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25 September 2018
New York Man Sentenced to 46 Months in Prison for Role in Identity Theft and Bank Fraud SchemeRead the Press Release
WASHINGTON – Krishna Jannor-John Marsh, 22, formerly of New York, N.Y., was sentenced today to 46 months in prison for an identity theft scam in which he traveled throughout the country to conduct fraudulent bank transactions.
U.S. Attorney Jessie K. Liu, Brian J. Ebert, Special Agent in Charge, Washington Field Office, U.S. Secret Service and Peter R. Rendina, Inspector in Charge of the Washington Division, U.S. Postal Inspection Service, made the announcement.
Marsh pled guilty in July 2018, in the U.S. District Court for the District of Columbia, to a charge of conspiracy to commit bank fraud. He was sentenced by the Honorable James E. Boasberg. In addition to the prison term, Marsh was ordered to pay $338,100 in restitution to three banks, as well as a forfeiture money judgment of $50,000. Following his prison term, he will be placed on three years of supervised release.
According to the government’s evidence, Marsh conspired with others, including a former bank employee, to obtain access to account holders’ personal identifying information for no legitimate business purpose. He and others then presented counterfeit identification in the names of the account holders and conducted or attempted to conduct fraudulent transactions from their accounts.
Fictitious accounts were opened at other financial institutions, and the conspirators wired funds and deposited checks from the compromised bank accounts into these fictitious accounts. In his guilty plea, Marsh accepted responsibility for causing $338,100 in losses to three banks. Marsh conducted bank transactions at multiple locations in the District of Columbia, California, Florida and New York.
In announcing the sentence, U.S. Attorney Liu, Special Agent in Charge Ebert and Inspector in Charge Rendina commended the work of those who investigated the case from the U.S. Secret Service and U.S. Postal Inspection Service. They also expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Zia M. Faruqui, who assisted with forfeiture issues, Paralegal Specialist Joshua Fein, and former Paralegal Specialist Kristy Penny. Finally, they commended the work of Assistant U.S. Attorney Anthony Saler, who investigated and prosecuted the case.
New Jersey Man Pleads Guilty in Extensive Mortgage Fraud Scheme in Rhode IslandRead the Press Release
PROVIDENCE, R.I. – A New Jersey man previously convicted in federal court in Massachusetts and incarcerated for masterminding a real estate fraud scheme, pleaded guilty in federal court in Providence on Friday to charges that he again conspired to defraud financially distressed homeowners, investors, and financial institutions of fees, rental income, mortgage payment funds, property ownership and/or proceeds from the sale of their properties.
Hasan Hussain, 57, of Princeton, N.J. also pled guilty to aggravated identity theft in connection with the scheme.
Hussain’s guilty plea before U.S. District Court Judge John J. McConnell, Jr., is announced by United States Attorney Stephen G. Dambruch; Christina D. Scaringi, Special Agent in Charge of the Northeast Region of the U.S. Department of Housing and Urban Development Office of Inspector General; Brian Deck, Resident Agent in Charge of the Providence Office of the U.S. Secret Service; Harold H. Shaw, Special Agent in Charge of the Boston Division of the FBI; and Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police.
At the time of his guilty plea to the most recent federal indictment, Hussain admitted to using various business entities to trick distressed property owners, who were seeking loan modifications, into paying him fees, moving out of their homes, and selling their homes in short sale transactions. As part of the plea, Hussain further admitted that he convinced lenders to agree to artificially low sale prices for the distressed property owners’ homes by directing other individuals to damage the properties prior to the short sales. Thereby, Hussain, or individuals or businesses associated with him, acquired the properties at reduced prices, and then flipped them to investors at much higher prices. During his change of plea, Hussain admitted that these investors were defrauded of their funds, or good credit, or both when they agreed to purchase properties from Hussain.
Hussain further admitted that he assisted investors to acquire federally backed mortgages through fraudulent applications, ultimately resulting in losses to the lenders or the Federal Housing Administration. Some of the tactics employed by Hussain as part of the scheme included misuse of identities and cutting and pasting signatures on property deeds and financial documents.
As part of his plea agreement, Hussain admitted that his scheme resulted in losses between $550,000 and $1.5 million dollars; that ten or more victims were harmed; and that at least some of his victims were particularly vulnerable, as a result of their personal situation. The plea agreement also provided that the government would seek a leadership enhancement for Hussain given the extensive nature of the scheme and his role in it.
At sentencing on January 8, 2018, Hussain faces up to 32 years in federal prison, 5 years of supervised release, and a fine of $1,250,000.
A co-defendant in this matter, Ricardo Abreu, who pled guilty earlier this year is scheduled to be sentenced on October 30, 2018.
The case is being prosecuted by Assistant U.S. Attorneys Sandra R. Hebert, Richard B. Myrus, and William J. Ferland.
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Native of Mexico Charged with Illegal ReentryRead 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 Gerino Barrera-Tapia, 37, was arrested and charged by criminal complaint with illegal reentry after deportation. The charge carries a maximum penalty of two years in prison.
