years in Prison for Stock Manipulation SchemeRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of RYAN RANDALL GILBERTSON, 42, founder of Dakota Plains Holdings, Inc., to 144 months in federal prison, a $2 million fine, and over $15 million in restitution. GILBERTSON was sentenced today by Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota. A federal jury convicted GILBERTSON and co-defendant DOUGLAS VAUGHN HOSKINS, 50, of multiple counts of wire fraud, securities fraud, and conspiracy to commit securities fraud, on June 26, 2018, following an 11-day jury trial before Judge Schiltz.
HOSKINS is scheduled to be sentenced on December 21, 2018, by Judge Patrick J. Schiltz in U.S. District Court in Minneapolis, Minnesota.
As proven in court, in November 2008, GILBERTSON and his business partner founded Dakota Plains, Inc. (“Dakota Plains”), a privately held company based in Wayzata, Minnesota that owned and operated a transloading facility in New Town, North Dakota. From the outset, GILBERTSON and his partner concealed their involvement in the company by installing their fathers as the company’s executives and two-person board of directors. Rather than capitalize the company at the outset, GILBERTSON caused the company to issue $9 million in promissory notes to himself and other corporate insiders. The notes paid 12% annual interest and included a provision that paid GILBERTSON and the other noteholders a bonus payment based on the average trading price of Dakota Plains stock during the first 20 days of public trading. The bonus payment provision operated as an “embedded derivative” in which the value of the bonus payment would be based on the average price of Dakota Plains stock during the first 20 days of public trading.
GILBERTSON then caused the company to go public via a reverse merger with a company called Malibu Club Tan, which was a publicly traded shell company that operated a single defunct tanning salon in suburban Salt Lake City, Utah. GILBERTSON made it a secret condition of the reverse merger that DOUG HOSKINS, his friend and polo coach, be able to purchase the majority of the “float” of freely trading shares, which were the only shares that could trade publicly following the reverse merger. GILBERTSON then gave $30,000 to HOSKINS, who was deeply in debt and owed money to the IRS and other creditors, in order to purchase 50,000 shares of Dakota Plains stock at a price of $0.50 per share on March 23, 2012, the morning of the reverse merger. That same day, again at the direction of GILBERTSON, HOSKINS began selling his shares at the fraudulently inflated price of $12 per share.
On the first day of public trading, HOSKINS began selling his newly acquired shares for an inflated price of $12 per share at GILBERTSON’S direction, and continued to do so throughout the first 20 days of public trading following the reverse merger. At the same time, GILBERTSON directed a local stockbroker at a Minneapolis-based securities brokerage firm to purchase shares of Dakota Plains stock on behalf of both himself and his clients at inflated prices. GILBERTSON also instructed a Salt Lake City-based business consultant to manipulate the price of the stock by ensuring that none of the shell company shareholders sold their stock for less than the $12 per share price offered by his friend and polo coach, HOSKINS. Indeed, on April 4, 2012, GILBERTSON sent a text message to the consultant in Utah bragging that the shell company shareholders “would be participating on sales at 7 bucks [a share] not 12 were it not for my involvement.”
Throughout the 20-day period following the reverse merger, GILBERTSON, with the help of HOSKINS and others, manipulated the price of Dakota Plains stock to increase the average trading price to $11.30 per share. This inflated share price triggered a $32.8 million bonus payment to GILBERTSON and the other noteholders. When the cash-strapped company was unable to pay the bonus, GILBERTSON instructed its CEO to raise money for use in paying GILBERTSON’s fraudulently inflated bonus payment.
Ultimately, GILBERTSON made millions as a result of his stock manipulation scheme. HOSKINS made less money, but still pocketed more than $125,000 from his stock sales, much of which he used to purchase an Argentine polo pony.
In the wake of the fraud scheme, HOSKINS was interviewed by the Securities and Exchange Commission (SEC) about his involvement in these stock sales. HOSKINS repeatedly lied under oath during the deposition, covering up both his and GILBERTSON’S involvement in the stock manipulation scheme. Among other things, HOSKINS claimed that he did not discuss the stock trades with any other individuals. At trial, GILBERTSON falsely denied his role in the stock manipulation scheme, but conceded that he had arranged for HOSKINS to purchase Dakota Plains stock prior to the reverse merger and had provided HOSKINS with the money with which he purchased the stock.
“Mr. Gilbertson orchestrated an extraordinarily complex stock manipulation scheme in order to obtain millions of dollars from a publicly traded company. He executed his scheme over many years at the detriment of the company, which is now bankrupt, its shareholders and the trading public,” said United States Attorney Erica H. MacDonald. “He did not care about how his actions may impact others; he only cared about lining his own pockets. Despite the complexity of his scheme, and how much of a game he tried to play, he lost, thanks to the diligent and thorough work of investigators, prosecutors, a federal jury, and the Court.”
“Mr. Gilbertson created a complex and complicated scheme that was unraveled thanks to the diligence of highly trained agents who don't give up,” said Jill Sanborn, Special Agent in Charge of the Minneapolis Division of the FBI. “The heavy sentence imposed today on Mr. Gilbertson underscores that market rigging and self-dealing for one's own financial gain are nefarious activities that will be discovered and that those who engage in them will be dealt with accordingly."
“Today’s sentence sends a clear message regarding the critical role the U.S. Postal Inspection Service and its law enforcement partners play in protecting the investing public from these types of fraudulent schemes, “ said Acting Postal Inspector in Charge Lesley Allison. “We will continue to protect and ensure the nation’s mail stream is not used by criminals to prey upon our citizens.”
This case is the result of an investigation conducted by the FBI and the United States Postal Inspection Service.
This case was prosecuted by Assistant United States Attorneys Joseph H. Thompson, Kimberly A. Svendsen, and Melinda A. Williams.
The Criminal Docket Number for this case is: 17-cr-00066
Defendant Information:
RYAN RANDALL GILBERTSON, 42
Delano, Minn.
