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12 December 2018
Former Nurse at Department of Veterans Affairs Medical Center Indicted on Charges of Fraudulently Obtaining Controlled Substances for His Own PurposesRead the Press Release
RALEIGH – Robert J. Higdon, Jr., the United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Greenville has returned an indictment charging AARON WAYNE PICKRELL, a former registered nurse at the Department of Veterans Affairs Medical Center in Fayetteville, North Carolina, with five counts of obtaining possession of hydromorphone, a Schedule II controlled substance, by misrepresentation, fraud, forgery, deception, and subterfuge.
The indictment alleges that on various dates, PICKRELL falsely reported through the Medical Center’s computer system that a physician had given an order for a controlled substance to be administered to a patient when no such order had been issued, thereby gaining access to the VA’s automated dispensing pharmacy system in order to fraudulently obtain controlled substances that he then diverted for his own purposes.
For each count, if convicted, PICKRELL would face maximum penalties of four years’ imprisonment, a fine of $250,000 or both fine and imprisonment, and a term of supervised release following any term of imprisonment.
This case is part of the Take Back North Carolina Initiative, a strategy implemented by United States Attorney’s Office for the Eastern District of North Carolina. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement.
The charges and allegations contained in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty in a court of law.
This case was brought by the United States Attorney’s Office through partnerships with the Department of Veterans Affairs Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Scott A. Lemmon.
Former DoD Employee Pleads Guilty to $1.4 Million FraudRead the Press Release
NEWPORT NEWS, Va. – A Matthews woman pleaded guilty today to defrauding the federal government of over $1.4 million in a long-running time and attendance fraud scheme.
“Federal service is a public trust that demands of employees the highest degree of integrity in the workplace,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “As stewards of that trust, we must ensure that those in such positions are held fully accountable for breaches that put personal enrichment in place of public service.”
According to court documents, Michelle M. Holt, 52, was previously employed as a federal employee for the Department of Defense. Holt worked as a secretary for U.S. Air Force at Joint Base Langley-Eustis. In that capacity, Holt was a salaried employee on the General Schedule (GS) grade for the federal civilian workforce and was entitled to overtime pay if authorized by her employer, and also to other forms of holiday and annual leave, as well as premium pay for any federal holidays worked.
A law enforcement investigation determined that from December 2001 to July 2018, Holt falsely claimed over 42,000 hours in unauthorized overtime that she did not work, as well as other amounts of unauthorized holiday leave, sick leave and annual leave, all amounting to losses to the United States of $1,460.262.43. In recent years, Holt’s overtime pay was over double that of her regular salary. She accomplished the fraud by making manual retroactive adjustments to protected computer time and attendance systems to add overtime, reverse leave taken and reverse holiday leave. In doing so, Holt used another employee’s log-in information without that employee’s knowledge or authorization.
Holt pleaded guilty to charges of computer fraud and theft of government property and faces a maximum penalty of 15 years in prison when sentenced on March 13. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Robert Craig, Special Agent in Charge for Defense Criminal Investigative Service Mid-Atlantic Field Office, and Colonel Kirk B. Stabler, Commander of the Air Force Office of Special Investigations, made the announcement after U.S. District Judge Raymond A. Jackson accepted the plea. Assistant U.S. Attorney Brian J. Samuels is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:18-cr-93.
Former Congressional Staffer Sentenced to Prison for Extensive Fraud and Election Crimes SchemeRead the Press Release
A former congressional staffer was sentenced today to 18 months in prison and ordered to pay $800,000 in restitution, to be followed by three years of supervised release, for participating in a multi-year scheme to defraud charitable donors of hundreds of thousands of dollars and secretly to funnel the proceeds to pay for personal expenses and to illegally finance campaigns for federal office.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas, Assistant Director in Charge Nancy McNamara of FBI’s Washington Field Office and Special Agent in Charge D. Richard Goss of the IRS Criminal Investigation (IRS-CI) Houston Field Office made the announcement.
Thomas Dodd, 40, of Houston, Texas, was sentenced in the U.S. District Court for the Southern District of Texas by Chief U.S. District Judge Lee H. Rosenthal. Dodd was also ordered to forfeit $153,044.28 in illicit gains. Dodd pleaded guilty on March 20, 2017, to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to make conduit contributions and false statements. As part of his plea, Dodd admitted that he participated in a scheme led by former U.S. Representative Stephen E. Stockman, 62, who was convicted by a federal jury in Houston on April 12 of 23 counts of mail fraud, wire fraud, conspiracy to make conduit contributions and false statements to the Federal Election Commission (FEC), making false statements to the Federal Election Commission, making excessive coordinated campaign contributions, money laundering, and filing a false tax return. Another of Stockman’s former congressional staffers, Jason T. Posey, 48, of Tupelo, Mississippi, pleaded guilty on Oct. 11, 2017, to one count of mail fraud, one count of wire fraud, and one count of money laundering.
According to the evidence presented at Stockman’s trial, from May 2010 to February 2014, Stockman and his co-defendants solicited $1,250,571.65 in donations from charitable organizations and the individuals who ran those organizations based on false pretenses, then used a series of sham nonprofit organizations and dozens of bank accounts to launder the money before it was used for a variety of personal and campaign expenses.
Specifically, the evidence established that in 2010, Stockman and Dodd solicited an elderly donor in Baltimore, Maryland for $285,000 to be used for legitimate charitable and educational purposes. Stockman and Dodd used a sham charity named the Ross Center to funnel the money to be used for a variety of personal expenses. The evidence further established that, in 2011 and 2012, Stockman and Dodd received an additional $165,000 in charitable donations from the Baltimore donor, much of which Stockman used illegally to finance his 2012 congressional campaign.
The trial evidence also showed that shortly after Stockman took office as a member of the U.S. House of Representatives in 2013, he and Dodd used the name of another sham nonprofit entity, Life Without Limits, to solicit and receive a $350,000 charitable donation, to be used to create an educational center called the Freedom House. Stockman, Dodd, and Posey instead used this donation for a variety of personal and campaign expenses, including illegal conduit campaign contributions, a covert surveillance project targeting a perceived political opponent, an in-patient alcoholism treatment for a female associate, and payments for hundreds of thousands of robocalls and mailings promoting Stockman’s candidacy for U.S. Senate in early 2014.
In addition, the evidence established that, in connection with Stockman’s Senate campaign, Stockman and Posey used another sham nonprofit entity to secure a $450,571.65 donation in order to fund a purportedly legitimate independent expenditure promoting Stockman’s candidacy. The evidence showed that the purportedly independent expenditure was in fact secretly controlled by Stockman, who directed his campaign and Posey to file false affidavits with the FEC covering up Stockman’s involvement.
Finally, the evidence at trial demonstrated that Stockman failed to pay taxes on any of the $1,250,571.65 in fraudulently acquired donations. In addition, during the early stages of the investigation, Stockman directed Posey to flee to Cairo, Egypt, for two and a half years so that Posey could not be questioned by law enforcement.
The FBI and IRS-CI investigated the case. Deputy Chief Robert J. Heberle and Trial Attorney Ryan J. Ellersick of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Melissa Annis of the Southern District of Texas are prosecuting the case.
Former Chairman of Boston-Based Biomedical Company Sentenced for Making False StatementsRead the Press Release
BOSTON – The former chairman of a Boston-based biomedical company, previously called Endeavor Power Corp., was sentenced today for making false statements to the U.S. Securities and Exchange Commission (SEC) in connection with the SEC’s investigation into a scheme to defraud the market for Endeavor’s publicly traded stock.
Edward Withrow III, 53, of Malibu, Calif., was sentenced by U.S. District Court Chief Judge Patti B. Saris to five months of home detention, five years of probation and ordered to pay a fine of $10,000. In May 2018, he pleaded guilty to one count of making false statements. In October 2015, Withrow and Marco Babini, 57, who is believed to reside in Vancouver, Canada, were charged in an indictment. Babini remains at large and is charged with one count of conspiracy, one count of securities fraud and two counts of wire fraud.
By March 2013, the SEC had suspended trading in the securities of Endeavor, but they continued to investigate through at least August 2013. Withrow provided sworn testimony to the SEC relating to questions about who owned approximately 40 million unrestricted shares of Endeavor’s stock (i.e., shares that can be freely bought and sold in the securities market), and whether Withrow ever tried to determine who owned those shares. Withrow admitted that he misled the SEC about his knowledge of these Endeavor shares—most of which had been stashed in Switzerland—and Babini’s association with those shares.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. SEC Attorney Eric A. Forni, who was appointed as a Special Assistant U.S. Attorney, is prosecuting the case.
The remaining defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Buffalo Police Lieutenant Sentenced on Federal Civil Rights 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 Gregory Kwiatkowski, 54, of Buffalo, NY, who was convicted of deprivation of rights under color of law, was sentenced to serve four months in prison by Senior U.S. District Judge William M. Skretny. The defendant was also sentenced to one year supervised release to include four months home detention.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that the conviction stems from a series on incidents which occurred while defendant Kwiatkowski was working the overnight shift as a Lieutenant with the City of Buffalo Police Department (BPD) on May 30-31, 2009. That night, Lt. Kwiatkowski arrived at 52 Treehaven Road in Buffalo to respond to a vehicle that had been stopped by the Cheektowaga Police Department (CPD) and that was believed to be involved in an ongoing series of BB gun shootings, including one which occurred earlier that night. Lt. Kwiatkowski was the first BPD officer to arrive at the scene. Other CPD officers were present at the scene when Lt. Kwiatkowski arrived and had already removed the vehicle’s four occupants, who were all between 16 and 18 years old. At the time of Lt. Kwiatkowski’s arrival, all of the occupants were compliant and completely under the control of the CPD officers.
Upon arriving at the scene, Lt. Kwiatkowski used unlawful and unreasonable force on each of the four occupants. Specifically, Lt. Kwiatkowski admitted to forcibly pushing each of the suspects heads and upper torsos into the vehicle around which they were being detained. As set forth in his plea agreement with the government, Lt. Kwiatkowski agreed that his use of force against the four suspects was unreasonable and excessive and that his use of such use of force deprived the suspects of their Constitutional rights to be free from unreasonable seizure and to due process of law, by one acting under color of law.
Following the defendant’s use of force on the four occupants, the defendant recovered a BB gun from the vehicle in which the suspects had been riding and handed the BB gun to one of the other two BPD Officers, Raymond Krug and Joseph Wendel, who had arrived on scene shortly after the defendant. Krug and Wendel, who were accused of shooting one of the individuals with the BB gun while that individual was handcuffed next to another arrested individual in the back seat of the police car, were acquitted following a trial.
Today’s sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Gary Loeffert, Special Agent-In-Charge, and the Buffalo Police Department, under the direction of Commissioner Byron Lockwood.
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Former Bergen County, New Jersey, Man Arrested in Kansas on Charges of Running $900,000 Foreign Currency Ponzi SchemeRead the Press Release
NEWARK, N.J. – A former Bergen County, New Jersey, man was arrested today in Park City, Kansas, on charges that he defrauded at least 20 people by soliciting investments in what he claimed were highly successful financial instruments, but which was actually a Ponzi scheme, U.S. Attorney Craig Carpenito announced.
Thomas Lanzana, 51, formerly of Midland Park, New Jersey, and now residing in Pawleys Island, South Carolina, was charged by complaint with one count each of wire fraud and commodities fraud. He is scheduled to have his initial court appearance today in Wichita federal court.
According to the criminal complaint:
As early as 2013, Lanzana fraudulently solicited approximately $900,000 from at least 20 customers to invest in algorithm-based trading pools in foreign currency derivatives (forex) and other financial instruments. He falsely claimed to prospective customers that he was a successful forex trader. Lanzana allegedly took several steps to keep his customers’ trust: he sent them false account statements; he posted false monthly account statements to his companies’ websites showing balances, some in excess of $800,000, for forex trading accounts that did not exist; and he sent false tax documents to customers reporting earnings that did not exist.
Lanzana misappropriated at least $350,000 in customer funds, using some to repay earlier investors in the manner of a Ponzi scheme, and to pay for his personal expenses, including purchases on Amazon, payments to a luxury car dealer and a jewelry retailer, and golf expenses.
The count of mail fraud with which Lanzana is charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss caused by the scheme. The count of commodities fraud carries a maximum potential penalty of 10 years in prison and a fine of $1 million, or twice the gross gain or loss.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, and special agents of IRS-Criminal Investigation, under the direction of John R. Tafur, with the investigation leading to the arrest. He also thanked the U.S. Commodity Futures Trading Commission’s Division of Enforcement for its role in the investigation.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office’s Cyber Crime Unit.
The charges and allegations in the complaint are merely accusations, and he is presumed innocent unless and until proven guilty.
Former 5LINX Owner Sentenced to 14 Months in PrisonRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y.- U.S. Attorney James P. Kennedy, Jr. announced today that Jeb Tyler, 45, of Rochester, NY, who was convicted of conspiracy to commit wire fraud and filing a false tax return for the year 2012, was sentenced to serve 14 months in prison by U.S. District Court Judge David G. Larimer. The defendant was also ordered to pay $2,759,633 in restitution.
Assistant U.S. Attorney Richard A. Resnick, who handled the prosecution, stated that in 2001, the defendant, together with Craig Jerabeck and Jason Guck started 5LINX Enterprise, Inc. (5LINX), a multi-level marketing company headquartered in Rochester, which offered utility and telecommunications services, health insurance, nutritional supplements, and business services. 5LINX used independent representatives to sell products and services, and to recruit additional representatives. Jerabeck was President and Chief Executive Officer, Guck was Vice President and Secretary, and the defendant was Vice President.