Assistant U.S. Attorney Elizabeth R. Moellering, who is handling the case, stated that according to the complaint, on September 12, 2018, a Cattaraugus County Sheriff's Deputy encountered the defendant during a vehicle safety check. United States Border Patrol was contacted to assist in identifying Barrera-Tapia. During questioning, the defendant stated that he was a citizen of Mexico and was illegally present in the United States. He was taken into custody. Subsequent investigation determined that Barrera-Tapia was a native and citizen of Mexico. A records check determined that the defendant was removed from the United States in February 2008.
Barrera-Tapia made an initial appearance before U.S. Magistrate Judge Michael J. Roemer and was detained.The complaint is the result of an investigation by the Cattaraugus County Sheriff’s Office, under the direction of Sheriff Timothy Whitcomb, and U.S. Border Patrol, under the direction of Patrol Agent-in-Charge Steven Oldman.
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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National Hospital Chain Will Pay over $260 Million to Resolve False Billing and Kickback AllegationsRead the Press Release
PHILADELPHIA, PA – United States Attorney William M. McSwain today announced a $55 million civil settlement with Health Management Associates (HMA) to resolve civil allegations relating to two hospitals in Lancaster, Pennsylvania. The resolution of these claims in the Eastern District is part of a larger $260 million settlement between the Department of Justice and HMA which arose out of HMA’s fraudulent billing practices in multiple healthcare institutions across the United States.
Between 2009 and 2012, two former HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center in Pennsylvania, billed federal health care programs for services referred to the hospitals by individual physicians and physician groups. According to the government, HMA compensated these physicians and physician groups through complex kickback arrangements in exchange for a patient referral stream. In one instance, HMA bought two businesses from a physician group for grossly inflated amounts. HMA also paid that same physician group under a contract that was styled as payment for services that were never performed or that neither party ever had any intention of performing. In another instance, HMA paid a local surgeon exorbitantly more than the fair market value of his services. According to the government, these arrangements were intentionally structured to disguise payments which were, in actuality, payments for patient referrals, not for legitimate services.
“Our resolution of this matter and the significant recovery we have obtained show once again that no matter how complex the scheme is, we will find it, stop it, and punish it,” said U.S. Attorney McSwain. “HMA covered up kickbacks for patient referrals with a host of sham joint venture agreements, lease payments, and management agreements. These sorts of improper physician inducements are a form of ‘pay to play’ business practices that will not be tolerated. Healthcare institutions cannot pad their bottom line at the expense of the American taxpayers. And most importantly, this conduct must be rooted out because it gets in the way of providing top-notch patient care to American citizens.”
The allegations resolved by the settlement were brought in eight lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The eight qui tam cases, which were filed in various districts including the Eastern District of Pennsylvania, were transferred to the U.S. District Court for the District of Columbia as part of a multi-district litigation presided over by the Honorable Reggie B. Walton.
George E. Miller and Michael J. Metts, former HMA hospital executives in Lancaster, filed suit in the Eastern District of Pennsylvania, alleging the improper financial relationships between HMA and the physicians groups. Mr. Miller and Mr. Metts will receive approximately $12.4 million as their share of the recovery from HMA in that case. “We sincerely thank Mr. Miller and Mr. Metts. Together with their lawyers, these two citizens provided essential assistance to the government throughout this case. Without the willingness of relators to shed light on allegations, preserving government program funds would be far more challenging. Their efforts played a vital role in the resolution of these cases,” said U.S. Attorney McSwain.
“Compliance with government healthcare rules requires that patients only receive treatment they actually need. Then government programs should be billed just for those services. No more, no less,” said Derrick L. Jackson, Acting Assistant Inspector General for Investigations at the U.S. Department of Health and Human Services. “Let there be no doubt—we will continue to protect federal healthcare programs and beneficiaries by holding provider organizations fully accountable.”
This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and U.S. Office of Personnel Management Office of the Inspector General. For the U.S. Attorney’s Office, the investigation and settlement were handled by Assistant U.S. Attorneys Charlene Keller Fullmer and Veronica Finkelstein.
The civil claims resolved by the settlement are allegations against HMA only, and there has been no determination of liability.
Milton Man Pleads Guilty to Sex TraffickingRead the Press Release
BOSTON – A Milton man pleaded guilty today in federal court in Boston to federal sex trafficking charges.
Duhamel Cassagnol, 30, pleaded guilty to sex trafficking by force, fraud, or coercion; engaging in a conspiracy to commit sex trafficking; and transporting an individual for prostitution. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for Dec.18, 2018. On Dec. 8, 2017, Cassagnol was arrested along with Geneiva Whaley, 23, of Connecticut. In May 2018, Whaley pleaded guilty to one count of transportation of an individual for prostitution and is scheduled for be sentenced on Oct. 4 2018.