Convicted:
- Wire fraud, 14 counts
- Conspiracy to commit securities fraud, 1 count
- Securities fraud, 6 counts
Sentenced:
- 144 months imprisonment
- 2 years supervised release
- $2 million fine
- $15,135,360 in restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former Employee of Allegheny County Drug Laboratory Sentenced to Prison for Stealing Drug EvidenceRead the Press Release
PITTSBURGH, Pa. – A resident of Pittsburgh, Pennsylvania, was sentenced in federal court for stealing federal drug evidence, United States Attorney Scott W. Brady announced today.
United States District Judge Mark R. Hornak sentenced Matthew Ieraci, 30, to 60 days of imprisonment following his guilty plea on July 25, 2018, to one count of theft concerning a program receiving federal funds.
In connection with his guilty plea, Ieraci admitted that from February 8, 2017, and continuing until February 27, 2017, he stole a total of approximately 52.45 grams of powder alprazolam, a Schedule IV controlled substance, from the Allegheny County Office of the Medical Examiner (ACOME), where he was employed as a laboratory scientist. Ieraci further admitted he stole the evidence from a larger quantity of alprazolam that the United States Postal Inspection Service had submitted to ACOME for chemical analysis in connection with an ongoing multi-jurisdiction, multi-agency federal drug-trafficking investigation. Ieraci was assigned to analyze the evidence on behalf of ACOME. The defendant also admitted that he had been trained in proper evidence-handling techniques and was aware of the consequences of evidence tampering, including the possibility that such evidence would not be admissible at trial.
Assistant United States Attorney Eric G. Olshan is prosecuting this case on behalf of the government. The Federal Bureau of Investigation conducted the investigation of Ieraci.
FCI Danbury Correctional Officer Pleads Guilty to Sexually Abusing InmateRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, and Guido Modano, Special Agent in Charge of the Department of Justice Office of the Inspector General’s New York Field Office, today announced that CARLOS SANCHEZ, 33, of Middlebury, waived his right to be indicted and pleaded guilty yesterday before U.S. District Judge Victor A. Bolden in Bridgeport to sexually abusing an inmate at the Federal Correctional Institution in Danbury (FCI Danbury).
According to court documents and statements made in court, Sanchez was employed as a correctional officer at FCI Danbury. On two occasions in July and August 2018, Sanchez engaged in sexual activity with a female inmate at the prison.
Sanchez pleaded guilty to one count of sexual abuse of a ward, an offense that carries a maximum term of imprisonment of 15 years. A sentencing date has not been scheduled.
Sanchez is released on a $50,000 bond pending sentencing. He has resigned from the Federal Bureau of Prisons.
This matter is being investigated by the Department of Justice Office of the Inspector General and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Anastasia E. King.
Evans Landscaping Officials Convicted of Defrauding City, State 'Small Business' ProgramsRead the Press Release
CINCINNATI – A jury has convicted Evans Landscaping, Inc. and company executives on all counts charged in a fraud case.
The company; the owner of Evans Landscaping, Inc., Doug Evans; and the vice president of operations for Evans Landscaping, Jim Bailey, were convicted of defrauding the City of Cincinnati and other public entities through fraudulent small business contracts.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Todd Wickerham, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, and Ohio Attorney General Mike DeWine announced the verdict reached today following a trial that began on November 9.
Evans Landscaping is an Ohio company headquartered in Cincinnati that performs demolition, site-work, grading, hauling, recycling and landscaping services. Given the size and ownership of the company, Evans Landscaping does not qualify as a small business enterprise (SBE).
In order to qualify for the City of Cincinnati’s SBE program, a company must be independently controlled, operated and managed by a qualifying individual whose net worth does not exceed certain limits. The program also requires that the company be directly responsible for providing the supplies or services to the City without relying upon others who are not owners or employees of the company.
Similarly, the State of Ohio has established an Encouraging Diversity, Growth, and Equity program (EDGE) for economically disadvantaged businesses that are at least 51% owned and controlled by an economically disadvantaged person. The size of the business must not exceed the definition of a “small business.”
In 2008, the defendants (along with others) established, controlled and operated a demolition company, Ergon Site Construction, LLC, for the benefit of Evans Landscaping. Ergon’s president and owner, Korey Jordan, had no prior experience in the field but provided IT services for Evans Landscaping. Ergon (with the help of the coconspirators) fraudulently obtained certifications as an SBE and EDGE contractor while concealing Evans Landscaping’s involvement in and control over Ergon.
Evans and Evans Landscaping provided startup funds to Ergon. Jordan did not make any capital contributions to the establishment of the company.
Evans Landscaping personnel prepared and filed the legal documentation to register Ergon as an LLC, created the company’s name and logo, ordered Ergon apparel, and bought equipment labels with Ergon’s logo.
Jordan performed little work for Ergon and had little, if any, actual control over Ergon’s management, finances and operations. He was not permitted to make certain decisions or take certain actions without Doug Evans’ approval.
Evans paid Jordan a monthly salary through the Ergon payroll and Evans Landscaping employees handled virtually all of the accounting and office management functions of Ergon. For example:
- Ergon’s bookkeeping was kept by Evans Landscaping employees;
- Evans Landscaping personnel had Jordan sign blank Ergon checks for the employees to use;
- Evans Landscaping was a guarantor for Ergon’s line of credit and arranged for the purchase of two Mack Trucks in Ergon’s name;
- At various times, Ergon’s business office and address was located on property owned by Evans or one of his companies;
- Evans, Bailey and others controlled hiring and firing by Ergon, and at one point, Evans terminated the Ergon health care plan;
- Evans Landscaping housed, maintained and dispatched the vehicles and equipment in Ergon’s name, which was used by both companies; and
- Evans Landscaping officers and employees directed virtually all field and construction operations of Ergon, including on-site supervision and the managing of Ergon field workers.