In June 2006 and July 2006, the defendant, Jerabeck, and Guck sold 5LINX stock for $5,500,000 to three investment companies, Trillium Lakefront Partners III, L.P.; Trillium Lakefront Partners III, NY L.P.; and Shalam Investment Co., L.L.C. (collectively known as "the Investors"). Between May 2010 and April 2016, 5LINX sold and distributed products for a Florida vendor. The defendant, along with Jerabeck and Guck, and without the knowledge of the Investors, Board of Directors, or other stockholders, conspired and agreed to cause the Florida vendor to pay them personally or companies they owned approximately $2,310,510, which their Stockholders Agreements prohibited them from receiving. 5LINX, its investors, as owners between 2006 and January 2014, and as creditors thereafter, and stockholders were entitled to and should have received such funds instead of defendant, Guck, and Tyler.
The Judge at sentencing also referenced that the defendant, Jerabeck and Guck engaged in additional fraudulent conduct by representing themselves as “fictitious representatives” of 5Linx, resulting in them receiving approximately $12,000,000 in fraudulent proceeds.
In addition, the defendant provided material false information on his personal tax returns, Forms 1040, for the years 2011 through 2013, and 2015. Specifically, Tyler failed to report income he received from 5LINX, and took deductions to which he was not entitled, that is, commissions that were not paid. The false returns resulted in a tax loss of approximately $449,123.
The Judge ordered the forfeiture of the defendant’s interest in real property at 4385 County Road 16 in Canandaigua, NY.
Craig Jerabeck and Jason Guck were previously convicted. Jerabeck was sentenced to 14 months in prison, Guck is awaiting sentencing.
Today’s sentencing is the culmination of an investigation by Special Agents of the Federal Bureau of Investigations, under the direction of Special Agent-in-Charge Gary Loeffert, and the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett, Special Agent in Charge, New York Field Office.# # # #
Five Foreign Nationals Indicted on Murder-For-Hire, Money Laundering, and Immigration ChargesRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Raleigh has returned a superseding indictment charging five foreign nationals with various federal crimes stemming from a bribery and kickback scheme, including money laundering, immigration fraud, and a subsequent murder for hire plot.
Leonid Teyf, 57, currently living in Raleigh, North Carolina, is charged with bribing a public official, planning a murder-for-hire, and possessing a firearm with an obliterated serial number, and unlawful use of a visa procured through false claims.
Teyf is also charged with multiple counts of money laundering in conspiracy with his wife, Tatyana Teyf, 41, a Russian citizen, and Alexsy Timofeev, 37, also a Russian citizen currently residing in Darien, Illinois. Teyf, Tatyana Teyf, and Timofeev are additionally charged with Timofeev’s wife, Olesya Yuryevna Timofeeva, 41, for conspiring, and aiding and abetting one another to encourage and induce an alien to come to, enter, or reside in the United States, knowing and in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law. Alexei Polyakov, 40, currently residing in Raleigh, North Carolina, is also charged in the indictment with attempting to obtain naturalization through false statements.
The superseding indictment alleges that between 2010 and 2012, Leonid Teyf was the Deputy Director of Voentorg, a company which contracted with Russia’s Ministry of Defense to provide the Russian military with goods and services. Leonid Teyf arranged for subcontractors in Russia to fill the various services required by Voentorg’s contract. Leonid Teyf and others devised a scheme requiring the subcontractor to agree that a certain percentage of the government funds it would receive for completion of the work would be paid back to Leonid Teyf and others involved in the scheme. These kickbacks of government funds were paid in cash and amounted to more than $150 million over an approximate two-year span. Some of the money was paid to others involved in the scheme, and some of the money was placed in accounts under Leonid Teyf’s control – accounts within Russia, and, ultimately accounts located in the United States.
The superseding indictment additionally alleges that since at least December 2010, Leonid and Tatyana Teyf and others have opened at least 70 financial accounts at four financial institutions in their own names and in the names of businesses under their control. Leonid Teyf and others received at least 294 wires totaling approximately $39.5 million into four accounts held in Leonid Teyf’s name and the names of the co-conspirators at an American banking institution. Foreign corporations and bank accounts in countries commonly known to be used for money laundering are the source of 293 of the wires. Timofeev assisted Leonid Teyf in the formation of companies in the United States, including the creation of CTK Transportation Incorporated in Illinois, a business used in the money laundering scheme. Timofeev was involved in multiple financial transactions involving the kickbacks from Russia.
The superseding indictment also alleges that in July of 2018, Teyf knowingly used and possessed a U.S. immigrant visa at the Raleigh-Durham International Airport, which he had procured through false claims made in his I-140 application. To obtain that visa Teyf falsely claimed that he was entering the U.S. for the purpose of being an executive employee of a multinational company, and for whom he would earn an annual salary of $110,000.
Similarly, in 2016, an associate of Teyf, Alexei Polyakov, also made false statements in an effort to obtain immigration benefits. Polyakov falsely completed the Form N-400, application for naturalization, by failing to assert under penalty of perjury 1) that he had previously use the name “Alex Norka,” 2) that he had been arrested on at least 12 occasions in addition to the five reported occasions, and 3) by falsely underreporting the time he had spent in jail prior to the application.
As alleged in publicly available documents filed in federal court by the Government, during the course of the investigation into the money laundering charges, a Confidential Source utilized by the Federal Bureau of Investigation learned that Leonid Teyf came to believe that his wife, Tatyana Teyf, was having an affair with another man. Leonid Teyf recruited the Confidential Source to assist in planning for the man’s murder. The murder was to take place here in the United States or in Russia after they conspired to have the man deported. Leonid Teyf paid an employee with the United States Department of Homeland Security, who was working undercover, $10,000 to have the man deported from the United States. When the deportation plan was taking a longer period of time than he expected, Leonid Teyf returned to his murder-for-hire plan and paid the Confidential Source $25,000 to kill the man before the end of 2018. Leonid Teyf also supplied the Confidential Source with a firearm to commit the murder with the serial number removed from the weapon.
If convicted, Leonid Teyf would face maximum penalties of 20 years in prison. Tatyana Teyf, Alexsy Timofeev, Olesya Timofeeva, and Alexei Polyakov would face maximum penalties of 10 years in prison. The government will also seek to seize over $39 million in assets from the defendants. Each defendant will likely face the prospect of removal from the United States after their terms of imprisonment.
The charges and allegations contained in the superseding indictment, and related documents filed by the Government, are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law. The case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, Immigration and Custom Enforcement and the Raleigh Police Department. The case is being prosecuted by Assistant United States Attorneys Jason Kellhofer and Barbara Kocher.
Finance of America Mortgage to Pay $14.5 Million to Resolve False Claims Act Liability Involving FHA Mortgage LendingRead the Press Release
ALBANY, NEW YORK – Finance of America Mortgage LLC has agreed to pay the United States $14,500,000 to resolve allegations that Gateway Funding Diversified Mortgage Services, L.P. (Gateway), which it acquired in 2015, violated the False Claims Act by knowingly originating and underwriting deficient mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), announced United States Attorney Grant C. Jaquith.
“Gateway misrepresented that its federally-insured loans met HUD’s quality standards, harming borrowers who were left underwater on their homes and taxpayers who backed the mortgages,” said United States Attorney Jaquith. “We are committed to holding mortgage lenders accountable when they abuse government programs for their own gain.”
During the time period covered by the settlement, Gateway participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that Gateway failed to comply with certain FHA origination, underwriting and quality control requirements. As part of the settlement, Gateway admitted that the company failed to audit all early-payment default loans (EPD) as required by HUD and, on those occasions when it did audit these loans, it “ignored calls from its compliance department regarding the company’s poor EPD rate for FHA loans.” Gateway also admitted that, in late 2011, some of its senior executives learned that the company’s one-year compare ratio (a figure HUD uses to compare lenders, with a higher ratio indicating that a lender has an unusually high default percentage compared to its peers) was increasing due, in part, to Gateway’s origination activities out of its Horsham, Pennsylvania headquarters and certain branch offices. Many of those same executives were then told in early 2014 that the same underwriters and offices identified in 2011 continued to “show a pattern of poor performance” on EPD loans. Gateway also admitted that it failed to adhere to HUD’s self-reporting requirements for loans containing material deficiencies. Notably, Gateway acknowledged that its conduct and omissions resulted in HUD insuring many loans approved by Gateway that were not eligible for FHA mortgage insurance under the DEL program.
“This investigation, along with others similar to it, represents our steadfast commitment toward protecting the integrity of federal housing programs,” said Michael Powell, Special Agent in Charge, Joint Civil Fraud Division, HUD’s Office of Inspector General (HUD-OIG). “It further reaffirms our intent to pursue those who exploit HUD programs for corporate gain.”
This investigation was triggered by a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act, which allow private persons, known as “relators,” to file civil actions on behalf of the government and share in any recovery. The relator in this case, a former Gateway employee, will receive $2,392,500 of the settlement proceeds. The case is docketed with the U.S. District Court for the Northern District of New York under number 1:16-cv-750.
The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of New York, the Department of Justice’s Civil Division, HUD-OIG, and HUD. The United States was represented by Assistant U.S. Attorney Adam J. Katz and Department of Justice Trial Attorneys Christopher Reimer and Harin Song.
Equine Insurance Agent Pleads Guilty in $1.3 Million Fraud SchemeRead the Press Release
PROVIDENCE - A Middletown insurance agent and agency owner who specializes in providing equine insurance coverage today admitted to operating schemes which defrauded customers, insurance companies, and finance companies of approximately $1.3 million dollars.
Appearing before U.S. District Court Judge John J. McConnell, Jr., Randall N. Levesque, 57, of Middletown, owner of Equine Insurance Services, LLC and Randall Levesque Agency, pled guilty to an information charging him with wire fraud, announced United States Attorney Stephen G. Dambruch, Special Agent in Charge of the United States Secret Service Stephen Marks, and Superintendent of the Rhode Island State Police Ann C. Assumpico.
According to court documents, Levesque overbilled and double-billed customers when billing their credit cards for premiums due on policies, some of which the client did not request or did not agree to finance, at times forging the customers’ signature; collected premiums on insurance policies issued by at least two insurance companies but, upon receipt from customers, did not forward the payments to the insurance companies; and, at times, financed premiums and received funds on behalf of customers without the customers’ consent or knowledge, and submitted financing agreements to finance companies for fictitious customers, for whom there were no policies.
According to Court documents, Levesque collected but did not remit to insurance companies over $800,000 in premiums; fraudulently obtained over $500,000 in financed premiums from at least two finance companies; and charged customers’ credit cards at total of approximately $80,000 for premiums that he failed to provide to insurance companies.
Levesque is scheduled to be sentenced on March 12, 2019.
Wire fraud is punishable by statutory penalties of up to 20 years in federal prison, a fine of $250,000 or not more than twice the gross gain or twice the gross loss from the offense, and a term of supervised release of up to 3 years.
The case is being prosecuted by Assistant U.S. Attorney Sandra R. Hebert. The matter was investigated by the United States Secret Service and Rhode Island State Police.
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Eighth Massachusetts State Trooper ArrestedRead the Press Release
BOSTON – A Massachusetts State Police Trooper was arrested and charged today, and two previously charged retired State Troopers agreed to plead guilty in connection with the ongoing investigation of overtime abuse at the Massachusetts State Police (MSP).
Heath McAuliffe, 40, of Hopkinton, was arrested this morning and charged in a criminal complaint with embezzlement from an agency receiving federal funds. McAuliffe will appear in federal court in Boston later today.
As alleged in court documents, McAuliffe was an MSP Trooper assigned to Troop E, which is responsible for enforcing criminal and traffic regulations along the Massachusetts Turnpike, Interstate I-90. McAuliffe allegedly received overtime pay for hours that he either did not actually work at all, or shifts in which he departed one to four hours early.
The alleged conduct involves overtime pay for selective enforcement initiatives, including the Accident and Injury Reduction Effort program (AIRE). That initiative was intended to reduce accidents, crashes, and injuries on I-90 through an enhanced presence of MSP Troopers and targeting vehicles traveling at excessive speeds. McAuliffe was required to work the entire duration of the four hour shift and truthfully report the date, time and sector of deployment on the citations issued during the shift. As alleged, McAuliffe concealed his fraud by submitting citations that were issued prior to the overtime shift, altered the citations to create the appearance that citations were issued during the overtime shift, and/or submitted citations that were never issued to drivers.
Trooper McAuliffe earned $164,680 in 2016, including approximately $60,908 in overtime, and earned $180,215 in 2015, including approximately $83,496 in overtime. According to court documents, between Aug. 1, 2015, and Aug. 31, 2016, McAuliffe was paid $9,825 for AIRE overtime hours that he did not work.
In addition, retired Troopers David Wilson, 58, of Charlton, and Daren DeJong, 57, of Uxbridge, both agreed to plead guilty pursuant to plea agreements filed today. Wilson and DeJong were arrested and charged on June 27, 2018, and July 25, 2018, respectively, with embezzlement from an agency receiving federal funds. A date for the plea hearings has not yet been scheduled.
In 2016, Wilson, a lieutenant, earned approximately $259,475, which included approximately $102,062 in overtime pay. Wilson has agreed to plead guilty to having been paid $12,450 for overtime hours that he did not work. Pursuant to the plea agreement, the government will recommend a sentence of between six months and 12 months of incarceration.