Between approximately July 2014 and February 2016, Cassagnol worked with Whaley to prostitute several victims. Cassagnol and Whaley advertised the victims using online ad-posting sites, including Backpage.com, and housed the victims in hotel rooms reserved in Whaley’s name in Massachusetts, Connecticut, New York and Florida.
The victims being prostituted were addicted to drugs, usually heroin. To keep their victims compliant, Cassagnol and Whaley provided them with drugs in exchange for the income the women earned through prostitution. The victims were only entitled to drugs if they generated income. In some instances, Cassagnol was violent and threatened several of the victims. The violence included beating the victims and, during one instance, forcing a victim to use drugs against her will.
The charge of sex trafficking through force, fraud, or coercion provides for a sentence of no less than 15 years and up to life in prison, no less than five years and up to a lifetime of supervised release, and a fine of up to $250,000. The charge of conspiracy to commit sex trafficking provides for a sentence of up to life in prison, no less than five years and up to a lifetime of supervised release, and a fine of up to $250,000. The charge of transporting an individual for prostitution provides for a sentence of up to 10 years in prison, no less than five years and up to a lifetime of supervised release, and a fine of up to $250,000. Each count also provides for mandatory restitution and forfeiture. 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 Peter C. Fitzhugh, Special Agent in Charge of the Homeland Security Investigations in Boston, made the announcement today. Assistance with the investigation was provided by the Massachusetts State Police, Lexington and Needham Police Departments, and Vernon (Connecticut) Police Department. Assistant U.S. Attorney Brian A. Pérez-Daple of Lelling’s Civil Rights Enforcement Team is prosecuting the case.
Miami Resident Convicted at Trial of Robbing Miami Shores TD Bank at Gunpoint and Brandishing and Discharging Firearm in Furtherance of the Armed RobberyRead the Press Release
Following a one-week jury trial, on September 21, 2018, Joudanorve Lafleur, of Miami, Florida, was convicted of armed bank robbery, and brandishing and discharging a firearm in furtherance of the armed robbery.
Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida and Robert Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office made the announcement.
According to evidence presented at trial, at approximately 9:20 a.m. on April 20, 2018 at a TD Bank in Miami Shores, Lafleur, wearing a black ski mask, black hoodie, and pants, robbed two bank tellers and one bank customer at gunpoint. After repeatedly demanding “all of the hundreds” from his victims, Lafleur fired a bullet into the ceiling of the bank. Then, he fled, with more than $2,000.
The FBI tracked Lafleur to his residence within an hour of the robbery, and after a search of Lafleur’s home, investigators recovered his disguise (mask and hoodie), the stolen money, and the firearm used in the robbery, among other items. Evidence at trial also showed that Lafleur robbed one of his elderly neighbors, stealing his clothes in the minutes before law enforcement arrived, in an attempt to distance himself from the crime and change his appearance. The trial evidence included witness testimony, bank surveillance video, DNA expert testimony, and cellular telephone analysis.
Sentencing is scheduled before U.S. District Judge Jose E. Martinez on December 5, 2018, at 2:00 p.m. Lafleur faces up to twenty five years in prison for the bank robbery and a consecutive mandatory minimum term of ten years to life in prison for brandishing and discharging the firearm offense of conviction.
This case stems from Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Mrs. Fajardo Orshan commended the investigative efforts of the FBI in this matter. This case is being prosecuted by Assistant U.S. Attorneys Lisa H. Miller and Jessica K. Obenauf.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Menominee and Oneida Tribes Receive Federal Grants from the Department of JusticeRead the Press Release
United States Attorney Matthew Krueger of the Eastern District of Wisconsin joined the Department of Justice in announcing more than $113 million in grant awards to improve public safety, serve victims of crime, combat violence against women, and support youth programs in American Indian and Alaska Native communities. This includes four grants totaling $2,934,228 to the Menominee Indian Tribe of Wisconsin and two grants totaling $507,684 to the Oneida Tribe of Indians of Wisconsin. The Menominee Indian Tribe received funding for Community Policing, Violence Against Women, Substance Abuse, and Victim Assistance. The Oneida grants were for Alcohol / Substance Abuse and Youth Programs.
United States Attorney Matthew Krueger stated "Native Americans suffer from violent crimes at far too high of rates. These grants underscore the Department of Justice's commitment to working together with Native American communities to reduce such violence."
Nationwide, grants were awarded to 133 American Indian tribes, Alaska Native villages, and other tribal designees through the Coordinated Tribal Assistance Solicitation, a streamlined application for tribal-specific grant programs. Of the $113 million, just over $53 million comes from the Office of Justice Programs, more than $35 million from the Office on Violence Against Women, and more than $24.7 million from the Office of Community Oriented Policing Services.
In addition, the Department is in the process of allocating up to $133 million in a first-ever set aside program to serve victims of crime in American Indian and Alaska Native communities. The awards are intended to help tribes develop, expand and improve services to victims of crime by providing funding, programming and technical assistance. Recipients will be announced in the near future.