From 2011 through 2014, Ergon bid on and received more than 100 residential demolition contracts with the City of Cincinnati, totaling approximately $1.9 million, by leveraging Ergon’s fraudulent SBE status.
In a similar fashion, during the same timeframe, Evans Landscaping bid on State demolition and construction projects – particularly public school, university and municipal projects – by claiming Ergon would provide a percentage of the services and receive part of the funds to be paid.
On at least one occasion, Evans Landscaping listed a different subcontractor, won the contract, and performed the work without using, paying or even notifying the EDGE subcontractor named.
Specifically, the company and both men were convicted of two counts of conspiracy to commit wire fraud and three counts of wire fraud. The two men were also convicted of one count of misprision of a felony.
Korey Jordan (president of Ergon), Maurice Patterson (former CFO of Evans Landscaping), John Dietrich (former CFO of Evans Landscaping) and Michael Moeller (former manager at Evans Landscaping) have pleaded guilty in relation to this case.
U.S. Attorney Glassman commended the investigation of this case by the FBI’s Southern Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation, as well as Assistant United States Attorney Timothy S. Mangan and Deputy Criminal Chief Emily N. Glatfelter, who prosecuted the case.
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Erie Gang Member Sentenced to 6+ years in Prison for Drug ConspiracyRead the Press Release
ERIE, Pa. – A former resident of Erie, Pennsylvania pleaded guilty and was sentenced in federal court to 78 months in federal prison on his conviction of violating federal drug laws, United States Attorney Scott W. Brady announced today.
United States District Judge David S. Cercone imposed the sentence on Andre Javon Knight, 35.
According to information presented to the court, the FBI’s Erie Area Gang Law Enforcement (EAGLE), Safe Streets task force conducted an investigation into the drug dealing and violent crime activity of members of a local criminal network identifying itself as "1800". The court was advised that court authorized intercepts of telephone communications between members of the group and others revealed Knight was a source of supply of cocaine to the charged co-conspirators. According to information presented to the court, Knight and another co-conspirator discussed the quality of the cocaine and the process of "cooking" it into crack.
The federal sentence was ordered to be served consecutively to a 25 to 50 month sentence Knight received in state court for a firearm offense.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
United States Attorney Brady commended EAGLE task force, which is comprised of members of the Federal Bureau of Investigation, the Pennsylvania Attorney General’s Office, Bureau of Narcotics Investigation and the Erie Police Department for the investigation leading to the successful prosecution of Knight.
Elk County Man Facing Multiple Child Pornography ChargesRead the Press Release
ERIE, Pa. - A resident of Ridgway, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of violating federal laws relating to the sexual exploitation of children, United States Attorney Scott W. Brady announced today.
The eight-count superseding indictment named Jesse Porter, 41, as the sole defendant.
According to the indictment presented to the court, Porter took sexually explicit images and videos of two minor victims. He also distributed and received computer images depicting minors engaging in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The law provides for a maximum total sentence of 220 years in prison, a fine of $2,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Eagle Butte Man Sentenced for Burglary and LarcenyRead the Press Release
United States Attorney Ron Parsons announced that an Eagle Butte, South Dakota, man convicted of separate and unrelated Burglary and Larceny offenses was sentenced on December 10, 2018, by U.S. District Judge Roberto A. Lange.
Tommy Shaving, age 49, was sentenced to 12 months and a day in federal prison, followed by 2 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100 on each offense. The terms of imprisonment and supervised release for the two offenses are to be served concurrently, or at the same time as each other.
Shaving was indicted by a federal grand jury on July 10, 2018. He pled guilty on September 24, 2018.
The burglary conviction stemmed from an incident on November 30, 2017, when Shaving unlawfully entered the United Church of Christ Church in Eagle Butte and took 3 star quilts valued at $1,200.00.
The larceny conviction stemmed from October 12, 2017, and October 28, 2017, when Shaving took blank checks from an individual and cashed 16 unauthorized checks for a total amount of $1,035.00.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
Shaving was immediately turned over to the custody of the U.S. Marshals Service.
Durable Medical Equipment Provider Agrees to Pay $1.6 Million to Resolve False Claims AllegationsRead the Press Release
SALT LAKE CITY -- Benjamin D. George and Jody C. Rookstool, and their company, Western Medical Group, have agreed to pay $1,634,844 million to settle False Claims Act allegations, U.S. Attorney for Utah John W. Huber announced today. The settlement concerns conduct initiated by Western Medical and concludes two qui tam actions filed by whistleblowers in December 2013 and February 2014.
The settlement resolves allegations that the company caused the submission of false claims to Medicare. Complaints were based primarily on allegations surrounding Western Medical’s use of a telemarketing scheme to sell knee and back braces to Medicare beneficiaries. The United States alleged that the company violated Medicare’s prohibition against telephone solicitation of covered products to beneficiaries.
“Misuse of taxpayer dollars is something we take very seriously. We use the False Claims Act as a tool to protect the public and recover taxpayer dollars that were lost through fraud. We vigorously pursue these cases on behalf of Utah taxpayers. The money recovered will be put back into federal health care programs where it can be used to provide medical services for the elderly and disable,” U.S. Attorney Huber said today.
“The FBI takes health care fraud seriously and we work closely with our federal partners to identify, investigate and prosecute the crime,” said Eric Barnhart, Special Agent in Charge of the FBI’s Salt Lake City Field Office. “The public should beware of telemarketers who make direct telephone solicitations with no legitimate medical referral and attempt to induce them into purchasing medical products. Promises to waive co-payments or efforts to bypass one's legitimate prescribing physician are signs of a fraudulent operation. The FBI and its partners also applaud those who blow the whistle on fraud. It’s an act of courage to come forward and share one's observations with law enforcement.”
Steve Hanson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Kansas City Region, stated, “Healthcare providers who improperly bill our programs at the expense of taxpayers will be pursued and held accountable for their actions.”