In 2016, DeJong earned $200,416, which included approximately $68,394 in overtime pay. DeJong has agreed to plead guilty to having been paid $14,062.50 for overtime hours that he did not work. Pursuant to a plea agreement, the government will recommend a sentence of between six months and 12 months of incarceration.
In 2015 and 2016, MSP received annual benefits from the U.S. Department of Transportation in excess of $10,000, which were funded pursuant to numerous federal grants.
McAuliffe is the eighth MSP trooper charged in the ongoing investigation. Seven troopers have pleaded guilty or have agreed to do so. On July 2, 2018, former Trooper Gregory Raftery, 47, of Westwood pleaded guilty; on Sept. 14, 2018, suspended Trooper Kevin Sweeney, 40, of Braintree pleaded guilty; on Oct.11, 2018, suspended Trooper Gary Herman, 45, of Chester, pleaded guilty; on Nov. 28, 2019, former Trooper Paul Cesan pleaded guilty; and suspended Trooper Eric Chin, 46, of Hanover, is scheduled to plead guilty today.
The charge of theft of government funds provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Douglas Shoemaker, Special Agent in Charge of the U.S. Department of Transportation’s Office of Inspector General made the announcement today. Assistant U.S. Attorneys Dustin Chao and Mark Grady of Lelling’s Public Corruption Unit are prosecuting the case.
Eight Defendants Arrested in Major Narcotics ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y.- U.S. Attorney James P. Kennedy, Jr. announced today that eight defendants were arrested and charged by criminal complaint with conspiracy to distribute five kilograms or more of cocaine, and one kilogram or more of heroin. The charge carries a minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine.
Named in the complaint are:
• Edwin Deleon, 27; • Eugenio Torres, 44; • Clarita Mendez, 31; • Sergio Smith, 30; • Manuel Lewis, 29; • Bryan Deleon, 23; • Juan Ortega-Baez, 18; and
• Angel Fernando, 28, all of Rochester, NY.Defendants Edwin Deleon, Eugenio Torres, Clarita Mendez, are also charged with possession with intent to distribute cocaine, which carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that according to the complaint, the defendants were responsible for trafficking heroin and cocaine in and around the City of Rochester. The arrests are the result of a lengthy investigation that involved various sensitive investigative techniques.
During the execution of search warrants this morning, investigators recovered multiple firearms, quantities of suspected fentanyl, heroin, and cocaine, as well as more than $20,000 in cash.
The defendants made initial appearances today before U.S. Magistrate Judge Marian W. Payson and are being detained.
The criminal complaint is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division; the Rochester Police Department, under the direction of Chief Mark Simmons; U.S. Border Patrol, the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert; and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Dominican National Sentenced for Illegally Possessing Firearm and AmmunitionRead the Press Release
BOSTON - A Dominican national was sentenced yesterday in federal court in Boston for illegally possessing a firearm and ammunition.
Carmito Martinez, 26, a Dominican national formerly residing in Roslindale, was sentenced by U.S. District Judge George A. O’Toole to 16 months in prison and two years of supervised release. Martinez will face deportation proceedings upon completion of his sentence. In October 2018, Martinez pleaded guilty to possession of a firearm and ammunition by an alien unlawfully present in the United States.
On Aug. 31, 2017, deportation officers went to Martinez’s last known address in Roslindale to take Martinez into custody for deportation purposes. When Martinez exited the house, law enforcement ordered him to stop and show his hands. Martinez removed a dark colored object from his waistband, threw the object behind a fence, and took off running. After Martinez was apprehended, the object he had thrown was located and determined to be a Smith and Wesson Model 422 .22 caliber long riffle. The weapon had one round in the chamber and seven rounds in the magazine, and the safety was not engaged. Further investigation revealed that the recovered weapon had been stolen. It is a violation of federal law for an alien in the country without legal authority to possess a firearm or ammunition.
United States Attorney Andrew E. Lelling and Peter C. Fitzhugh made the announcement. Valuable assistance was provided by the Boston Police Department. Assistant U.S. Attorney David G. Tobin of Lelling’s Major Crimes Unit prosecuted the case.
Dominican National Sentenced as Illegal Alien in Possession of a FirearmRead the Press Release
St. Thomas, USVI – Lester Charles, 36, a national of Dominica, was sentenced today after having pleaded guilty to being an illegal alien in possession of a firearm, United States Attorney Gretchen C.F. Shappert announced.
District Court Judge Curtis V. Gomez sentenced Charles to 24 months imprisonment and three (3) years of supervised release.
According to court documents, a Virgin Islands Police Department officer went to an area in Lindberg Bay where Charles and another individual became involved in a heated dispute over a parking space. Charles left the scene and returned 15 minutes later with a firearm. He proceeded to chase and point the firearm at the victim. The firearm, a Beretta Pierto Model CAT-5802, was recovered by law enforcement at the scene, along with 10 rounds of ammunition, including one round in the chamber of the firearm. The defendant admitted to law enforcement officers that he had possessed the gun.
This case was investigated by Homeland Security Investigations (HSI) and the Virgin Islands Police Department. It was prosecuted by Assistant United States Attorney Everard E. Potter.
Doctor Pleads Guilty to Obstructing the IRSRead the Press Release
WASHINGTON - A medical doctor pleaded guilty to corruptly obstructing the due administration of the internal revenue laws yesterday, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney for the Middle District of North Carolina Matthew G.T. Martin.
According to court documents, Dr. Joseph Jacob Hummel purchased the home of an acquaintance, only to be repaid for the purchase a short time later. When Special Agents with Internal Revenue Service-Criminal Investigation (IRS) interviewed Dr. Hummel about this real estate transaction, he falsely stated that he rented the property to the original owner and then sent the agents a sham lease, supporting this statement.
Hummel faces a maximum sentence of three years in prison. He also faces a period of supervised release and monetary penalties. Sentencing is scheduled for March 26, 2019.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Martin thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Kevin Schneider of the Tax Division and Assistant United States Attorney Frank Chut, who are prosecuting the case.
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Doctor Pleads Guilty to Obstructing the IRSRead the Press Release
A medical doctor pleaded guilty to corruptly obstructing the due administration of the internal revenue laws yesterday, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney for the Middle District of North Carolina Matthew G.T. Martin.
According to court documents, Dr. Joseph Jacob Hummel purchased the home of an acquaintance, only to be repaid for the purchase a short time later. When Special Agents with Internal Revenue Service-Criminal Investigation (IRS) interviewed Dr. Hummel about this real estate transaction, he falsely stated that he rented the property to the original owner and then sent the agents a sham lease, supporting this statement.
Hummel faces a maximum sentence of three years in prison. He also faces a period of supervised release and monetary penalties. Sentencing is scheduled for March 26, 2019.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Martin thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Kevin Schneider of the Tax Division and Assistant United States Attorney Frank Chut, who are prosecuting the case.
Detroit man sentenced for oxycodone distributionRead the Press Release
CLARKSBURG, WEST VIRGINIA – Robert Brown, of Detroit, Michigan, was sentenced to time served for selling oxycodone, U.S. Attorney Bill Powell announced.
Brown, also known as “Pooh,” age 24, pled guilty to one count of “Aiding and Abetting Distribution of Oxycodone.” Brown admitted to selling oxycodone in October 2015 in Monongalia County.
Brown faces up to 20 years incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Mon Valley Drug and Violent Crime Drug Task Force, a HIDTA-funded initiative, led the investigation. The Task Force consists of the U.S. Drug Enforcement Administration. the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, Monongalia County Sheriff’s Office, Morgantown Police Department, the Star City Police Department, the West Virginia State Police, the West Virginia University Police Department, the Granville Police Department, and the Monongalia County Prosecuting Attorney’s Office. The US Marshals Service, the Internal Revenue Service, the Monongalia County Processing and Transport Personnel, the Greater Harrison County Drug Task Force MHIT Group, the Mountain State Drug Task Force, the Three Rivers Drug Task Force-Fairmont, and the Fairmont Police Department assisted.
Senior U.S. District Judge Irene M. Keeley presided.
Deputy Attorney General Rod Rosenstein Visits Huntsville, ALRead the Press Release
Huntsville- Today Deputy Attorney General Rod Rosenstein visited Huntsville, AL to tour facilities at Redstone Arsenal, to include FBI’s Terrorist Explosive Device Analytical Center (TEDAC), ATF’s National Center for Explosives, Training and Research (NCETR) and NASA, announced U.S. Attorney Jay E. Town.
“It was an honor to receive Deputy Attorney General Rod Rosenstein today and tour the many impressive facilities aboard the Redstone Arsenal campus”, Town said. “It comes as no surprise that the DAG was impressed by the growth and capabilities here. We began the day touring NASA, a remarkable ambassador to the 40,000+ employees that serve aboard the Redstone Arsenal each day. Touring NASA is always impressive. The FBI’s Terrorist Explosive Device Analytical Center and ATF’s National Center for Explosives Training and Research and National Integrated Ballistic Information Network (NIBIN) facilities truly reminds us of the impressive advancement that law enforcement has made in order to stay ahead of criminal threats to the public. We were fortunate to be joined by ATF Director Tom Brandon as well. Our federal law enforcement capacities are tremendous but are only successful due to the hard work, dedication, and bravery of the men and women of all of our federal law enforcement agencies.”
Deputy Attorney General Rod Rosenstein with U.S. Attorney Jay E. Town at NASA Marshall Flight Center
DAG Rosenstein and USA Town with FBI TDAC Officials DAG Rosenstein (centered) and USA Town with FBI and ATF officials who toured the facilities on Tuesday.December Grand JuryRead the Press Release
United States Attorney Joe Kelly announced the federal Grand Jury for the District of Nebraska has returned 13 indictments charging 13 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Emilio Bello-Ozuna, age 35, of Omaha, is charged with illegal reentry after deportation from on or about November 28, 2018. The maximum possible penalty if convicted is 2 years’ imprisonment, a $250,000 fine, a 1-year term of supervised release, and a $100 special assessment.
* Maurice T. Bowens, age 32, of Lincoln, Nebraska, is charged in a three-count Indictment. Count I charges the defendant with false statements during acquisition of a firearm on or about March 1, 2018. The maximum possible penalty if convicted is 5 years’ imprisonment, $250,000 fine, a 3-year term of supervised release, and $100 special assessment. Count II charges the defendant with false statements during acquisition of a firearm on or about April 26, 2018. The maximum possible penalty if convicted is 5 years’ imprisonment, $250,000 fine, a 3-year term of supervised release, and $100 special assessment. Count III charges the defendant with illegal receipt of a firearm by person under Indictment on or about April 26, 2018. The maximum possible penalty if convicted is 5 years’ imprisonment, $250,000 fine, a 3-year term of supervised release, and $100 special assessment.
* Manuel Cabrera, age 42, of Omaha, is charged with escape from custody on or about November 29, 2018. The maximum possible penalty if convicted is 5 years’ imprisonment, $250,000 fine, a 3-year term of supervised release, and $100 special assessment.
* David Campbell, age 33, of Council Bluffs, Iowa, is charged in a three-count Indictment. Count I charges the defendant with conspiracy to distribute 500 grams or more of methamphetamine beginning on or about July, 2018 and continuing to on or about September 4, 2018. The maximum possible penalty if convicted is Life imprisonment, $10,000,000 fine, not less than 5-year term of supervised release, and a $100 special assessment. Count II of the Indictment charges the defendant with possession of a firearm in furtherance a drug trafficking offense on or about September 4, 2018. The maximum possible penalty if convicted is Life consecutive imprisonment, $250,000 fine, a 5-year term of supervised release, and $100 special assessment. Count III of the Indictment charges the defendant with being a felon in possession of a firearm on or about September 4, 2018. The maximum possible penalty if convicted is 10 years’ imprisonment, $250,000 fine, a 3-year term of supervised release, and $100 special assessment.
* Benito Ceballos-Espinoza, age 34, of Bellevue, Nebraska, is charged with illegal reentry after deportation from on or about November 15, 2018. The maximum possible penalty if convicted is 2 years’ imprisonment, a $250,000 fine, a 1-year term of supervised release, and a $100 special assessment.
* Joseph Lloyd James, age 47, is charged with arson in Indian Country from on or about November 5, 2018. The maximum possible penalty if convicted is 25 years’ imprisonment, a $250,000 fine, a 5-year term of supervised release, and a $100 special assessment.
* Jorden Johnson, age 23, is charged in a two-count Indictment. Count I charges the defendant with robbery of personal property of the United States on or about November 14, 2018. The maximum possible penalty if convicted is 15 years’ imprisonment, a $250,000 fine, a 3-year term of supervised release, and a $100 special assessment. Count II charges the defendant with brandishing a firearm in furtherance of a crime of violence on or about November 14, 2018. The possible penalty if convicted is 7 years’ to Life imprisonment consecutive, a $250,000 fine, a 5-year term of supervised release, and a $100 special assessment.
* Javonn T. Lewis, age 23, of Indianapolis, Indiana, is charged in a two-count Indictment. Count I charges the defendant with Interference with Commerce by Robbery by force from an employee at Walgreens on or about March 11, 2018. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a 3-year term of supervised release, and a $100 special assessment. Count II charges the defendant with Robbery involving Controlled Substances by force from an employee at Walgreens on or about March 11, 2018. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a 3-year term of supervised release, and a $100 special assessment.