“With these awards, we are doubling the amount of grant funding devoted to public safety programs and serving victims of crime in Native American communities,” said Principal Deputy Associate Attorney General Jesse Panuccio. “There is an unacceptable level of violent crime and domestic abuse in American Indian and Alaska Native communities. This increase in resources, together with our aggressive investigation and prosecution of crimes, shows how seriously Attorney General Sessions and the entire Department of Justice take these issues. We are committed to reducing violent crime and improving public safety.”
CTAS awards cover nine purpose areas: public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; children’s justice act partnerships; services for victims of crime; violence against women; juvenile justice; and tribal youth programs. CTAS funding helps tribes develop and strengthen their justice systems’ response to crime, while expanding services to meet their communities’ public safety needs.
The grant announcements are part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in American Indian and Alaska Native communities.
A listing of today’s announced CTAS awards is available at: www.justice.gov/tribal/page/file/1095161/download.
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Member of the Violent “Murdaland Mafia Piru” Bloods Gang Pleads Guilty to Racketeering and Drug ConspiraciesRead the Press Release
Baltimore, Maryland - Dontray Johnson, a/k/a “Gambino,” “Bino,” and “Tray,” age 33, of Baltimore, Maryland pleaded guilty today to racketeering and drug conspiracies related to their participation in the gang activities of the Murdaland Mafia Piru (MMP), a subset of the Bloods gang. As part of his gang activities, Johnson admitted committing two murders, and to conspiracy to distribute controlled substances.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Interim Commissioner Gary Tuggle of the Baltimore Police Department; Chief Terrence B. Sheridan of the Baltimore County Police Department; Baltimore City State’s Attorney Marilyn J. Mosby; and Baltimore County State’s Attorney Scott Shellenberger.
“Federal authorities worked with the Baltimore City and Baltimore County Police Departments and State’s Attorney’s Offices to dismantle a criminal organization that dealt drugs and despair in Northwest Baltimore and Baltimore County,” said U.S. Attorney Robert K. Hur. “We are committed to using this sort of coordinated effort to bring to justice the violent gang members that terrorize our communities.”
“The Murdaland Mafia Piru and Dontray Johnson showed no concern for the Baltimore communities they flooded with murder, violence, and drugs. They irreparably damaged the families of their victims and the neighborhoods in which they operated,” said ATF Special Agent in Charge Cekada. “Today’s plea shows the importance of investigating and prosecuting these violent groups who willfully destroy communities.”
According to Johnson’s plea agreement and court documents, MMP, also known as the “Mob” or “Mobsters,” is a violent subset of the Bloods gang that operates in Maryland and elsewhere. MMP was modeled after the Italian Mafia, and was organized hierarchically, with “the Don,” at the top and various “Bosses,” “Underbosses,” “Capos,” “Lieutenants,” and “Mobsters” underneath. For many years, MMP has controlled the drug trade in large swaths of Northwest Baltimore City and neighboring Baltimore County, including Forest Park, Windsor Mill, Gwynn Oak, Howard Park, Woodlawn, and Walbrook Junction. The gang’s drug shop in the 5200 block of Windsor Mill Road was particularly lucrative due to its close proximity to Interstate 70, and it frequently attracted drug customers driving from Western Maryland and neighboring states. MMP’s members enriched themselves through drug trafficking and other criminal activities, and using violence and threats of violence to intimidate or retaliate against witnesses, protect the gang’s territories, enforce debts, and eliminate rivals.
Johnson admits that he was a member of MMP and participated in the gang’s affairs through a pattern of racketeering activities, including murder, extortion, robbery, witness tampering and retaliation, money laundering, and drug distribution.
Specifically, Johnson admits that on November 22, 2012, he murdered MMP member Antoine Ellis, a/k/a Poopy, in the 200 block of North Forest Park Avenue, because he had shown disloyalty to MMP. Earlier that day, Johnson had posted a comment to his Facebook account saying “198 n risen,” a reference to that year’s murder tally in Baltimore City. On September 29, 2015, Johnson murdered MMP member Brian Johnson, a/k/a Nutty B, because he refused to pay gang dues that Johnson was collecting for an MMP member.
As detailed in his plea agreement, on November 1, 2013, Johnson was featured in two rap videos that were posted to a social media website. The first video, “Boy You Lying,” was posted to enhance the gang’s status, intimidate rivals, and discourage anyone from selling drugs in MMP territory without paying its members. The second video, “Str8 Mobbin,” was posted to assert the gang’s dominance over its drug territories. It features Johnson with other MMP members, as well as footage of various MMP drug locations. Johnson brandishes a firearm in the video.
On July 31, 2015, law enforcement executed a search warrant at Johnson’s residence in Owings Mills and recovered 28 grams of heroin, 70 rounds of .22-caliber ammunition, a bulletproof vest, $1,480 in cash, and an “owe sheet” with a tally of drug debts owed by MMP members and associates.