The United States’ investigation began with two qui tam complaints filed by former Western Medical employees. The qui tam provisions of the False Claims Act allow for whistleblowers, or relators, to file suit for violations of the Act on behalf of the United States.
This matter was investigated by the U.S. Department of Justice, the Utah U.S. Attorney’s Office’s Affirmative Civil Enforcement Section, the U.S. Department of Health and Human Services Office of Inspector General, the FBI, and the Office of Personnel Management (OPM).
The cases are docketed as United States ex rel. Craig Bearden v. Arizona Medical Supply, LLC, dba Western Medical and Senior First Medical; KMR Medical, LLC; KPM Capital, LLC; Privacy Maxx, LLC; and Jody Rookstool, No. 2:13-cv-01127 and United States, ex rel., Michelle Boucher, P.A., v. KPM Capital, LLC dba Western Medical Group; KMR Medical LLC; Jody Rookstool; Benjamin George; David Nolan; John Does #1-100, Ficticious Names, No. 2:14-cv-00092.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
Drug Trafficker Sentenced to Eight Years in Prison for Distributing Narcotics in Northwest Washington and MarylandRead the Press Release
WASHINGTON – Dontae Robey, 36, of Landover, Md., was sentenced today to eight years in prison for trafficking in heroin, crack, and powder cocaine in the Shaw area of Northwest Washington and Maryland, announced U.S. Attorney Jessie K. Liu, Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Robey pled guilty in September 2018 before the Honorable Timothy J. Kelly in the U.S. District Court for the District of Columbia to one count of unlawful possession with intent to distribute 100 grams or more of heroin. The plea agreement, which was contingent upon the Court’s approval, called for a sentence of eight years in prison, to be followed by four years of supervised release. Judge Kelly accepted the plea and sentenced Robey accordingly.
As part of his plea agreement, Robey took responsibility for 110 grams of heroin, 67 grams of crack cocaine, and three grams of cocaine that were present in a silver Infiniti that Robey was operating on Nov. 19, 2017, following a traffic stop performed by members of MPD’s Narcotics and Special Investigations Division’s Criminal Interdiction Unit.
Additionally, on May 2, 2018, members of the FBI’s Safe Streets Task Force and MPD’s Third District Crime Suppression Team arrested Robey in the 700 block of S Street NW pursuant to an arrest warrant. Officers recovered a Lexus key on Robey’s person and a large amount of cash. A half-block away, law enforcement located a blue Lexus ES 350. Inside the vehicle, law enforcement recovered approximately 40 grams of heroin located in a small storage compartment to the left of the steering wheel. As part of his plea agreement, Robey admitted to possessing the narcotics inside the Lexus, and acknowledged that he maintained a residence in Landover, where he packaged quantities of narcotics for distribution and then distributed those narcotics in the District of Columbia.
Robey has three prior drug trafficking convictions related to offenses in the same location where he was arrested on May 2, 2018, all resulting from his possession of packaged narcotics in the neighborhood. In 2001, he was convicted of trafficking narcotics following his possession of 29 individually packaged ziplocs of crack cocaine. In 2002, he was convicted of trafficking narcotics after he was found in possession of 83 individually packaged ziplocs of crack cocaine. In 2008, he was convicted of attempting to distribute crack cocaine to an undercover officer.
In announcing the sentence, U.S. Attorney Liu, Assistant Director in Charge McNamara, and Chief Newsham commended the work of those who investigated the case from the FBI’s Washington Field Office and MPD. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Candace Battle and Jeannette Litz, Assistant U.S. Attorney Laura Crane, who assisted with the investigation, and Assistant U.S. Attorneys Christopher Macchiaroli and David Misler, who prosecuted the case.
District Man Pleads Guilty to Murder Charge Related to 2016 Shooting in Northeast WashingtonRead the Press Release
WASHINGTON – Nathaniel Taylor, 23, of Washington D.C., has pled guilty to a charge of second-degree murder while armed stemming from his involvement in a confrontation that ended with him shooting the victim in the back of the head, announced U.S. Attorney Jessie K. Liu and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Taylor pled guilty on Dec. 10, 2018, in the Superior Court of the District of Columbia. The plea calls for a sentence of up to 20 years in prison. He is to be sentenced on March 8, 2019, by the Honorable Juliet McKenna.
According to a proffer of facts submitted at the plea hearing, the shooting took place at approximately 10:38 p.m. on April 23, 2016 in the 4900 block of Just Street NE. The victim, Nuru Frenche, had travelled with a friend to meet with Taylor and his co-defendant, Anthony Blackmone, for the purpose of purchasing firearms. Both of the victims were unarmed.
After Mr. Frenche exited the car holding at least $500 in cash, Taylor initiated a confrontation with him. The confrontation ended with Taylor firing his weapon at Mr. Frenche and shooting him in the back of the head. Mr. Frenche’s friend escaped. Shortly thereafter, officers from the Metropolitan Police Department’s Seventh District responded to the scene and located Mr. Frenche, 23, who died from his wounds a few days later.
Blackmone, 23, of Washington, D.C., was arrested in May of 2016 and pled guilty earlier this year to charges of voluntary manslaughter and attempted robbery for his role in the crimes. . Taylor was arrested in February of 2017 and has remained incarcerated ever since.
In announcing the plea, U.S. Attorney Liu and Chief Newsham commended the work of those who investigated the case from the Metropolitan Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Investigative Analyst Zachary McMenamin; Forensic Examiner John Marsh; Paralegal Specialists Stephanie Gilbert, Meridith McGarrity, and Stephanie Siegerist; Litigation Technology Specialist Leif Hickling; Victim/Witness Service Coordinators Katina Adams-Washington and LaJune Thames, Witness Security Specialist M. LaVerne Perry, and Victim/Witness Advocate James Brennan.
Finally, they commended the work of Assistant U.S. Attorneys Gilead Light and John Timmer, who investigated and prosecuted the case.