* Said Antonio Mejia-Cerrato, age 37, of Crete, Nebraska, is charged with illegal reentry after deportation from on or about December 7, 2018. The maximum possible penalty if convicted is 2 years’ imprisonment, a $250,000 fine, a 1-year term of supervised release, and a $100 special assessment.
* Maria De Jesus Franco Munoz, age 47, of LaVista, Nebraska, is charged in a two-count Indictment. Count I charges the defendant with false representation of a social security number on or about January 13, 2014. The maximum possible penalty if convicted is 5 years’ imprisonment, a $250,000 fine, a 3-year term of supervised release, and a $100 special assessment. Count II charges the defendant with illegal reentry after deportation from on or about December 6, 2018. The maximum possible penalty if convicted is 2 years’ imprisonment, a $250,000 fine, a 1-year term of supervised release, and a $100 special assessment.
* Jose Sevilla, age 33, is charged with possession with intent to distribute 50 grams or more of methamphetamine on or about November 13, 2018. The maximum possible penalty if convicted is 40 years’ imprisonment, $5,000,000 fine, 4-year term of supervised release, and a $100 special assessment.
* Mauro Valente-Hernandez, age 27, is charged with illegal reentry after deportation from on or about November 28, 2018. The maximum possible penalty if convicted is 2 years’ imprisonment, a $250,000 fine, a 1-year term of supervised release, and a $100 special assessment.
* Michael I. White, age 19, of Muncie, Indiana, is charged in a two-count Indictment. Count I charges the defendant with Interference with Commerce by Robbery by force from an employee at Walgreens on or about February 10, 2018. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a 3-year term of supervised release, and a $100 special assessment. Count II charges the defendant with Robbery involving Controlled Substances by force from an employee at Walgreens on or about February 10, 2018. The maximum possible penalty if convicted is 20 years’ imprisonment, a $250,000 fine, a 3-year term of supervised release, and a $100 special assessment.
Central Valley Drug Trafficker Sentenced to 26 Years in PrisonRead the Press Release
SAN FRANCISCO – Manuel Gonzalez Chavez, aka Manuel Gonzalez Cobain, was sentenced today to 26 years in prison for his involvement in a heroin, cocaine, and methamphetamine trafficking conspiracy, announced United States Attorney Alex G. Tse and Drug Enforcement Administration Special Agent in Charge Chris Nielsen. The sentence was handed down by the Honorable James Donato, U.S. District Judge.
Gonzalez Chavez, 40, a citizen of Mexico, formerly of Stockton, Calif., pleaded guilty to the charges on November 9, 2017. As part of his plea agreement, Gonzalez Chavez acknowledged that he participated in a conspiracy to traffic heroin, cocaine, and methamphetamine. Gonzalez Chavez admitted that he bought and sold heroin, cocaine, and methamphetamine and that he distributed these controlled substances to his customers. Gonzalez Chavez also admitted that he directed at least one other person to act as his courier and to pick up or drop off controlled substances or the proceeds of drug sales on his behalf.
In sentencing Gonzalez Chavez, U.S. District Judge James Donato characterized the drug conspiracy in this case as a “massive and very destructive conspiracy” that trafficked drugs “in mercenary fashion” and “effectively poisoned” the community. Judge Donato declared that he was “particularly troubled” by the fact that Gonzalez Chavez had previously been convicted of possessing a firearm in furtherance of a drug trafficking offense and acted in this case “as if that [prior] conviction meant nothing.” Judge Donato also declared that the “intersection of drugs and firearms [is] particularly pernicious.”
Gonzalez Chavez was arrested on October 13, 2015. As part of his plea agreement, he admitted that on the day before his arrest, October 12, 2015, law enforcement authorities executed a search warrant at his residence in Stockton, Calif. At the time authorities entered Gonzalez Chavez’s home, he was actively packaging cocaine for distribution. Authorities’ search of Gonzalez Chavez’s residence resulted in the total seizure of approximately 5.2 kilograms of heroin, approximately 1.6 kilograms of methamphetamine, and approximately 4.2 kilograms of cocaine.
Law enforcement found heroin, methamphetamine, and cocaine throughout Gonzalez Chavez’s house. For example, the heroin, some of the methamphetamine, and some of the cocaine was found under the bathroom sink. In Gonzalez Chavez’s living room, authorities found additional cocaine and, in the living room closet, a .40 caliber Taurus PT100 pistol loaded with ammunition. In the kitchen, authorities found three digital scales, packaging materials, additional methamphetamine, more than one kilogram of cocaine, and bullets. In the backyard, authorities found approximately 1.8 kilograms of cocaine. In one of the bedrooms, authorities found a .38 caliber revolver and an Air Soft pistol. Authorities also seized approximately $43,500 in cash. Gonzalez Chavez admitted as part of his plea agreement that he knew the $43,500 represented the proceeds from drug sales.
On November 19, 2015, a federal grand jury indicted Gonzalez Chavez and twelve co-defendants for various crimes related to the scheme. The grand jury charged Gonzalez Chavez with conspiracy to distribute and possess with intent to distribute controlled substances, in violation of 21 U.S.C. §§ 846 and 841(a)(1), and with possession of a firearm in furtherance of drug trafficking, in violation of 18 U.S.C. § 924(c). Pursuant to his plea agreement, Gonzalez Chavez pleaded guilty to both charges. In addition to the 26-year prison term, Judge Donato sentenced Gonzalez Chavez to a 3-year term of supervised release. The defendant has been in custody since his arrest on October 13, 2015.
Gonzalez Chavez’s sentence brings to 12 the number of defendants sentenced as part of the conspiracy to distribute and possess with intent to distribute controlled substances in this case. All of Gonzalez Chavez’s co-defendants have pleaded guilty. During the course of this investigation, law enforcement seized more than 40 pounds of methamphetamine, more than 65 pounds of cocaine, more than 11 pounds of heroin, more than $1,200,000 in cash drug proceeds, and approximately twelve firearms.
Defendant
Age/
Residence
Charges
Status
Jesus Guadalupe Rojas
32/
Turlock
Distribution of methamphetamine, 21 U.S.C. §§ 841(a)(1)
Sentenced on June 14, 2017, to 24 months in prison and 3 years supervised release.
Jose Armando Mendoza Linares
42/
Turlock
Conspiracy to distribute and possess with intent to distribute methamphetamine, 21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on October 25, 2017, to 60 months in prison and 5 years supervised release.
Gabriel Estrada
41/
Compton
Conspiracy to distribute and possess with intent to distribute cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on December 13, 2017, to 70 months in prison and 3 years supervised release
Vanessa Valdez
31/
Chula Vista
Conspiracy to distribute and possess with intent to distribute methamphetamine and cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on December 13, 2017, to 22 months in prison and 3 years supervised release.
Elias Dominguez
46/
Patterson
Conspiracy to distribute and possess with intent to distribute methamphetamine, 21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on January 24, 2018, to 55 months in prison and 5 years supervised release.
Carlos Martinez
26/
Hayward
Conspiracy to distribute and possess with intent to distribute cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on February 21, 2018, to 30 months in prison and 3 years supervised release.
Ismael Mendoza Rodriguez
37/
Turlock
Conspiracy to distribute and possess with intent to distribute methamphetamine and cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Possession of a firearm in furtherance of drug trafficking, 18 U.S.C. § 924(c)
Sentenced on February 21, 2018, to 200 months in prison and 5 years supervised release.
Michael Sherman
48/
Lathrop
Conspiracy to distribute and possess with intent to distribute cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on February 28, 2018, to 32 months in prison and 3 years supervised release.
Ruben Franco Lopez
48/
Turlock
Conspiracy to distribute and possess with intent to distribute cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on March 7, 2018, to 37 months in prison and 3 years supervised release.
Manuel Lara Andrade
64/
Delhi
Conspiracy to distribute and possess with intent to distribute methamphetamine and cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on March 14, 2018, to 140 months in prison and 5 years supervised release.
Daniel Jimenez
48/
Ballico
Conspiracy to distribute and possess with intent to distribute methamphetamine and cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on November 7, 2018, to 128 months in prison and 5 years supervised release.
Manuel Gonzalez Chavez
42/
Stockton
Conspiracy to distribute and possess with intent to distribute methamphetamine, heroin, and cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Possession of a firearm in furtherance of drug trafficking, 18 U.S.C. § 924(c)
Sentenced on December 12, 2018, to 312 months in prison and 3 years of supervised release.
Carlos Olivares Hernandez
52/
Turlock
Conspiracy to distribute and possess with intent to distribute methamphetamine and cocaine, 21 U.S.C. §§ 846 & 841(a)(1)
Scheduled to be sentenced on January 9, 2019.
Assistant U.S. Attorneys Christiaan Highsmith, Sheila Armbrust, Katie Burroughs Medearis, and Gregg Lowder are prosecuting the case. The prosecution is the result of an investigation by the DEA, the Concord Police Department, and the IRS Criminal Investigations. The investigation was conducted and funded by the Organized Crime Drug Enforcement Task Force, a multi-agency task force that coordinates long-term narcotics trafficking investigations.
CEO of Suburban Pharmaceutical Company Sentenced to 4 Years in Federal Prison for Misappropriating $2.2 Million from InvestorsRead the Press Release
CHICAGO — A federal judge today sentenced the former Chief Executive Officer of a suburban pharmaceutical company to four years in prison for pocketing $2.2 million from investors and spending the money on property in Michigan, golf and yacht club dues, and trading in options on futures contracts.
As the CEO of Neurendo Pharma LLC in Hoffman Estates, ROBERT TOMLINSON misappropriated the money from individual and corporate investors from 2014 to 2017. Tomlinson fraudulently advised investors that their funds would be used to operate Neurendo and to market an experimental drug, known as GNTI, to treat type II diabetes. Tomlinson claimed investors would receive a substantial payment once Neurendo’s drug rights were purchased by a major pharmaceutical company. In reality, Tomlinson used the majority of investor funds to support his family’s lavish lifestyle, which included maintaining a personal property in Bay Harbor, Mich., and annual dues at the Bay Harbor Golf Club and Bay Harbor Yacht Club.
Tomlinson, 69, of Hoffman Estates, pleaded guilty earlier this year to one count of wire fraud. U.S. District Judge Rebecca R. Pallmeyer imposed the 48-month sentence in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
“Simply put, Tomlinson scammed for his own benefit without any regard for his investors, who trusted him with their funds to invest and use those funds to capitalize and fund the company’s operations,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “This was not a one-time mistake in judgment, but rather a calculated course of conduct with much aforethought.”
Evidence in the case revealed that Tomlinson misappropriated at least $100,000 in investor money to fund his own futures trading account, and $33,000 to make donations to the Washington National Cathedral. In addition to the Michigan property, Tomlinson used investor funds to make mortgage payments on a property in the Georgetown neighborhood of Washington, D.C.
When pocketing the money, Tomlinson made dozens of cash withdrawals of slightly less than $10,000 each from Neurendo’s bank account. The structured withdrawals were made in an effort to avoid federal reporting rules, which require financial institutions to notify the U.S. Department of the Treasury about transactions of more than $10,000.
Burnham Man Sentenced to 15 Years for Using the Internet to Access Child PornographyRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that David L. Cook, 61, of Burnham, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr., to 15 years in prison and 10 years of supervised release for using the internet to access child pornography intending to view it. Cook pleaded guilty on October 10, 2017. Because he had a prior qualifying conviction, he faced a mandatory minimum sentence of 10 years.
Court records reveal that in August 2016, the Maine State Police Computer Crimes Unit (MCCU) received a report from Microsoft that a user had uploaded an image of child pornography. Federal and state officers obtained a physical address for that user, executed a warrant at that address, and seized the defendant’s computer. The MCCU’s forensic examination of the computer revealed over 30 images of child pornography and that the defendant searched the internet for child pornography on dozens of occasions between March and August, 2016.
The case was investigated by the MCCU and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. 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. 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.
Burlington Man Pleads Guilty to Ammunition ChargeRead the Press Release
BOSTON - A Burlington man pleaded guilty yesterday in federal court in Boston to illegally possessing 30 pieces of ammunition.
Brendan Sheils, 32, pleaded guilty to one count of being a felon in possession of ammunition. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for March 18, 2019.
On Feb. 22, 2018, police received information that Sheils was in possession of an Uzi bump stock weapon and that he desired to attack the Burlington Police Department. On Feb. 23, 2018, police executed a search warrant at Sheils’ residence, where they recovered a total of 30 pieces of ammunition, as well as an AR-15 type rifle that was determined to be a “ghost gun,” which is made when an individual buys component parts and then assembles the pieces together. The rifle was loaded with 28 of the pieces of ammunition.
The firearms charge provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based on the United States Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, Woburn Police Chief Robert J. Ferullo Jr.; and Burlington Police Chief Michael Kent made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Lelling’s Major Crimes Unit is prosecuting the case.
Bucks County Man Detained on Enticement and Attempted Manufacture of Child Pornography ChargesRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Michael Schamach, 32, of Warrington, PA, was detained today in federal custody on one charge of Enticement of a Minor to Engage in Sexual Activity and one charge of Attempted Manufacture of Child Pornography.