Finally, Johnson admits that he conspired with other MMP members to distribute at least one kilogram of heroin and 280 grams of crack cocaine, and that he knew that during the conspiracy between one and three kilograms of heroin and between 280 and 840 grams of crack cocaine would be distributed.
In addition to Johnson, fourteen of twenty-six defendants have pleaded guilty in the case. Trial is tentatively scheduled for November 5, 2018 through February 1, 2019.
Johnson and the government have agreed that if the Court accepts the plea agreement, Johnson will be sentenced to 30 years in prison. U.S. District Judge Catherine C. Blake has scheduled sentencing for Johnson on November 16, 2018 at 10:30 a.m.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
United States Attorney Robert K. Hur praised the ATF, the Baltimore City and Baltimore County Police Departments, and the Baltimore City and Baltimore County State’s Attorney’s Offices for their work in the investigation and prosecution. Mr. Hur thanked Assistant United States Attorneys Christina Hoffman and Lauren E. Perry, who are prosecuting the case.
McKeesport Man Illegally Possessed Fentanyl and a PistolRead the Press Release
PITTSBURGH, PA – A resident of McKeesport, Pennsylvania, pleaded guilty in federal court to charges of possession with the intent to distribute fentanyl and possession of a firearm in furtherance of a drug trafficking crime, United States Attorney Scott W. Brady announced today.
Marcaius Butler, Jr., age 21, of McKeesport, Pennsylvania, pleaded guilty to two counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that on or about March 21, 2017, Butler possessed with the intent to distribute fentanyl, and also possessed a Ruger pistol in furtherance of that crime.
Judge Cercone scheduled sentencing for February 1, 2019 at 1 p.m. The law provides for a total sentence of not less than five years of imprisonment and up to life in prison, a fine of $1,250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Butler’s bond.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Allegheny County Police Department conducted the investigation that led to the prosecution of Butler.
Massachusetts Man Admits Paying Minor to Engage in Sexual Activity over SkypeRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that WILLIAM GAUVIN, 43, of Andover, Massachusetts, waived his right to be indicted and pleaded guilty today before U.S. District Judge Michael P. Shea in Hartford to one count of receipt of child pornography.
According to court documents and statements made in court, between approximately October 2016 and March 2017, GAUVIN, using the name “Will Wiggins,” solicited a 17-year-old boy in Connecticut to engage in sexually explicit conduct over Skype. In exchange for the minor victim transmitting visual depictions of sexually explicit conduct to GAUVIN, GAUVIN paid the minor victim more than $3,000 using PayPal. GAUVIN also asked the minor victim to persuade his brother, who was 15, to engage in sexually explicit conduct in exchange for money.
GAUVIN resided in Worcester, Massachusetts, at the time of the criminal conduct.
Judge Shea scheduled sentencing for December 20, 2018, at which time GAUVIN faces a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years.
GAUVIN was arrested on a federal criminal complaint on November 1, 2017. He is released on a $100,000 bond pending sentencing.
This matter has been investigated by Homeland Security Investigations and the Connecticut State Police, with the assistance of the Worcester Police Department. The case is being prosecuted by Assistant U.S. Attorney Nancy V. Gifford.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Louisville Man Sentenced for Wire Fraud, Identity TheftRead the Press Release
LOUISVILLE, Ky. - United States District Court Senior Judge Charles R. Simpson III has sentenced Louisville, Kentucky, man, Dennis A. L. Booker to 65 months in federal prison today, followed by 3 years of supervised release for six counts of wire fraud and one count of aggravated identity theft, announced United States Attorney Russell M. Coleman. The Court also ordered Booker to pay restitution of $112,000 to the victim of his scheme. There is no parole in the federal system.
The Court sentenced Booker, age 40, for his participation in a fraudulent scheme between October 2015 and June 2017. According to a plea agreement filed in the case, Booker told J.M., the victim, he needed cash to close a real estate transaction, and promised to repay J.M. when the transaction closed. J.M. loaned Booker $43,000, which was never repaid. J.M. demanded repayment, and Booker promised to wire the money, but told J.M. he needed his credit card number to pay fees associated with the transfer of payment. Instead of repaying the victim, Booker used the credit card number to obtain cash advances at Churchill Downs and to pay for personal expenses, resulting in a total loss of approximately $140,000.
Booker was serving supervised release during the time of the fraud for a previous conviction in federal court.
Assistant United States Attorney David Weiser prosecuted the case. The United States Secret Service conducted the investigation.
Lockport Man Pleads Guilty to Selling Fentanyl That Resulted in DeathRead 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 Pablo Lugo III, 27, of Lockport, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to possession with intent to distribute, and distribution, of fentanyl. The charge carries a maximum penalty of 20 years in prison and $1,000,000 fine.
Assistant U.S. Attorney Meghan A. Tokash, who is handling the case, stated that on March 29, 2015, Lockport Police Officers responded to 152 Caledonia Street and found an individual, K.R., deceased. Officers recovered four reddish paper wrappers in the bathroom, one of which was tested at the Niagara County Sheriff’s Office Forensic Laboratory and determined to contain fentanyl. An autopsy determined that K.R. died of acute fentanyl intoxication.