Detroit Man Pleads Guilty to Federal Fentanyl ChargeRead the Press Release
HUNTINGTON, W.Va. – A Detroit man caught with fentanyl earlier this year in Huntington pled guilty yesterday to a federal drug charge, announced United States Attorney Mike Stuart. Maurice D. Eaddy, Jr., 20, entered a guilty plea to possession with intent to distribute fentanyl in federal court in Huntington. Stuart commended the investigative efforts of the Huntington Police Department.
“Drug dealers peddling fentanyl, or other illicit drugs laced with fentanyl, will face federal drug charges,” said United States Attorney Mike Stuart. “We aim to reduce the supply of fentanyl through aggressive prosecution of fentanyl dealers and ultimately save lives.”
On May 23, 2018, officers with the Huntington Police Department were conducting surveillance at the Greyhound bus station in Huntington when they observed Eaddy and another individual known to investigators arrive on a bus from Detroit. Officers continued to conduct surveillance and observed Eaddy and the other individual enter a residence on West 7th Avenue in Huntington. Eaddy was then seen leaving the residence and entering a vehicle which was subsequently stopped by officers. During the traffic stop, officers recovered a bag containing over 100 grams of fentanyl from Eaddy. Eaddy admitted that he was taking the fentanyl to a local motel to store it for the other individual and that he intended to provide additional fentanyl to the driver of the vehicle in which he was riding during the stop.
Eaddy faces up to 20 years in federal prison when he is sentenced on March 11, 2019.
Assistant United States Attorney Joseph F. Adams is handling the prosecution. The plea hearing was held before United States District Judge Robert C. Chambers.
This case is being prosecuted as part of Operation Synthetic Opioid Surge (S.O.S.), an enforcement surge that seeks to reduce the supply of deadly synthetic opioids in high impact areas.
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DEA Agent Arrested for Participating in Decade-Long Narcotics Conspiracy and Providing Firearms to Drug Trafficking OrganizationRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Philip R. Bartlett, Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), Ari C. Shapira, Special Agent in Charge of the Miami Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and Robert A. Bourbon, Special Agent in Charge of the Miami Field Office of the United States Department of Justice, Office of the Inspector General (“DOJ OIG”), announced the unsealing today of an Indictment charging DEA agent FERNANDO GOMEZ for his participation in a conspiracy to distribute cocaine and his possession of firearms, and aiding and abetting the possession of firearms, in furtherance of that drug conspiracy. GOMEZ was arrested this morning in Chicago and will be presented Magistrate Judge Susan E. Cox in the Northern District of Illinois this afternoon.
As alleged in the Superseding Indictment[1], GOMEZ, while working as a detective with the City of Evanston Police Department in Illinois, obtained firearms from drug dealers, transported those firearms to Puerto Rico, and provided those firearms to Jose Martinez-Diaz, a/k/a “Tony Zinc,” who is also charged in the Superseding Indictment. GOMEZ then joined the DEA so that he could help members of the narcotics conspiracy, including Martinez-Diaz, evade prosecution by law enforcement.
Martinez-Diaz was previously charged for his participation in La Organizacion de Narcotraficantes Unidos (“La ONU”), a racketeering enterprise involved in drug dealing and murders. Eight other members of La ONU were also charged with various racketeering, drug trafficking, murder, and firearms offenses. In addition to the charges against GOMEZ, the Superseding Indictment contains charges that had previously been brought against Martinez-Diaz and the eight other defendants. The case is assigned to U.S. District Judge Jesse M. Furman.
U.S. Attorney Geoffrey S. Berman said: “Fernando Gomez is a special agent of the DEA, an organization committed to upholding the nation’s drug laws and relentless in its pursuit of narcotics traffickers. But as alleged, Gomez joined the DEA to betray those laws, and to help narcotics traffickers evade detection by law enforcement. He will now be prosecuted to the full extent of the law.”
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FERNANDO GOMEZ, 41, of Chicago, Illinois, is charged in the Superseding Indictment with one count of participating in a narcotics conspiracy involving the distribution of five kilograms or more of cocaine, and one count of using and carrying firearms during and in relation to the narcotics conspiracy, possessing firearms in furtherance of the narcotics conspiracy, and aiding and abetting and the possession of firearms, some of which were brandished and discharged. GOMEZ faces a maximum penalty of life in prison and a mandatory minimum penalty of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of USPIS, DEA, ATF, DOJ OIG, and the Special Agents of the United States Attorney’s Office for the Southern District of New York.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jordan Estes, Andrew Thomas, and Lara Pomerantz are in charge of the prosecution.
The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Superseding Indictment and the descriptions of the Superseding Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Crawford County Man Charged with Offenses related to the Sexual Exploitation of ChildrenRead the Press Release
ERIE, Pa. - A resident of Spartansburg, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of violating federal laws relating to the sexual exploitation of children, United States Attorney Scott W. Brady announced today.
The 16-count second superseding indictment named Michael Robert Heinrich, 67, as the sole defendant.
According to the superseding indictment presented to the court, Heinrich took sexually explicit photos of two minor victims who were under the age of five. Heinrich also possessed computer images depicting other minors engaging in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The law provides for a maximum total sentence of 470 years in prison, a fine of $4,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police 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.
Court Orders $857,868 in Penalties Against Technical Marine Maintenance Texas and Gulf Coast Workforce in Immigration-Related Discrimination LawsuitRead the Press Release
The Department of Justice announced that it has received a court order yesterday awarding the United States $857,868 in civil penalties, along with other relief, in the Department’s immigration-related employment discrimination lawsuit against Louisiana-based Technical Marine Maintenance Texas LLC (TMMTX), which provides contract shipyard labor, and Gulf Coast Workforce LLC (GCW), a related company. The court previously found that the companies violated the Immigration and Nationality Act (INA) by discriminating against workers based on their citizenship status during the employment eligibility verification process.