According to the criminal complaint filed against the defendant, Schamach asked an individual (who unbeknownst to him was an undercover FBI agent posing as a child’s mother) to provide her 11 year-old daughter to Schamach for sexual intercourse. Previously, the defendant had allegedly offered a finder’s fee that would depend on the age of the child: the younger the victim, the greater the finder’s fee. During a two-day period of text message negotiations between Schamach and the undercover agent, Schamach allegedly requested nude and sexually explicit photos of the child, and he agreed to pay to have sexual intercourse with the child. The complaint alleges that Schamach agreed to meet the child at a local hotel on Friday, December 7, 2018. At the agreed upon time and location, Schamach allegedly arrived, equipped with personal lubricant, payment for the “mother” of the child, and candy for the child. The defendant was immediately arrested by FBI agents. After appearing in U.S. Magistrate Court today, the Honorable Richard A. Lloret found that there was probable cause and detained the defendant until his trial, holding that the defendant was a danger to the community.
“This Office is committed to keeping our children safe from harm,” said U.S. Attorney McSwain. “And I want to thank the FBI, as well as the Bensalem and Warminster Police Departments, for their continued efforts to combat the attempted manufacture of child pornography and the enticement of minors.”
If convicted, the defendant faces a maximum possible sentence of life imprisonment, with a minimum mandatory 15 year term, a minimum five years up to lifetime supervised release, $500,000 in fines, a $200 special assessment, and, if found to be non-indigent, an additional mandatory $10,000 assessment must be imposed.
The case was investigated by the Federal Bureau of Investigation, the Bensalem and Warminster Police Departments, and is being prosecuted by Assistant United States Attorney Joseph A. LaBar.
An indictment, information or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Brooklyn Man Indicted for Sex Trafficking and Possessing a FirearmRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Joseph Harris with sex trafficking, brandishing firearms in furtherance of sex trafficking, promoting prostitution and being a felon in possession of a firearm. The defendant’s arraignment is scheduled for this afternoon before United States Magistrate Judge Steven L. Tiscione.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neil, Commissioner, New York City Police Department (NYPD), announced the charges.
“As alleged, Joseph Harris engaged in sex trafficking of adult and minor victims, forcing them to prostitute themselves to line his pockets,” stated United States Attorney Donoghue. “This Office will continue to work diligently with the FBI and our local law enforcement partners to prosecute those who force their victims into sexual slavery.” Mr. Donoghue expressed his grateful appreciation to the Kings County District Attorney’s Office for their assistance in the case.
“As alleged, Harris’s vile actions dehumanized his victims, stripping them of their innocence and forcing them into a life of brutality and neglect – and putting them at risk of further harm from sexual exploitation and narcotics addiction,” stated FBI Assistant Director-in-Charge Sweeney. “Today’s indictment demonstrates the FBI’s commitment to working with our law enforcement partners to ensure justice for our most vulnerable victims, and to pursue and apprehend those who abuse and exploit children for their own personal gain.”
“Today’s charges further affirm the NYPD’s unwavering commitment to protecting the survivors of sex trafficking and gun violence,” stated NYPD Commissioner O’Neill. “These crimes – especially those involving minors – are among the most heinous in our society. Our job is to ensure that anyone who would seek to profit through the abuse and exploitation of another human being be brought to justice swiftly and successfully. To that end, I thank and commend the U.S. Attorney’s Office for the Eastern District, the FBI and the Brooklyn District Attorney’s Office for contributing to this critical case. Together, we will continue to make the safest large city in the nation even safer.”
As alleged in the indictment and court documents, from July 2017 until his arrest in May 2018, Harris used violence and threats to force women and young girls into prostitution, promoting and managing his business over the Internet and on social media. On May 5, 2018, NYPD officers responded to 911 calls reporting that “girls” were being held against their will by a male later identified as the defendant at an apartment building on St. Marks Avenue in Brooklyn. At the apartment, officers found two adult women and a 16-year-old girl in a basement apartment. Subsequent investigation revealed that Harris had been sex-trafficking numerous victims, including the three females in the apartment basement and another minor female, age 14. Harris regularly carried a firearm and demanded that his victims give him all the money they made. Harris also engaged in sexual intercourse with his victims, including the minors, and provided them with narcotics. A handgun was recovered from the defendant’s residence shortly before his arrest.
If convicted, Harris faces a mandatory minimum term of 15 years’ imprisonment and a maximum of life on the sex trafficking charge, and a mandatory consecutive term of seven years’ imprisonment on the charge of brandishing a firearm during a crime of violence.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Civil Rights Unit, in collaboration with the Brooklyn Human Trafficking Task Force and Kings County District Attorney’s Office. Assistant United States Attorney Erin Reid and Assistant District Attorney Sherman Jones from the Kings County District Attorney’s Office are in charge of the prosecution.
The Defendant:
JOSEPH HARRIS (also known as “Luis Santana” and “Joey Moscato”)
Age: 37
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-616 (LDH)
Brazilian Couple Sentenced for International Kidnapping of GrandsonRead the Press Release
HOUSTON - An international businessman and his wife have learned their fate for international parental kidnapping, announced U.S. Attorney Ryan K. Patrick and Special Agent in Charge Perrye K. Turner of the FBI. A federal jury deliberated for more than two days following a 10-day trial before convicting Carlos Otavio Guimaraes, 68, and Jemima Guimaraes, 66.
Today, U.S. District Judge Alfred Bennett heard arguments from both the prosecution and defense teams. The government requested the court impose a term of imprisonment advised by the sentencing guidelines or slightly higher, while the defense asked for a non-custodial sentence. Ultimately, the court imposed a three-month sentence for Carlos Guimaraes, while Jemima was ordered to serve one month. Both will also be ordered to serve one year of supervised release following their terms of imprisonment during which time they will be required to remain in the United States. The court continued its order that both their U.S. and Brazilian passports remain surrendered and they cannot obtain new ones. The court also ordered the defendants may not have any contact with their fugitive co-defendant daughter, but placed no prohibition on communicating with their grandson.
Each was also ordered to pay a $75,000 fine. Restitution will be determined at a later date, but could be in excess of $400,000.
At the hearing, the judge also heard from the victim – the child’s father – who gave impassioned testimony about how this has impacted him and how much he misses his son. He stated that he has been “emotionally crippled by this experience. What my family and I have endured at the hands of these defendants has been so painful that I cannot imaging inflicting it on another human soul. How do you take away a parent’s right to have their child in their life?” He further noted that he has been consumed by grief. “My boy was just gone,” he said. “For years, I have begged and begged and begged them to bring my boy back, but they refused.”
The father also told the court the court that each trip to Brazil to see his son for even a short time cost him close to $20,000 and that, for years, he had been working an enormous amount of hours - averaging 100 a week - just to finance his fight to try to get his son back.
He also noted that what these defendants did was devoid of any concern for the child’s well-being, that the decision was motivated by greed, power, control and fear – fear not of him, but that he would get in the way of them taking the child for themselves. “They sought to enforce their own brand of vigilante justice,” he said, adding that the couple had undermined orders, lied to the court and succeeded in obtaining full custody of the child, noting they had stripped him of his parental rights, “making a mockery of the United States judicial system.”
At trial, the jury heard that the child’s grandparents helped illegally retain the child in Brazil away from his father in Houston. The mother and minor child traveled to Brazil to attend a family event in July 2013, but were supposed to return to Houston no later than July 20, 2013. The child was never returned to the United States.
The jury also heard how the child’s mother allegedly orchestrated a plan to travel to Brazil for her brother’s wedding via an agreed travel agreement as part of the pending divorce. While in Brazil, she went to a Brazilian state court and obtained custody of the minor. From that moment forward, the father of the child was limited in his ability to visit with his son. The visits he did have were supervised by a guard hired by the child’s mother. Currently, despite a Harris County divorce ruling in 2015 favorable to the father, his ability to maintain a relationship with his son has been incredibly difficult. The child no longer speaks English, and the father had to learn Portuguese to navigate the Brazilian legal system and communicate with his son.
The child’s father testified and told the jury that all he ever wanted was for his son to return to Houston so he could be a constant presence in his life.
Evidence was also presented which included the fact that the grandparents support their daughter by providing housing and employment as well as attorney fees. Additionally, when the father would visit Brazil, Jemima was present for most of the exchanges of the child. Video evidence showed both Carlos, Jemima, the hired guard and their Brazilian attorney at one of the exchanges.
The defense attempted to convince the jury that the Brazilian court rulings should be respected despite the fact they disregard the father’s position. The rulings found the United States was not the place to raise a child in the “egotistical profile of the American family.”
The defense provided an expert on the Hague Convention to testify, but that expert was unable to give even one example of a child that has been returned from Brazil when the abducting parent was alive and domiciled in Brazil. Further, the expert acknowledge the U.S. State Department has found Brazil to be non-compliant with the provisions of the Hague Convention on the Civil Aspects of International Child Abduction since 2005.
The defendants claimed the mother was fleeing from domestic violence, but the jury rejected that defense. The jury ultimately found Carlos and Jemima Guimaraes aided and abetted their daughter in the international parental kidnapping of their grandson.
They were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The child’s mother - Marcelle Guimaraes, 40 - is also charged but remains a fugitive in Brazil. She is presumed innocent unless and until convicted through due process of law.
The FBI conducted the investigation. Assistant U.S. Attorneys Sherri L. Zack and Kimberly Ann Leo are prosecuting the case.
If you are a parent or legal custodian who has been deprived of your child through abduction, please see the Department of Justice’s International Parental Kidnapping webpage for more information.
Boston Man Sentenced to 19 Years in Prison for Possession of Fentanyl, Cocaine, Firearm, and AmmunitionRead the Press Release
BOSTON – A Boston man was sentenced today for federal drug and firearm charges arising out of a large-scale seizure of fentanyl and other contraband.
Edgar Belis, 34, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 19 years in prison and five years of supervised release. In April 2018, Belis pleaded guilty to one count of possession with intent to distribute fentanyl and cocaine and one count of being a felon in possession of a firearm and ammunition.
In 2015, law enforcement agents identified Belis as a large-scale heroin trafficker in the Boston area. At the time, Belis had been convicted of heroin-related offenses on at least four prior occasions in Massachusetts state court.
In 2016, using a cooperating witness, law enforcement arranged calls with Belis seeking to purchase heroin. During those calls, Belis stated that he had kilogram quantities of heroin to sell, but suggested that the heroin must contain fentanyl or customers on the street would notice a difference. Belis stated that he would be willing to sell heroin or fentanyl for $40,000 per kilogram.
On May 3, 2016, a cooperating witness called Belis and placed an order for two kilograms of fentanyl. The purchase was set up for three days later. On May 6, 2016, Belis drove from Hopkinton to Boston, where law enforcement observed Belis picking up a backpack from a basement apartment. Belis then travelled to a location in South Boston to complete the sale of the two kilograms of fentanyl, where he was intercepted by law enforcement agents. Belis ignored several orders to exit the vehicle and locked himself in the car. Agents were forced to break the car windows to arrest Belis. A search of the backpack in the car resulted in the seizure of approximately 2.35 kilograms of fentanyl and approximately 250 grams of cocaine.
Later that day, agents executed a search warrant at the apartment associated with Belis, and seized an approximately 300 grams of fentanyl, approximately 125 grams of cocaine, $57,500 in cash, a Glock Model 22 .40 caliber pistol, and 31 rounds of .40 caliber ammunition.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; and Boston Police Commissioner William Gross made the announcement today.
Boston Man Charged with Federal Firearm OffenseRead the Press Release
BOSTON –A Boston man was arrested today and charged in federal court in Boston with being a felon in possession of a firearm and ammunition.
Mohamed Abdulaziz, 31, was charged with one count of being a felon in possession of a firearm and ammunition. Abdulaziz is currently in state custody.
According to the charging document, on Sept. 2, 2018, law enforcement officers stopped Abdulaziz on Route 24 South in West Bridgewater because he was driving erratically. After Abdulaziz failed several field sobriety tests, he was arrested for driving under the influence of alcohol. Troopers then conducted a routine inventory search of Abdulaziz’s vehicle before it was towed and found a loaded revolver beneath the driver’s seat. Federal law prohibits Abdulaziz from possessing a firearm or ammunition because of a prior felony conviction.
The charging statute provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police, made the announcement today. Assistant U.S. Attorney Christine Wichers of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Atlantic County, New Jersey, Man Admits Health Care Fraud ConspiracyRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted defrauding New Jersey state health benefits programs out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito announced.
Corey Sutor, 37, of Egg Harbor Township, New Jersey, a Ventnor firefighter, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.
Sutor was one of the owners of a company formed to market prescription compounded medications, referred to as Company 1. From May 2015 through February 2016, Sutor and others associated with the company persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications.
The conspirators learned that certain compound medication prescriptions – including pain, scar, and antifungal creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply. The conspirators also learned that the New Jersey State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents, would cover compound medication prescriptions.
Sutor and his conspirators entered into an agreement in which Company 1 would receive a percentage of the amounts paid to compounding pharmacies for prescriptions secured by Sutor and his conspirators. Sutor and his conspirators then recruited public employees, offered them hundreds of dollars per month, and persuaded them to agree to obtain prescription compounded medications without any examination by a medical professional. Sutor would obtain insurance and personal information from the public employees and give that information to conspirators. Company 1 then would receive a percentage of the amounts paid on these fraudulent prescriptions, which Sutor and others would divide.
Sutor and his conspirators caused New Jersey to pay more than $2 million in fraudulent claims for compounded medications for public employees.
Sutor received $150,398 in gross proceeds for his role in the scheme. As part of his plea agreement, Sutor must forfeit these criminal proceeds and pay restitution of at least $2,092,791.
Sutor faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 12, 2019.