Text messages recovered from K.R.’s cellular phone revealed that on March 28, 2015, K.R. communicated with Lugo between 12:22 p.m. and 12:51 p.m. K.R. died shortly after the text message exchange. The defendant admits that K.R.’s death resulted from the drugs he gave to K.R.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division; the Niagara County Drug Enforcement Task Force, under the direction of Sheriff James Voutour; and the Lockport Police Department, under the direction of Acting Chief Steven Preisch.
Sentencing is scheduled for December 20, 2018, at 3:00 p.m. before Judge Wolford.
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Lawrence Man Sentenced for Interstate Opioid Trafficking ConspiracyRead the Press Release
BOSTON – A Lawrence man was sentenced in federal court in Boston yesterday for his role in an opioid trafficking conspiracy involving the distribution of fentanyl, heroin, and oxycodone across Massachusetts and Florida.
Johnny Urena, 30, was sentenced by U.S. District Court Judge Denise J. Casper to five years in prison and four years of supervised release. In April 2018, Urena pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin and 40 grams or more of fentanyl, one count of conspiracy to distribute and to possess with intent to distribute oxycodone, and one count of conspiracy to launder monetary instruments.
Urena was arrested along with several others in March 2017 for their roles in a widespread conspiracy involving opioid trafficking and money laundering offenses in Massachusetts and Florida. Their arrests were the result of a three-year federal investigation into opioid-trafficking in New England.
From at least 2013, Urena conspired with co-defendants to sell quantities of heroin and/or fentanyl in Massachusetts, and to receive, transport, and distribute large quantities of oxycodone pills shipped from Florida to Massachusetts. Urena then deposited the cash proceeds of drug sales into various funnel bank accounts in order to conceal the nature and ownership of the funds.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Field Division; John Gibbons, U.S. Marshal for the District of Massachusetts; and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division, made the announcement today. Valuable assistance was provided by the Massachusetts State Police and the Biddeford (Maine), Framingham, Haverhill, Lawrence, Manchester (N.H.), Methuen, Millis, Natick, Stoughton, and Waltham Police Departments. Assistant U.S. Attorneys Nadine Pellegrini and Craig Estes of Lelling’s Office prosecuted the case.
Lake Worth Resident Sentenced to 20 Years in Prison for Distributing Heroin, Carfentanyl and CocaineRead the Press Release
Roberto Paul Mendoza, 28, of Palm Beach County, was sentenced today by U.S. District Court Judge Donald M. Middlebrooks to 240 months in prison, to be followed by four years of supervised release, after previously pleading guilty to three counts of distribution of heroin, carfentanyl, and cocaine, one count of possession with intent to distribute heroin, and one count of knowingly possessing a firearm in furtherance of drug trafficking.
Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA) and Ric Bradshaw, Sheriff of the Palm Beach County Sheriff’s Office (PBSO) made the announcement.
According to the court record, Mendoza distributed heroin mixed with carfentanyl and cocaine to an undercover police officer on three occasions. Thereafter, during the execution of a search warrant of Mendoza’s residence and vehicle distribution quantities of heroin and a firearm were discovered and seized by law enforcement. Further, court records also showed that Mendoza was responsible for distributing carfentanyl, which ultimately caused the death of a 40 year-old man.
Mrs. Fajardo Orshan commended the investigative efforts of the DEA and PBSO in this matter. This case was prosecuted by Assistant U.S. Attorney Jennifer C. Nucci.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Jury Convicts Joplin Woman of Illegal Firearm, Faces at Least 15 Years in PrisonRead the Press Release
SPRINGFIELD, Mo. – A Joplin, Mo., woman was convicted by a federal trial jury today of illegally possessing a firearm.
Tracy Arlene Smith, 47, was found guilty of one count of being a felon and an unlawful user of cocaine and methamphetamine in possession of a firearm and ammunition.
According to evidence introduced during the trial, law enforcement officers executed a search warrant at Smith’s residence located in Joplin, on June 22, 2017. During the execution of the search warrant, members of the Ozark Drug Enforcement Team seized Smith’s purse, which contained a CDM Prod. Inc., .22-caliber pistol, loaded with six rounds of .22 caliber ammunition. Officers also seized drug paraphernalia.
Under federal law, it is illegal for anyone who is an unlawful user of controlled substances, or who has been convicted of a felony, to be in possession of any firearm or ammunition. Smith, who was on parole at the time she committed the offense, has five prior felony convictions for forgery, four prior felony convictions for possession of a controlled substance, and prior felony convictions for sale of a controlled substance (on three separate occasions) and assault.