The court’s Dec. 10 order follows its June 28 ruling that from at least January 2014 until at least July 2017, TMMTX limited the types of documentation different groups of workers could provide to establish their work authorization based on the workers’ citizenship status. The United States’ complaint against the company, filed in July 2017, alleged that the company asked U.S. citizens to produce “IDs” and Social Security cards, while requesting immigration documents from non-U.S. citizens. After the companies refused to comply with court procedures and orders during the litigation, the court sanctioned the companies and held both companies liable for discriminatory documentary practices. The INA prohibits employers from limiting workers’ choice of documentation to present for employment verification based on the workers’ citizenship, immigration status, or national origin.
The Dec. 10 order resolves outstanding issues about the penalties and remedies to be awarded to the United States. In adopting the Department’s penalty recommendation, the court considered TMMTX’s and GCW’s misconduct during the litigation and the companies’ ongoing failure to submit any evidence to the court. In addition to the $857,868 civil penalty for which TMMTX and GCW are jointly and severally liable, the court’s order yesterday granted the Department’s request that the companies train their staff on the INA and be subject to departmental monitoring and reporting requirements for three years.
“The Civil Rights Division works tirelessly to enforce laws that protect U.S. citizens and non-U.S. citizens from discriminatory conduct in the workplace,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “Today’s decision reminds employers that they must take seriously their obligations to avoid citizenship status-based discrimination in the employment eligibility verification process.”
The Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation and intimidation.
For more information about protections against employment discrimination under immigration laws, call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar; email [email protected]; or visit IER’s English and Spanish websites.
Applicants or employees who believe they were subjected to retaliation; different documentary requirements based on their citizenship, immigration status or national origin; or discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral for a fee, should contact IER’s worker hotline for assistance.
Coordinated Health and CEO Pay $12.5 Million to Resolve False Claims Act Liability for Fraudulent BillingRead the Press Release
PHILADELPHIA, PA – United States Attorney William M. McSwain announced today that Coordinated Health Holding Company, LLC (“Coordinated Health”) and its founder, principal owner, and Chief Executive Officer, Emil DiIorio, M.D., agreed to settle allegations under the False Claims Act that they submitted false claims to Medicare and other federal health care programs for orthopedic surgeries. Coordinated Health agreed to pay $11.25 million and DiIorio agreed personally to pay $1.25 million, for total settlement of $12.5 million. Coordinated Health has also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services that will require regular monitoring of its billing practices for five years.
Coordinated Health is a for-profit hospital and health system based in the Lehigh Valley region of Pennsylvania. It employs approximately 100 physicians, approximately 30 of whom are board-certified orthopedic surgeons. Dr. DiIorio is a board-certified orthopedic surgeon.
The government alleges that Coordinated Health and Dr. DiIorio engaged in a scheme to improperly unbundle claims for reimbursement for orthopedic surgeries in order to artificially inflate reimbursements from federal healthcare payers. Medicare and other public healthcare insurers reimburse physicians and hospitals a global fee for many types of orthopedic surgeries. The global fee is a single payment for all parts of a surgery. Although electronic safeguards automatically block separate reimbursements for parts of the same surgery when the global fee is paid, those safeguards can sometimes be circumvented when billing codes are misused. For example, a medical provider can circumvent the system by affixing a billing code, Modifier 59, to its request for payment. That billing code informs the payer that a separately billed service was not part of the original surgery and is appropriate to separately pay. It is improper “unbundling” when a provider submits a claim for a global reimbursement for a surgery and misuses Modifier 59 to separately bill for parts of the same surgery.
The government alleges that from 2007 through mid-2014, Coordinated Health routinely exploited Modifier 59 to improperly unbundle orthopedic surgery claims, including for many total joint replacement and arthroscopic surgeries. As a consequence, federal healthcare payers, including Medicare and Medicaid, overpaid Coordinated Health by millions of dollars.
The government further alleges that Dr. DiIorio should have stopped the illegal unbundling. Instead, beginning in April of 2009, Dr. DiIorio changed how he wrote operative reports so that Coordinated Health billers could maximize improperly unbundled reimbursements for his knee, hip and shoulder surgeries using Modifier 59.
For example, in his total knee replacement operative reports prior to April 2009, Dr. DiIorio rarely diagnosed any patient with poor patellar tracking and stated in almost every report that an incision sometimes necessary to improve patellar tracking, called a “lateral retinacular release,” was unnecessary. A lateral retinacular release performed during a total knee replacement is part of the global surgery reimbursement for a knee replacement. However, in almost every knee replacement operative report after April 1, 2009, Dr. DiIorio diagnosed the patient with poor patellar tracking and stated he performed a lateral retinacular release. Each time, Coordinated Health used Modifier 59 to improperly bill for a lateral retinacular release as if one was performed separate from the knee replacement.
Top Coordinated Health executives were directly informed at least twice that Coordinated Health improperly unbundled many orthopedic surgeries by misusing Modifier 59. Two separate outside coding consultants hired by Coordinated Health, one in 2011 and one in 2013, identified the improper unbundling during coding audits and warned Coordinated Health to stop. The 2013 consultant specifically advised Coordinated Health to self-report and repay Medicare and other federal payers; the consultant also provided on-site training on the proper use of Modifier 59 to Coordinated Health coders in November 2013. Motivated by its bottom line, Coordinated Health simply ignored the consultants’ recommendations and continued abusing Modifier 59 to improperly unbundle orthopedic surgery claims until mid-2014.
“The alleged corporate culture and leadership that promoted this conduct and allowed it to continue despite crystal clear warnings is shameful,” said U.S. Attorney William M. McSwain. “If true, it amounts to theft of public funds and a fraud on Medicare, Medicaid, and federal employee health insurers. We are unaware of any unbundling scheme that has had a bigger impact on federal funds. My Office will continue to hold businesses and individuals accountable for this type of wrongdoing.”