U.S. Attorney Carpenito credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur in Newark; and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s guilty plea. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Gurbir S. Grewal and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys R. David Walk Jr. and Jacqueline M. Carle of the U.S. Attorney’s Office in Camden.
Defense counsel: Robert Wolf Esq., Westmont, New Jersey
Additional Charges Filed Against Schuylkill County Man Previously Charged with Threatening the PresidentRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury returned a second superseding indictment yesterday adding an additional charge of interstate transportation of a stolen vehicle against Shawn Christy, age 27, of McAdoo, who was previously indicted for threatening to harm President Trump and others.
According to United States Attorney David J. Freed, the second superseding indictment charges Christy with transporting a stolen vehicle from Pennsylvania to New York State on July 7-8, 2018.
The second superseding indictment also includes all of the charges contained in the initial superseding indictment: interstate transportation of a stolen vehicle, two counts of interstate transportation of a stolen firearm, two counts of interstate transportation of a firearm while under a felony information, one count of unlawful possession of a firearm as a convicted felon, one count of unlawful possession of a firearm as a fugitive, threats against the President of the United States, and three counts of transmitting threatening communications.
The threat to President Trump is being investigated by United States Secret Service agents, and the other charges are being investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and Butler Township Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for each of the Unlawful Possession of Firearms offenses and the Interstate transportation of stolen firearms offenses is 10 years’ imprisonment. The maximum penalty for the interstate transportation of stolen vehicle offense is 10 years’ imprisonment. The maximum penalty for the interstate transportation of firearms while under a felony information is five years’ imprisonment. The maximum penalty for each threat offense is five years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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13 Suspected Drug Traffickers with Cartel Ties Arrested in BustRead the Press Release
Thirteen individuals were arrested on federal drug conspiracy charges following a bust led by the FBI Wednesday morning, U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced today.
According to criminal complaints unsealed this afternoon, the defendants -- Juan Hernandez, Humberto Morales, Marcos Dominguez, Adolfo Ortiz, Albert Martinez, Alejandro Navarrete, Oscar Hernandez, Rebecca Mier, Leoncio Aguilar, Josue Coy, Fidel Alain Martin-Sosa, Yuniel Eduardo Lima Rivero, and Henry Alberto Echarte Rivero – conspired to distribute methamphetamine, cocaine, and heroin over a nearly five-year period, beginning in March 2014.
According to Organized Crime Drug Enforcement Task Force (OCDETF) investigators, the conspirators -- who had ties to the Los Zetas and the New Generation Jalisco Mexican cartels -- had a fluid hierarchy that evolved over time. Some of the money derived from the sale and distribution of the drugs were used to purchase additional drugs, while other drug money was sent to Mexico.
The investigation culminated yesterday, when FBI agents raided a home just across the street from a Grand Prairie elementary school, seizing 380 grams of heroin, a shotgun, and approximately 5 kilograms of methamphetamine. Additional agents seized seven firearms and ounce quantities of cocaine from two houses in Dallas. Agents in Carrollton, assisted by Carrollton Police Department seized 3 kilograms of methamphetamine that defendants Lima Rivero and Echarte Rivero attempted to discard.
In total, law enforcement also seized approximately $24,800 in U.S. currency.
A complaint is a written statement of the essential facts of the offense charged made under oath before a magistrate judge. The government has 30 days to present the matter to a grand jury for indictment. A defendant is entitled to the presumption of innocence until proven guilty through due process of law.
If convicted, defendants face up to 40 years in federal prison and a $5,000,000 fine.
The Federal Bureau of Investigation, in collaboration with the Bureau of Alcohol, Tobacco and Firearms, Texas Department of Public Safety, Dallas Police Department, Fort Worth Police Department, Carrolton Police Department, Grand Prairie Police Department, Arlington Police Department, Farmers Branch Police Department, and the Internal Revenue Service, conducted the investigation. Assistant U.S. Attorneys Shawn Smith and Laura Montes are prosecuting the case.
The case was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
11 December 2018
Woman Convicted at Trial of Distributing Heroin, Killing FriendRead the Press Release
PHILADELPHIA – First Assistant U.S. Attorney Jennifer Arbittier Williams announced that Emma Semler, 23, of Collegeville, PA was convicted today by a jury of one count of distribution, and aiding and abetting the distribution, of heroin resulting in death, and one count of distribution, and aiding and abetting the distribution, of heroin resulting in death within 1,000 feet of a playground. The sentencing hearing is scheduled on March 29, 2019 before the Honorable Gene E.K. Pratter. Following her conviction, the defendant was detained.
Semler and the victim first became friends when they met at a drug rehabilitation facility in November 2013. On May 9, 2014, the victim contacted Semler via Facebook Messenger about obtaining heroin. Semler told the victim that Semler knew a place where they could get heroin and said Semler would bring her younger sister along with them. Semler also agreed to provide the syringe for the victim to use to inject the heroin.
The three women then traveled to the Overbrook section of West Philadelphia to purchase drugs from someone known to Semler. Upon purchasing the heroin, the women went to a nearby Kentucky Fried Chicken (KFC) restaurant, located at 61st Street and Lancaster Avenue in Philadelphia. All three women went into the women’s restroom, where Semler distributed a packet of heroin along with a syringe to the victim. The victim injected the heroin and then asked for another packet because it was her birthday. Semler distributed the second packet, and the victim injected the second packet and then began to display symptoms of overdosing. When they realized that the victim was overdosing, Semler did not help the victim or call 911. Instead, Semler and her sister cleaned the bathroom of the evidence of their drug use and fled the KFC without contacting anyone regarding the victim’s condition. The victim was later found by a KFC employee, who immediately called 911. Despite efforts by first responders and later a hospital, the victim was pronounced dead. The KFC was located within 1,000 feet of a playground.
“The total disregard that Emma Semler had for her friend’s life is appalling,” said First Assistant U.S. Attorney Williams. “Instead of calling for help that could have saved a life, Semler covered her tracks and fled as her friend lay dying on the floor. We are grateful that the jury held Semler accountable for her unconscionable crimes.”
The case was investigated by the Drug Enforcement Administration, and the case is being prosecuted by Assistant United States Attorneys Randall P. Hsia and A. Nicole Phillips.
Wichita Man Sentenced for Driving 5+ Pounds of Meth to KansasRead the Press Release
KANSAS CITY, KAN. – A Wichita man was sentenced Monday to three years in federal prison for driving more than five pounds of methamphetamine to Kansas, U.S. Attorney Steve McAllister said.
Titus Gwess, 24, Wichita, Kan., pleaded guilty to one count of possession with intent to distribute methamphetamine. In his plea, Gwess admitted that he was coming home from Arizona when the Kansas Highway Patrol stopped him for speeding in Mullinville, Kan. Troopers found about 5.8 pounds of methamphetamine in the car.
Co-defendant Eric Reyes, 22, Wichita, Kan., is set for sentencing Jan. 28. Defendant Allen R. Killion is set for a change of plea hearing Dec. 17.
McAllister commended the Kansas Highway Patrol, the Drug Enforcement Administration and Assistant U.S. Attorney Mona Furst for their work on the case.
Warren County Doctor Sentenced to 40 Months Imprisonment for Illegallly Distributing Opioids and Medicare FraudRead the Press Release
St. Louis, MO – Dr. Philip Dean, 62, a resident of Warren County, Missouri, was sentenced today to 40 months of imprisonment and ordered to pay restitution to the Medicare and Medicaid programs in the amount of $312,377. Dr. Dean previously pled guilty to two felony charges, illegally distributing opiate medications and making a false statement to the Medicare program, on August 22, 2018. Dr. Dean was sentenced by Senior United States District Judge E. Richard Webber.
According to his plea agreement, Dr. Dean operated a medical office in Warren County, Missouri. Dr. Dean had personal relationships with three women, living with these women for some time periods. While engaging in personal relationships with these women, Dr. Dean also prescribed them with prescription opioid pain relief medications, including Oxycodone, Hydrocodone, and several formats of Fentanyl. The two felony charges from Dr. Dean’s plea agreement involve two of these women, referred to by their initials in the plea agreement as R.W. and C.H.
Regarding patient R.W., before his prescribing decisions at issue in this case, Dr. Dean was aware that R.W. had lost her health care provider license after experiencing serious prescription drug abuse problems. Dr. Dean was also aware that R.W. had been involved in motor vehicle accidents and traffic stops by police after driving while intoxicated because of prescription drugs. Nevertheless, during 2015-16, Dr. Dean prescribed R.W. with assorted opioid medications, including a fentanyl medication that was only approved for medical use by cancer patients with break-through pain. R.W. does not have cancer. R.W. repeatedly consumed her thirty day supplies of these prescription drugs before thirty days had elapsed. Recognizing that prescribing R.W. with duplicative and overlapping prescriptions for thirty day supplies of opiates would raise suspicion, Dr. Dean repeatedly prescribed R.W. with additional opiate prescriptions using the name of R.W.’s family member. Medicare funded these prescriptions, not knowing that R.W. was ending up with these medications. Dr. Dean personally picked up and paid a co-payment for one of these hydrocodone prescriptions that he wrote for R.W. using another patient’s name.
Regarding C.H., defendant issued her a prescription for Codeine, an opiate pain medication and controlled substance, on March 31, 2017 after exchanging text messages of a personal nature with her. Dr. Dean did not examine C.H. before issuing the prescription on March 31, 2017. According to medical records seized during the execution of a search warrant at the medical office, C.H. had not visited Dr. Dean’s office since January 24, 2017.
Dr. Dean admitted in his plea agreement that his opioid prescribing decisions exposed these patients to a risk of serious bodily injury, given the potency and side effects of the drugs he was prescribing and the patients’ histories of drug problems.
Steve Hanson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Kansas City Region, stated, “Regarding our agency’s ongoing efforts in combating our nation’s opioid crisis, our office will continue to aggressively pursue those who misuse their positions and recklessly prescribe medication to our beneficiaries.”
“Prescription opioids serve an important purpose when used legitimately for patients suffering from chronic pain and illness. In this particular case, we had a doctor with the power to write prescriptions misrepresenting the truth, supplying narcotics to people with serious addiction issues that he was aware of and bilking all of us who pay taxes while doing it. The Drug Enforcement Administration will continue to pursue these bad actors to bring them to justice. Addiction to opioids is a serious illness and we will not allow doctors to abuse their authority for personal gain,” said Special Agent in Charge William J. Callahan of the Drug Enforcement Administration.
This case was investigated by the Office of Inspector General for the U.S. Department of Health and Human Services and the Drug Enforcement Administration, with assistance from the Federal Bureau of Investigation, the Warrenton Police Department, and the Medicaid Fraud Control Unit of the Missouri Attorney General’s Office.
U.S. Department of Justice announces partnership with Anderson UniversityRead the Press Release
Indianapolis - Violent crime in Indianapolis (Marion County), Indiana has risen to astronomical levels. In the third quarter of 2018, there were 118 homicides and 331 non-fatal shootings in Marion County alone. The United States Attorney’s Office for the Southern District of Indiana (USAO) has faced this challenge head-on, pouring resources into addressing this crisis. Josh J. Minkler, the United States Attorney, collaborated with each of the six (6) Indianapolis Metropolitan Police Department (IMPD) districts and federal agencies including, but not limited to, the Bureau of Alcohol Tobacco Firearms & Explosives (ATF) to utilize intelligence-led policing and mandatory minimum sentences as both a shield and sword.
One effective method of confronting violent crime is prevention. The USAO is committed to ensuring the public is well-informed about the soaring crime rates and the Department’s intentional and collaborative response. In order to better disseminate this information, the USAO has partnered with Anderson University’s (AU) Department of Communication & Design Arts to expand the information ecosystem through internships and work-study programs.
“Reducing violent crime is a top priority for the Southern District of Indiana,” said Minkler. “Due to [Anderson] President John Pistole’s longstanding ties to government and the high regard in which he is held, a partnership with Anderson University made complete sense, and is beneficial to both parties. In bringing these interns into our office, we are enabling bright young minds to present us with new and exciting ways to reach our citizens, and in turn, educate our constituencies about ways to prevent violent crime.”
President Pistole served as Administrator for the United States Transportation Security Administration and Deputy Director of the Federal Bureau of Investigation before serving as the fifth President of Anderson University. He shared, “Anderson University offers several opportunities to equip students with real-world experience, and partners with a wide variety of employers, like the United States Attorney's Office for the Southern District of Indiana. We value the distinctive, compelling, and relevant skills that students learn from programs like this to prepare a successful career of faith and service."
In addition to receiving academic credit, the AU student interns are able to gain invaluable real-world experience, working side-by-side with public information officers in the USAO, assisting with:
- Communications with national and local news media, gathering news clips, assisting with interviews and press conferences, editing and issuing new releases on a variety of topics.
- Providing research assistance and contributing to other communications projects.
- Researching, drafting, editing and evaluating social media and web communications projects on a variety of topics and providing other duties as assigned.
The USAO remains committed to curbing the violent crime emergency plaguing Marion County. In addition to making use of its many federal resources, the USAO is excited to continue partnering with Anderson University and its students to produce a constituency that is both aware and informed of happenings in the Department in order to prevent future violent crime and protect the District’s citizens.
U.S. Attorney Milhiser Names New Leader for District's Criminal DivisionRead the Press Release
SPRINGFIELD, Ill. – U.S. Attorney John C. Milhiser today announced his selection of Gregory M. Gilmore to serve as Chief of the Criminal Division for the Central District of Illinois. In this capacity, Mr. Gilmore will be responsible for oversight of criminal matters in the 46-county Central District.