Under federal statutes, Smith is subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to a sentence of life in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Following the presentation of evidence, the jury in the U.S. District Court in Springfield, Mo., deliberated for approximately 30 minutes before returning the guilty verdict to U.S. District Judge M. Douglas Harpool, ending a trial that began Monday, Sept. 24, 2018.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Randall D. Eggert and Assistant U.S. Attorney Nhan D. Nguyen. It was investigated by the Ozark Drug Enforcement Team and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Juniata County Business Man Charged with $1 Million Loan FraudRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Brian Douglas Sheaffer, age 56, of Port Royal, Pennsylvania, was indicted on September 19, 2018, by a federal grand jury with ten counts of mail and wire fraud.
According to United States Attorney David J. Freed, the indictment alleges that between January 2010 and May 2016, Sheaffer, a former President, sole owner, and manager of Perry Petroleum Equipment Ltd., Inc. (PPE), engaged in a scheme to defraud business acquaintances, family, and friends by, among other things, falsely representing to them that the money they agreed to loan to Sheaffer and PPE would be used to fund the purchase of fuel tanks and other equipment PPE used in its operations. The indictment alleges that Sheaffer used the loan proceeds to pay for personal expenses such as gambling and business expenses such as PPE payroll, insurance, federal taxes, and state taxes. It is also alleged that Sheaffer solicited and received more than $1,000,000.00 in loans from more than twenty lenders.
The case was investigated by the Federal Bureau of Investigation. Assistant Joseph J. Terz is prosecuting the case.
Indictments 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 these offenses is 40 years of imprisonment, a term of supervised release following imprisonment, and a $1,000,000 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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Jackson Woman Sentenced for Illegally Possessing a FirearmRead the Press Release
Jackson, Miss.—Heather Elizabeth Wright-Beard, 40, of Jackson, was sentenced today by United States Chief District Judge Daniel P. Jordan III, to 70-months in federal prison, followed by three years of supervised release, for possession of a firearm by a convicted felon, announced U.S. Attorney Mike Hurst, U.S. Marshal George White, and Special Agent in Charge Dana Nichols with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On December 2, 2016, while attempting to execute an arrest warrant at the residence of Heather Elizabeth Wright-Beard, deputies with the U.S. Marshal Service Gulf Coast Regional Fugitive Task Force observed a round of shotgun ammunition in plain view on top of a gun safe in a closet adjacent to the kitchen. Since Wright-Beard and her husband are convicted felons and prohibited from possessing firearms or ammunition, deputies obtained and executed a search and seizure warrant, recovering a Winchester .22 caliber rifle, a Taurus .22 caliber revolver, and 1,677 rounds of assorted ammunition scattered throughout the residence and garage.
Wright-Beard was convicted previously in the Circuit Court of Rankin County for the felony offense of possession of methamphetamine and possession of cocaine. She was convicted a second time in the Circuit Court of Rankin County for the felony offense of possession of methamphetamine.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Mississippi Bureau of Narcotics, and the U.S. Marshal Service Gulf Coast Regional Fugitive Task Force and prosecuted by Assistant United States Attorney Keesha D. Middleton as part of the U.S. Department of Justice’s Project Safe Neighborhood.
Justice Department Will Award up to $246 Million in Grants to Improve Public Safety in American Indian and Alaska Native CommunitiesRead the Press Release
SIOUX FALLS – United States Attorney Ron Parsons joined the Department of Justice in announcing more than $113 million in grant awards to improve public safety, serve victims of crime, combat violence against women, and support youth programs in American Indian and Alaska Native communities. Included in that amount for the District of South Dakota was $414,626 for the Rosebud Sioux Tribe, and $339,925 for the Sisseton Wahpeton Tribe.
“I am grateful for this substantial investment in local public safety by the Department of Justice,” said U.S. Attorney Parsons. “Through our partnerships with Tribal governments, we are committed not only to prosecuting violent crime and domestic abuse offenders in Native American communities, but to aiding victims with the resources needed to recover, persist, and overcome.”
Nationwide, grants were awarded to 133 American Indian tribes, Alaska Native villages, and other tribal designees through the Coordinated Tribal Assistance Solicitation, a streamlined application for tribal-specific grant programs. Of the $113 million, just over $53 million comes from the Office of Justice Programs, more than $35 million from the Office on Violence Against Women, and more than $24.7 million from the Office of Community Oriented Policing Services.
In addition, the Department is in the process of allocating up to $133 million in a first-ever set aside program to serve victims of crime in American Indian and Alaska Native communities. The awards are intended to help tribes develop, expand, and improve services to victims of crime by providing funding, programming and technical assistance. Recipients will be announced in the near future.
“With these awards, we are doubling the amount of grant funding devoted to public safety programs and serving victims of crime in Native American communities,” said Principal Deputy Associate Attorney General Jesse Panuccio, who made the announcement during his remarks at the 26th Annual Four Corners Indian Country Conference in Santa Fe, New Mexico. “There is an unacceptable level of violent crime and domestic abuse in American Indian and Alaska Native communities. This increase in resources, together with our aggressive investigation and prosecution of crimes, shows how seriously Attorney General Sessions and the entire Department of Justice take these issues. We are committed to reducing violent crime and improving public safety.”