“We expect providers to play by the rules and to act responsibly,” said Maureen R. Dixon, Special Agent in Charge for U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) in Philadelphia. “Providers who fail to follow the rules should expect to be investigated by HHS-OIG and our fellow law enforcement partners.”
“I would like to express my gratitude for the dedication and professionalism exhibited by our staff, their law enforcement partners, and the U.S. Attorney’s Office in the investigation and prosecution of this matter,” said Thomas W. South, Deputy Assistant Inspector General for Investigations, U.S. Office of Personnel Management. “Their efforts protect the Federal Employee Health Benefits Program from those who would seek to defraud the program through unscrupulous and illegal billing practices.”
Kenneth Cleevely, U.S. Postal Service Office of Inspector General Special Agent in Charge, Eastern Area Field Office, stated the following: “Benjamin Franklin stated ‘There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government.’ I believe that quote rings true in this case. When health care providers choose to take advantage of the federal workers compensation program, Special Agents with the U.S. Postal Service Office of Inspector General will work with our law enforcement partners to see that they are held accountable. To report health care fraud relating to the Postal Service, contact special agents at www.uspsoig.gov or 888-USPS-OIG.”
“Coordinated Health and Dr. Dilorio fraudulently billed federal health care programs, including the U.S. Department of Labor’s Office of Workers’ Compensation Programs (OWCP), for the reimbursement of false claims submitted for orthopedic surgery procedures. We will continue to work with OWCP and our law enforcement partners to protect the integrity of the Federal Employees’ Compensation Act,” said Richard Deer, Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, U.S. Office of Personnel Management Office of the Inspector General, the United States Postal Service Office of Inspector General, and the Department of Labor Office of Inspector General. For the U.S. Attorney’s Office, the investigation and settlement were handled by Assistant U.S. Attorney John T. Crutchlow and Auditor George Niedzwicki.
Columbus Woman Sentenced for Committing Tax FraudRead the Press Release
COLUMBUS, Ohio – Tawnya Writesel, also known as Tawnya Rutan, 40, of Columbus, was sentenced in U.S. District Court to 12 months and one day in prison and was ordered to pay more than $108,000 in restitution to the Internal Revenue Service (IRS) for conspiring to submit false claims for income tax refunds with the IRS.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office, announced the sentence handed down by Senior U.S. District Judge James L. Graham.
According to court documents, between April 2012 and September 2015, Writesel conspired to defraud the IRS by filing approximately 100 false income tax returns in an attempt to obtain fraudulent income tax refunds totaling approximately $548,382.00. As a result of the false income tax return filings, a total of $226,677.50 in fraudulent income tax refunds was released by the IRS to Writesel and/or other co-conspirators.
Writesel used the identification of real people, including names, social security numbers and dates of birth, and used the identifying information as either the taxpayers or the dependents on the false income tax returns. The majority of these false tax returns contained fictitious information including false Schedule C income and expenses, and fraudulently claimed education and Earned Income Credits.
Co-defendants Michael (also known as Mickey) A. Prisley, Amy K. France and Denard T. Nelson were also charged in relation to this case.
Prisley was an attorney licensed to practice law in the State of Ohio and had served as an assistant prosecuting attorney for Athens County from approximately August 2011 through January 2014. Prisley pleaded guilty in April 2018 to one count of conspiracy to submit false claims and is awaiting sentencing. Prisley was sentenced in September 2018 to twelve months and one day in prison and was ordered to pay $250,220 in restitution.
France pleaded guilty in June 2016 to one count of conspiracy to submit false claims and one count of identity theft and was sentenced in January to 37 months in prison. France was also ordered to pay nearly $467,000 in restitution.
Nelson pleaded guilty in September 2015 to one count of identity theft and was sentenced in May 2016 to five years of probation. He was also ordered to pay more than $87,000 in restitution.
“This is the last defendant to be sentenced in this conspiracy, one in which they all chose to line their pockets with stolen income tax refunds,” said Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
U.S. Attorney Glassman commended the investigation of this case by the IRS Criminal Investigation, and Assistant United States Attorney Jessica H. Kim, who prosecuted the case.
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Columbus Couple Charged with Crimes Related to Violent, Armed Bank Robbery in WhitehallRead the Press Release
COLUMBUS, Ohio – A federal grand jury has charged two Columbus individuals with crimes related to an armed robbery in September in Whitehall.
Robert K. Mason, 42, and Bretta L. Nallen, 43, both of Columbus, were charged in the indictment returned here yesterday.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Todd Wickerham, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, Whitehall Police Chief Mike Crispen and Columbus Police Chief Kim Jacobs announced the charges.
According to the indictment, on September 26, 2018, Mason stole more than $12,000 from the Huntington National Bank on East Broad Street in Whitehall during an armed robbery.
An affidavit in this case details that, upon entering the bank, Mason brandished a handgun and ordered customers to the floor. He allegedly vaulted the counter and demanded money from bank tellers, striking two of the tellers with the gun.
One bank employee was struck in the back of the head and one was struck in the face.
From September 26 until November 2, 2018, Nallen allegedly served as an accessory to the crime by misleading authorities in order to evade Mason’s apprehension.
Both defendants also allegedly conspired to tamper with evidence by attempting to hide the firearm used during the robbery.
Specifically, Mason is charged with one count of bank robbery (up to 25 years), one count of conspiracy to tamper with evidence (up to 20 years), and one count of using a firearm during a crime of violence, (seven years up to life in prison).
Nallen is also charged with one count of conspiracy to tamper with evidence, as well as one count of being an accessory after the fact, a crime punishable by up to 15 years in prison.
The defendants are scheduled to appear in federal court today at 2:30pm before U.S. Magistrate Judge Chelsey M. Vascura.
U.S. Attorney Glassman commended the investigation of this case by the FBI and Whitehall and Columbus divisions of police, as well as Assistant United States Attorneys David M. DeVillers and S. Courter Shimeall, who are prosecuting the case.