U.S. Attorney Milhiser stated, “Greg brings his 24 years as a federal prosecutor to this important position as we work with our state and local partners to reduce violent crime in our communities.”
A career prosecutor, Mr. Gilmore, 52, of Springfield, has previously served in supervisory positions since joining the U.S. Attorney’s office in 1994, most recently as Chief of the district’s Civil Division from 2013 to 2015.
A CPA since 1989, prior to joining the U.S. Attorney’s Office, Mr. Gilmore worked for the FBI as an investigative specialist and as an auditor for a Chicago accounting firm.
Mr. Gilmore received his law degree in 1993 from DePaul University College of Law, Chicago.
Two New Jersey Men Charged with Bank Fraud Conspiracy and Aggravated Identity TheftRead the Press Release
NEWARK, N.J. – Two North Jersey men were charged today for their respective roles in a conspiracy that used stolen credit cards removed from the mail by U.S. Postal Service (USPS) employees to defraud banks that issued the cards, U.S. Attorney Craig Carpenito announced.
Olagoke Araromi, 22, of Union, New Jersey, and Elhadj Fofana, of Orange, New Jersey, are charged by complaint with one count each of bank fraud conspiracy and aggravated identity theft. Araromi is additionally charged with one count of giving bribes to USPS employees. Araromi was arrested this morning and had his initial appearance this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court. Fofana remains at large.
According to documents filed in this case and statements made in court:
From July 2017 to May 2018, Araromi and others conspired to steal credit cards that banks mailed to accountholders by bribing USPS employees to remove envelopes containing credit cards from the mail. Araromi and others paid USPS employees cash for credit cards that the USPS employees had removed from the mail. Text messages between Araromi and USPS employees showed Araromi instructing USPS employees to look for and take credit cards issued by certain banks that he preferred, promising to pay the USPS employees for taking as many credit cards as possible, and arranging meetings to pick up the stolen credit cards.
From July 2017 to February 2018, Araromi, Fofana, and others then used the stolen credit cards to make unauthorized purchases of retail goods, such as Apple MacBook Pro devices and other Apple products, throughout New Jersey and New York, causing financial losses to the banks that issued the credit cards. Surveillance video recordings and photos from these various retail stores showed the defendants making these unauthorized transactions with the stolen credit cards.
One of Araromi’s and Fofana’s conspirators, Moussa Dagno, was previously charged by complaint and is currently detained.
The bank fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The aggravated identity theft charge carries a mandatory sentence of two years in prison, which must run consecutive to any other term imposed. The bribery charge is punishable by a maximum potential penalty of 15 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents with the USPS-Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, with the investigation leading to today’s complaint.
The government is represented by Assistant U.S. Attorneys Jihee G. Suh and Tazneen Shahabuddin of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two Brothers from Ohio Indicted for Overdose Death from FentanylRead the Press Release
Two brothers from Oregon, Ohio have been indicted on charges of distributing and conspiring to distribute fentanyl resulting in the overdose death of a victim, announced United States Attorney Matthew Schneider.
Joining Schneider in the announcement were Special Agent in Charge Timothy J. Plancon, Drug Enforcement Administration, Detroit Division, and Chief Charles F. McCormick IV, Monroe Police Department.
Charged were Harry Clifford Wise, 36, and James Allen Wise, 29. Both were arrested on December 6, 2018, and appeared this afternoon in federal court for their detention hearings.
On April 1, 2017, the Monroe Police Department responded to a house in the 300 block of E. 4th St. on a report of a deceased 33 year old male. An investigation revealed that the male victim had died of an opioid overdose. The Monroe Police Department conducted a thorough investigation which uncovered that two brothers from Oregon, Ohio had supplied the victim with the opioids that took his life. On December 4, 2018, the two brothers, Harry Wise III and James Wise, were indicted on charges of delivery of opioids causing death and conspiracy to distribute opioids.
"Overdose deaths from heroin and fentanyl have become a national epidemic, including here in Michigan," Schneider said. "Law enforcement agencies are working closely together to investigate and prosecute traffickers who are contributing to this epidemic."
DEA Special Agent in Charge Plancon said, “It is a priority of DEA to identify and investigate those who distribute drugs that result in overdose and death. The charges announced today should make it clear to all drug dealers that they will face consequences, for the harm that they inflict on the user and on society. The Monroe Police Department deserves significant credit for devoting the time and effort needed to successfully investigate and bring these individuals to prosecution.”
Monroe Police Chief Charles F. McCormick IV stated, “I would like to thank the DEA for their partnership in this investigation, and a special thank you to MPD’s D/Lt. Derek Lindsay for his relentless efforts to seek justice in this case”.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This investigation was led by the Monroe Police Department in partnership with the Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorney Andrew Lievense.
Tucker County woman sentenced for illegal firearms chargesRead the Press Release
ELKINS, WEST VIRGINIA – Jamie Huffman, of Parsons, West Virginia was sentenced today to five years probation for firearms charges, United States Attorney Bill Powell announced.
Huffman, age 36, pled guilty to two counts of “Theft of Firearm from Federal Firearm Licensee” in December 2017. Huffman admitted to stealing several firearms from B.F. Long & Co, a Federal Firearm Licensee, including a .38 caliber revolver, and a .40 caliber Glock pistol, and a 9mm pistol. The crimes occurred in July and August 2016 in Tucker County.
This case was brought as part of Project Safe Neighborhoods (PSN). Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Assistant U.S. Attorney Traci M. Cook prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge John Preston Bailey presided.
Troy Man Sentenced to 92 Months for Cocaine and Crack ConspiracyRead the Press Release
ALBANY, NEW YORK – Tyrone D. Marshall, age 37, of Troy, New York, was sentenced yesterday to 92 months in prison, to be followed by 6 years of supervised release, for conspiring to distribute cocaine and crack cocaine in Albany and Rensselaer Counties.
The announcement was made by United States Attorney Grant C. Jaquith and James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
In pleading guilty on August 15, 2018, Marshall admitted that from February 2017 to April 2017, he worked with others to acquire cocaine; cook and otherwise convert the cocaine into cocaine base (a/k/a crack cocaine); and sell crack cocaine and cocaine in Albany and Rensselaer Counties. Marshall admitted that a co-conspirator typically acquired cocaine from a source of supply in the City of Albany and then brought the cocaine to his residence in Troy, where they would cook the cocaine into crack for resale.
This case was investigated by the FBI and its Capital District Safe Streets Gang Task Force, which includes FBI Special Agents and members of federal, state and local law enforcement agencies, including the New York State Police and New York Department of Corrections and Community Supervision, and was prosecuted by Assistant U.S. Attorney Michael Barnett.
Troy Man Sentenced to 60 Months for Intending to Distribute Crack CocaineRead the Press Release
ALBANY, NEW YORK – Jaquan Walker, age 24, of Troy, New York, was sentenced yesterday to 60 months in prison for possessing and intending to distribute crack cocaine.
The announcement was made by United States Attorney Grant C. Jaquith and James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
Walker admitted that on September 2, 2017, while in Troy, he possessed approximately 47 grams of crack cocaine, which he intended to distribute.
This case was investigated by the FBI and the Troy Police Department, and was prosecuted by Assistant U.S. Attorney Alicia Giglio Suarez.
Troy Man Arrested for Attempted Enticement and Coercion of a MinorRead the Press Release
ALBANY, NEW YORK – Michael Varian, age 52, of Troy, New York, appeared today in federal court on a charge that he attempted to entice a minor into sexual activity.
The announcement was made by United States Attorney Grant C. Jaquith and James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
According to the criminal complaint, Varian, a school bus driver, attempted to entice and coerce an individual, whom he believed to be a 14-year-old boy, to engage in sex. After weeks of exchanging sexually explicit text messages with undercover law enforcement officers posing as the boy, Varian arranged to meet the boy at a location in Albany County, where Varian was arrested.
The charges in the complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty. If convicted, Varian faces at least 10 years and up to life in prison, a term of post-release supervision of at least 5 years and up to life, and a fine of up to $250,000. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors. Additionally, if convicted, Varian would be required to register as a sex offender.
Varian appeared today before United States Magistrate Judge Christian F. Hummel, who ordered him detained pending a detention hearing scheduled for December 12, 2018.
Anyone with information relevant to this investigation may contact the FBI’s Albany Field Office at (518) 431-4866.
This case is being investigated by the FBI and its Child Exploitation Task Force, which includes members of state and local law enforcement agencies, including the Town of Colonie Police Department, and is being prosecuted by Assistant U.S. Attorney Megan Kinsella Kistler.
Three West Virginia residents sentenced for their roles in a methamphetamine distribution operationRead the Press Release
ELKINS, WEST VIRGINIA – Three West Virginia residents were sentenced today to a nearly 25 years incarceration combined for distributing methamphetamine, United States Attorney Bill Powell announced.
Amanda Mae Bachman, also known as “AB,” age 34, of Buckhannon, West Virginia, was sentenced to 135 months incarceration. Bachman pled guilty to one count of “Conspiracy to Distribute Methamphetamine” in February 2018. Bachman to conspiring with others to distribute more than 50 grams of methamphetamine. The crime occurred in Upshur County and elsewhere from March 2016 to September 2017.
Brett Allen Reed, age 24, of Buckhannon, West Virginia, was sentenced today to 84 months incarceration. Reed pled guilty to one count of “Possession with Intent to Distribute Methamphetamine - Aiding and Abetting” in November 2017. He admitted to aiding another person in distributing methamphetamines in Upshur County in March 2017.
Cassie Chase Poland, age 19, of Fairmont, West Virginia, was sentenced today to 78 months incarceration. She pled guilty to one count of “Possession with Intent to Distribute Methamphetamine - Aiding and Abetting” in November 2017. Poland admitted to aiding another in distributing methamphetamine in Randolph County in April 2017.
Assistant U.S. Attorney Stephen D. Warner prosecuted the cases on behalf of the government. The Bureau of Alcohol, Firearms, Tobacco and Explosives, The Mountain Region Drug & Violent Crime Task Force, the Greater Harrison Drug &Violent Crime Task Force, a HIDTA-funded initiative, the West Virginia State Police, Upshur County Sheriff’s Office, Lewis County Sheriff’s Office, the Buckhannon Police Department, and the Weston Police Department investigated.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.U.S. District Judge John Preston Bailey presided.
Three Nevada Family Members Plead Guilty to Conspiring to Steal More Than $2 Million in Tax RefundsRead the Press Release
Three individuals in Las Vegas, Nevada, pleaded guilty this week to conspiring to steal more than $2 million in tax refunds from the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Dayle Elieson for the District of Nevada.
Chanh V. Trinh, Cannedy Trinh, and Elizabeth Trinh each pleaded guilty to one count of conspiring to defraud the United States by fraudulently obtaining the payment of income tax refunds. Chanh V. Trinh also pleaded guilty to one count of aggravated identity theft involving the use of his deceased brother’s identity.
According to documents filed with the court, Chanh V. Trinh, Cannedy Trinh, and Elizabeth Trinh, residents of Las Vegas, conspired to file federal corporate and individual income tax returns reporting false income tax withholdings and payments, which fraudulently caused the IRS to issue income tax refunds. The Trinhs filed the fraudulent returns in the names of fictitious business entities, their own names, and the names of other individuals, including a long-deceased family member. Chanh V. Trinh prepared and filed the returns. All three defendants deposited or cashed the fraudulently obtained refund checks using bank accounts and check-cashing businesses in Las Vegas. The defendants regularly concealed the funds by purchasing cashier’s checks, which they used to obtain gambling chips at Las Vegas casinos. The conspiracy resulted in false claims of more than $6 million, and more than $2 million in fraudulent refunds paid out by the IRS.
United States District Court Judge James C. Mahan scheduled sentencing for all three defendants for April 10, 2019. Chanh V. Trinh will be sentenced to 102 months in prison under his plea agreement, if accepted by the court. Cannedy Trinh will be sentenced to 24 months in prison under his plea agreement, if accepted by the court. Elizabeth Trinh faces a maximum sentence of 10 years in prison under her plea agreement. Each defendant also faces a period of supervised release, restitution and monetary penalties.
Principle Deputy Assistant Attorney General Zuckerman and U.S. Attorney Elieson thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Thomas W. Flynn and Eric C. Schmale of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Three Nevada Family Members Plead Guilty to Conspiring to Steal More Than $2 Million in Tax RefundsRead the Press Release
LAS VEGAS, Nev. - Three individuals in Las Vegas, Nevada, pleaded guilty this week to conspiring to steal more than $2 million in tax refunds from the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Dayle Elieson for the District of Nevada.
Chanh V. Trinh, Cannedy Trinh, and Elizabeth Trinh each pleaded guilty to one count of conspiring to defraud the United States by fraudulently obtaining the payment of income tax refunds. Chanh V. Trinh also pleaded guilty to one count of aggravated identity theft involving the use of his deceased brother’s identity.
According to documents filed with the court, Chanh V. Trinh, Cannedy Trinh, and Elizabeth Trinh, residents of Las Vegas, conspired to file federal corporate and individual income tax returns reporting false income tax withholdings and payments, which fraudulently caused the IRS to issue income tax refunds. The Trinhs filed the fraudulent returns in the names of fictitious business entities, their own names, and the names of other individuals, including a long-deceased family member. Chanh V. Trinh prepared and filed the returns. All three defendants deposited or cashed the fraudulently obtained refund checks using bank accounts and check-cashing businesses in Las Vegas. The defendants regularly concealed the funds by purchasing cashier’s checks, which they used to obtain gambling chips at Las Vegas casinos. The conspiracy resulted in false claims of more than $6 million, and more than $2 million in fraudulent refunds paid out by the IRS.