An indictment merely contains allegations, and the defendants are presumed innocent unless proven guilty in a court of law.
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California Man Given More than 15 Years in Prison for Trading Cocaine for Machine Gun, Other FirearmsRead the Press Release
MEDFORD, Ore. – Gonzalo Manzo, 33, of Fresno, California, was sentenced today to 188 months in federal prison and three years’ supervised release for conspiracy to distribute and possess with intent to distribute cocaine and possession of a firearm in furtherance of a drug trafficking crime.
According to court documents, in 2017, Manzo coordinated the shipment of a kilogram of cocaine from California to Southern Oregon. Manzo and his co-conspirators sold the cocaine to undercover agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in Oregon in exchange for six Colt .38 Super caliber pistols, two Beretta 9mm pistols with silencers, a Glock 9mm machine gun and $21,000 in cash. Manzo intended for the firearms and cash to be transported back to California but agents arrested Manzo and his co-conspirators and the firearms were seized by law enforcement.
Manzo previously pleaded guilty to one count each of conspiracy to distribute and possess with intent to distribute cocaine and possession of a firearm in furtherance of a drug trafficking crime on April 27, 2018.
The case was investigated by ATF and prosecuted by Nathan J. Lichvarcik and Adam E. Delph, Assistant U.S. Attorneys for the District of Oregon.
The 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. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Photos 1-3: Firearms received in exchange for cocaine
Photos 4-7: Screenshots from a 2015 YouTube music video depicting Manzo with firearms
Buffalo Man Sentenced to 300 Months in Prison Following RICO ConvictionRead 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 Kevin Allen, 38, aka Killer Kev, of Buffalo, NY, who was convicted following a seven-week jury trial of multiple RICO, drug and gun charges, was sentenced to serve 300 months in prison by U.S. District Judge Richard J. Arcara. The sentence will be served consecutive to a 25 year to life sentence imposed by New York State following the defendant’s conviction on a murder charge.
Allen was convicted along with co-defendant Thamud Eldridge of Racketeering Influenced Corrupt Organization (RICO), RICO conspiracy, narcotics conspiracy, possession of firearms in furtherance of drug trafficking, and the trial included evidence of the defendant’s role in conspiring to target drug dealers for gun-point robberies, and included evidence the Allen conspired to kidnap and rob a Buffalo-area drug dealer of kilograms of cocaine.Assistant U.S. Attorneys Joseph M. Tripi and Meghan A. Tokash, who handled the prosecution of the case, stated Allen and Eldridge were members and associates of a criminal organization which operated on the East Side of Buffalo from 2003 until 2005. The organization was found by the jury to be a violent group of gang members who specialized in targeting and then robbing drug dealers in and around the City of Buffalo, intending to steal their illegal drugs, money, and jewelry. Allen, Eldridge, and their associates were also accused in the Indictment of invading victim’s homes, threatening residents at gun point for money and other items of value, and kidnapping drug dealers.
One victim who testified for the Government at trial, told the jury that Allen and Eldridge came to his home seeking money and drugs, then forcibly kidnapped him--forcing him into their vehicle with a gun into his neck. They drove the victim to another location in Buffalo where the victim stored his drugs. The dealer said his life was spared only because he was able to give them two kilograms of cocaine.Another Government witness testified that he was robbed of money at gunpoint in the driveway of his family home.
Other victims of a home invasion masterminded by Eldridge testified that their arms and legs were bound with duct tape while they were held at gunpoint--execution style. One victim was handicapped and duct taped to his wheelchair. While Eldridge's associates tried to break into the upper apartment which belonged to a known drug dealer, he casually smoked a cigar. That cigar was collected by crime scene detectives and later tested for DNA which confirmed Eldridge's presence at the crime scene.
Victims testified about the terror they experienced--one told the Court she dialed 9-1-1 underneath a couch so Eldridge and his gang members would not detect her attempts at contacting law enforcement. Eldridge and associates escaped before police arrived--only to be caught be his DNA left at the crime scene.Additionally, the members of the enterprise and their associates distributed quantities of cocaine, crack cocaine, heroin and marijuana, and planned conspired, attempted and committed robberies and murders against other rival drug dealers in order to enhance their street credibility on the East Side of Buffalo.
“The reign of terror engaged in by these defendants has come to a familiar ending, with federal convictions and sentences that will result in those charged spending all or most of the rest of their lives in jail,” noted U.S. Attorney Kennedy. “Fittingly, yet somewhat ironically, the most valuable item taken by each of these robbers was their own lifetime worth of freedom.”
Thamud Eldridge was previously sentenced to serve 50 years in prison.
Today’s sentencing is the culmination of an investigation on the part of the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent in Charge Gary Loeffert; the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special-Agent-in-Charge Ashan Benedict; the New York State Police, under the direction of Major Edward Kennedy, and the Buffalo Police Department, under the direction of Commissioner Byron Lockwood.# # # #
Braxton County man sentenced for firearms and drug chargesRead the Press Release
ELKINS, WEST VIRGINIA – Charles William Masters, of Burnsville, West Virginia, was sentenced today to 101 months incarceration for firearms and drug charges, United States Attorney Bill Powell announced.
Masters, age 44, pled guilty to one count of “Possession with Intent to Distribute Methamphetamine,” and one count of “Carry a Firearm During a Drug Trafficking Crime” in April 2018. Masters admitted to illegally possessing a 9mm pistol while possessing methamphetamine on July 3, 2017 in Lewis County, West Virginia.
This case was brought as part of Project Safe Neighborhoods (PSN). Project Safe Neighborhoods is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Bureau of Alcohol, Firearms, Tobacco and Explosives, the Drug Enforcement Administration, and the Lewis County Sheriff’s Office investigated.
The investigation was funded in part by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. District Judge John Preston Bailey presided.