United States District Court Judge James C. Mahan scheduled sentencing for all three defendants for April 10, 2019. Chanh V. Trinh will be sentenced to 102 months in prison under his plea agreement, if accepted by the court. Cannedy Trinh will be sentenced to 24 months in prison under his plea agreement, if accepted by the court. Elizabeth Trinh faces a maximum sentence of 10 years in prison under her plea agreement. Each defendant also faces a period of supervised release, restitution and monetary penalties.
Principle Deputy Assistant Attorney General Zuckerman and U.S. Attorney Elieson thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Thomas W. Flynn and Eric C. Schmale of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
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Thomson business owner convicted of Medicare fraudRead the Press Release
AUGUSTA, Ga: A federal jury on Tuesday, Dec. 11, found the owner of a Thomson, Ga., medical equipment company guilty of multiple counts of Medicare fraud and identity theft in a scheme that charged the government insurance program for items that were never provided to patients and never ordered by a physician.
Detra Wiley Pate, owner and CEO of Southern Respiratory LLC, of Thomson, Ga., was found guilty on 33 counts, including health care fraud, conspiracy to commit health care fraud and aggravated identity theft for crimes dating back to 2014.
The jury deliberated less than five hours. A sentencing date before Chief Judge J. Randal Hall has not yet been set. Pate faces a sentence of up to 10 years for each count of the indictment, plus an additional sentence of at least two years on the eight charges of aggravated identity theft.
According to the indictment and evidence presented at trial, from 2014 through 2016, as part of the scheme, Pate submitted thousands of false claims, fabricated patient files, and falsified prescriptions from doctors for items such as heavy-duty wheelchairs while providing much cheaper standard wheelchairs to patients – and pocketing the substantial difference in cost. The evidence further showed that Pate used the money she stole from Medicare through this fraud to pay for jewelry, including a 1.5 carat diamond and a Rolex watch.
“Health care fraud, particularly that which targets the insurance system for elderly and vulnerable patients, is despicable,” said Southern District of Georgia U.S. Attorney Bobby L. Christine. “Clearly, the jury saw the depth to which such fraud can reach in finding overwhelming evidence of guilt in this case.”
“Those who choose to defraud Medicare are stealing from federal taxpayers and those who count on Medicare for healthcare needs,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “This conviction sends a strong message that the FBI and its federal law enforcement partners are committed to investigating and prosecuting those who, for personal profit, cheat citizens out of the services they deserve.”
“Criminals like Pate devise schemes they think will lead to boundless riches while sending the bills to taxpayers,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Instead they face prison time and banishment from government health programs.”
Assistant U.S. Attorneys Patricia Rhodes and Thomas Clarkson led the prosecution for the United States.
Temporary Restraining Order Issued in Elder Fraud InvestigationRead the Press Release
PROVIDENCE –At the request of the United States Attorney’s Office for the District of Rhode Island, U.S. District Court Chief Judge William E. Smith today issued a temporary restraining order prohibiting a Providence businessman, his wife, and a third associate, and their companies, from using the U.S. Postal Service or other services to distribute advertisements, solicitations or promotional materials that represent that recipients have or will win, or are eligible to win cash, receive prizes, or items of value in return for a “processing fee,” after the government filed a civil complaint in federal court seeking to enjoin this activity as an alleged ongoing mail fraud scheme.
The filing of the civil complaint and issuance of the temporary restraining order is announced by United States Attorney for the District of Rhode Island Stephen G. Dambruch.
It is alleged in court documents that since 2011, and continuing to the present, Michael Shine and his wife Meagan Shine, of Warwick, R.I., and Melissa Pinelli, of Cranston, R.I., have utilized the U.S. Mail to engage in predatory mail fraud schemes that primarily affect the elderly and vulnerable through fictitious businesses they owned and operated: Lucky Dog, LLC, d/b/a Premium Ops & Incentives, and Destiny Merchandise, LLC, d/b/a Independent Catalog Services, owned by the Shines, and Premier Caging Services, owned by Melissa Pinelli. The three businesses operated out of the same address in Providence, R.I. These schemes have duped victims into sending more than ten million dollars in supposed fees for the processing of cash prizes, valuable items, or other premiums that they are promised, but will never receive.
As part of the scheme, individuals, often elderly and vulnerable individuals, are contacted via U.S. Mail with deceptive solicitations that convey the false impression that recipients have been pre-selected or that they have been verified and are entitled to claim a large amount of money in a lottery, or are entitled to a valuable item. In the mailings, recipients are or were instructed to send money, frequently by a deadline, to a PO Box in Providence for the “processing” or “handling” of their purported winnings.
The mailings are printed on official-looking or certificate paper, and frequently contain other language and details designed to make them appear official or legitimate, including bar codes, document control numbers, printing that appears to be rubber stamped, such as the phrase “authorized document,” highlighted text, bank-check style typeface and formatting, and identification and other codes. The solicitations use selectively-emphasized text and graphics to create the false overall impression that recipients are receiving notices that they are already winners of substantial awards. In reality, not only have recipients not won any prize, the mailers have done nothing to verify that the recipients are eligible for such a prize.
An investigation by United States Postal Inspection Service agents and the United States Attorney’s Office revealed that sweepstakes solicitations were sent to recipients in forty-one states. Many victims interviewed stated that they were contacted numerous times and were led to believe that they had won substantial sums of money and/or valuable prizes. Each time, victims were instructed to submit processing fees of between $20 and $30 dollars in order to claim their winnings. Some elderly victims sent well over a thousand dollars to the defendants in response to multiple solicitations.
The investigation conservatively estimated the number of responses and payments received in response to the solicitations at nearly 50,000 per year.
The matter is being litigated by Assistant United States Attorneys Denise M. Barton, Ly T. Chin, and Zachary A. Cunha.
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Teacher in Federal Custody After Seeking Sex with A MinorRead the Press Release
LOUISVILLE, Ky. – A Louisville, Jefferson County Public Schools teacher has been charged in a criminal complaint, and detained as ordered by United States Magistrate Judge Regina S. Edwards for attempting to entice a minor to engage in sexual activity, announced United States Attorney Russell M. Coleman.
Brandon Lee Dietz, 37, was placed in the custody of the U.S. Marshals Service on Friday.
According to a criminal complaint filed on November 30, 2018, law enforcement became aware of Dietz’s actions on November 19, 2018, when an undercover investigator, authorized by the Kentucky Attorney General’s Department of Criminal Investigations, posing as a 14-year-old girl, was contacted over KiK messenger by an unknown subject. A conversation developed which was made sexual by the subject, including a request for sexual images, and a request to meet in person to engage in sex acts. The subject, later revealed through investigatory techniques to be Brandon Dietz, also sent two “live” images of himself to what he believed to be the 14-year old, but was actually an undercover investigator. The conversation between Dietz continued through the night of November 20, and into the next day. On November 21, 2018, the undercover agent agreed to meet Dietz in Jeffersontown, Kentucky.
Law enforcement set up surveillance in the area where the undercover agent set up to meet Dietz. The Defendant, driving a blue Honda Civic, passed one of the unmarked law enforcement vehicles. Shortly thereafter, Deitz texted the undercover agent and said he believed he was being “set up.” Deitz specifically identified areas where, in fact, unmarked law enforcement vehicles were sitting. Officials moved their vehicles, and the Defendant entered the subdivision where the meeting place was set. The vehicle immediately turned around within sight of a previously identified law enforcement vehicle and left the neighborhood at a high rate of speed. The vehicle did not come to a complete stop at the posted stop sign. The undercover investigator initiated a traffic stop, however, the vehicle did not immediately stop in spite of the use of lights and siren. When Dietz stopped the undercover investigator recognized the Defendant from images sent during the KiK communications.
In a post-Miranda interview with Dietz he admitted to traveling to the area to meet a “girl” he met online. According to the criminal complaint, Dietz admitted to having a sexual conversation with the UC after learning she was a minor, and acknowledged driving to Jeffersontown with the intent to have sex with the underage girl.
Assistant United States Attorney Jo E. Lawless is prosecuting the case. The Kentucky Attorney General’s Office – Department of Criminal Investigations conducted the investigation with support from the United States Secret Service.
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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.
Target Corporation to Pay $3,000,000 to Resolve False Claims Act Allegations Concerning Auto Refilling Medicaid Prescriptions in MassachusettsRead the Press Release
United States Attorney Erica H. MacDonald and Massachusetts Attorney General Maura Healey today announced that Target Corporation has agreed to pay a total of $3,000,000 to resolve allegations that it violated the federal False Claims Act and Massachusetts False Claims Act by submitting claims for payment to Massachusetts’ Medicaid program in violation of rules prohibiting Medicaid prescriptions from being automatically refilled.
Massachusetts’ Medicaid program, called MassHealth, is jointly funded by the federal government and the Commonwealth of Massachusetts to provide health care to low-income individuals. Along with at least 20 other states, Massachusetts does not allow pharmacies to automatically refill prescriptions paid for by Medicaid without an explicit request from the beneficiary for each refill. This policy provides an important control against wasted or unnecessary prescriptions that are reimbursed by taxpayer funds.
According to the allegations in the complaint, Target pharmacies knowingly and routinely enrolled MassHealth beneficiaries in the company’s auto-refill program, and billed MassHealth for prescriptions in violation of the state’s regulation prohibiting the practice. This practice continued until Target sold its pharmacy business to CVS Health in or around December 2015.
“This resolution demonstrates our ongoing commitment to ensuring compliance with rules that are specifically designed to protect taxpayer funds and prevent wasted medications,” said United States Attorney Erica H. MacDonald.
"Unauthorized automatic refills can result in inappropriate prescription drug use and wastes taxpayer dollars," said Massachusetts Attorney General Maura Healey. "This settlement will bring money back to our state and will help ensure that our health care resources reach those who need them the most."
This settlement resolves allegations filed in a civil lawsuit originally brought by a whistleblower under the qui tam provisions of the federal False Claims Act and Massachusetts False Claims Act, which allow private parties to bring suit on behalf of the government for false claims and to share in any recovery. The government often relies on whistleblowers to bring fraud schemes to light that might otherwise go undetected.
In this civil settlement, Target has denied the allegations of wrongdoing and False Claims Act liability. Target cooperated with the government’s investigation of this matter.
The case was handled by the Civil Division of the U.S. Attorney’s Office for the District of Minnesota and the Medicaid Fraud Control Unit of the Massachusetts’ Attorney General’s Office.
The case is United States of America, State of Minnesota, Commonwealth of Massachusetts, State of New York, and Commonwealth of Virginia, ex rel. Ryan Mesaros v. Target Corp., Civil No. 15-CV-2684 (PAM/TNL). The claims resolved by the settlement are allegations only; there has been no determination of liability.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Selma Resident Receives 7 Years in Prison for Being a Felon in Possession of a FirearmRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announces today that United States District Judge William H. Steele sentenced Daryl Dewayne Struggs, 35, a resident of Selma, Alabama, to imprisonment for eighty-four months for being a felon in possession of a firearm. As part of the sentence, the judge ordered that Struggs undergo three years of supervised release after finishing his term of imprisonment, pay a $100 mandatory special assessment, and undergo substance abuse and mental health treatment as directed by the U.S. Probation Office.
According to documents filed with the court as part of his guilty plea and the court’s pronouncements at sentencing, Struggs is a convicted felon who is barred by federal law from knowingly possessing firearms or ammunition. He was previously convicted in the Circuit Court of Dallas County, Alabama of Unlawful Possession of Marijuana in the First Degree, Burglary in the Third Degree, and Robbery in the First Degree.
Around 8:18pm on March 28, 2017, Selma Police Department officers responded to an address on Twenty Foot Avenue in Selma concerning gun shots fired and two shooting victims. According to witnesses, the suspects were driving a blue Lincoln Town car. Around 10:55pm, Selma Police Department Detective Willie Calhoun was driving to the crime scene when he saw a blue Lincoln Town car speeding on Highway 80 toward the Edmund Pettus Bridge in Selma. He stopped the vehicle. Struggs was the passenger and co-defendant Danny Jamal Tate was the driver.
Officers searched the vehicle. They recovered one round of ammunition from between the driver’s seat and passenger’s seat. Under the passenger seat, officers found a Smith & Wesson 9mm pistol. When Calhoun found the firearm, the slide was locked to the rear and the magazine was empty. Officers also found a second Smith & Wesson 9mm pistol in the vehicle. This pistol was loaded with a round in the chamber and thirty-four rounds in the extended magazine. Struggs knowingly possessed the two pistols, both of which were manufactured outside the State of Alabama.
At sentencing, Senior Judge Steele observed that the firearms were used in the shooting and underscored the serious nature of Struggs’s offense. Tate and Struggs have pending state charges in connection with the shooting.
On July 26, 2018, a federal grand jury for the Southern District of Alabama charged Struggs and Tate with one count each of being a felon in possession in violation of 18 U.S.C. § 922(g)(1). On September 14, 2018, Struggs pleaded guilty before Senior Judge Steele to being a felon in possession.
Tate remains at large. He has a pending federal warrant for his arrest.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Selma Police Department investigated the case. Assistant United States Attorney Sinan Kalayoglu prosecuted the case.