The Four Corners Conference is facilitated annually by U.S. Attorneys from Arizona, Colorado, New Mexico and Utah to provide a forum for discussion of justice-related topics with a large number of populous and diverse tribal nations located in the region.
CTAS awards cover nine purpose areas: public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; children’s justice act partnerships; services for victims of crime; violence against women; juvenile justice; and tribal youth programs. CTAS funding helps tribes develop and strengthen their justice systems’ response to crime, while expanding services to meet their communities’ public safety needs.
This announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in American Indian and Alaska Native communities.
A listing of the CTAS awards is available at www.justice.gov/tribal/page/file/1095161/download.
Hospital Chain Will Pay over $260 Million to Resolve False Billing and Kickback Allegations; One Subsidiary Agrees to Plead GuiltyRead the Press Release
Health Management Associates, LLC (HMA), formerly a U.S. hospital chain headquartered in Naples, Florida, will pay over $260 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States. The government alleged that HMA knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services, paid remuneration to physicians in return for patient referrals, and submitted inflated claims for emergency department facility fees.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Assistant Attorney General Joseph H. Hunt of the Justice Department’s Civil Division, U.S. Attorney Maria Chapa Lopez for the Middle District of Florida, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, U.S. Attorney Charles E. Peeler for the Middle District of Georgia, U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois, U.S. Attorney R. Andrew Murray for the Western District of North Carolina, U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania, U.S. Attorney Sherri Lydon for the District of South Carolina, Assistant Director Robert Johnson of FBI’s Criminal Investigative Division, and Acting Assistant Inspector General for Investigations Derrick L. Jackson for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
HMA was acquired by Community Health Systems Inc. (CHS), a major U.S. hospital chain, in January 2014, after the alleged conduct at HMA occurred. Since July 2014, HMA has been operating under a Corporate Integrity Agreement (CIA) between CHS and the HHS-OIG.
As part of the criminal resolution, HMA entered into a three-year Non-Prosecution Agreement (NPA) with the Criminal Division’s Fraud Section in connection with a corporate-driven scheme to defraud Federal health care programs by unlawfully pressuring and inducing physicians serving HMA hospitals to increase the number of emergency department patient admissions without regard to whether the admissions were medically necessary. The scheme involved HMA hospitals billing and obtaining reimbursement for higher-paying inpatient hospital care, as opposed to observation or outpatient care, from Federal health care programs, increasing HMA’s revenue. Under the terms of the NPA, HMA will pay a $35 million monetary penalty. Under the terms of the NPA, HMA and CHS, the current parent company, agreed to cooperate with the investigation, report allegations or evidence of violations of Federal health care offenses, and ensure that their compliance and ethics program satisfies the requirements of an amended and extended CIA between CHS and HHS-OIG.
In addition, an HMA subsidiary, Carlisle HMA, LLC, formerly doing business as Carlisle Regional Medical Center, has agreed to plead guilty to one count of conspiracy to commit health care fraud. The plea agreement remains subject to acceptance by the court. Up until 2017, Carlisle HMA, LLC owned and operated Carlisle Regional Medical Center, an acute care hospital located in Carlisle, Pennsylvania. Carlisle HMA, LLC was charged in a criminal information filed today in the District of Columbia with conspiracy to commit health care fraud.
According to admissions made in the resolution documents, HMA instituted a formal and aggressive plan to improperly increase overall emergency department inpatient admissions at all HMA hospitals, including at Carlisle Regional Medical Center. As part of the plan, HMA set mandatory company-wide admission rate benchmarks for patients presenting to HMA hospital emergency departments – a range of 15 to 20 percent for all patients presenting to the emergency department, depending on the HMA hospital, and 50 percent for patients 65 and older (i.e. Medicare beneficiaries) - solely to increase HMA revenue. HMA executives and HMA hospital administrators executed the scheme by pressuring, coercing and inducing physicians and medical directors to meet the mandatory admission rate benchmarks and admit patients who did not need impatient admission through a variety of means, including by threatening to fire physicians and medical directors if they did not increase the number of patients admitted.
“HMA pressured emergency room physicians, including through threats of termination, to increase the number of inpatient admissions from emergency departments—even when those admissions were medically unnecessary,” said Assistant Attorney General Benczkowski. “Hospital operators that improperly influence a physician’s medical decision-making in pursuit of profits do so at their own peril. Where we find such conduct, the Criminal Division’s Health Care Fraud Unit, together with our Civil Division and law enforcement colleagues, will aggressively prosecute those responsible to the fullest extent of the law.”
HMA also agreed to pay $216 million as part of a related civil settlement. The civil settlement resolves HMA’s liability for submitting false claims between 2008 and 2012 as part of its corporate-wide scheme to increase inpatient admissions of Medicare, Medicaid and the Department of Defense’s (DOD) TRICARE program beneficiaries over the age of 65. The government alleged that the inpatient admission of these beneficiaries was not medically necessary, and that the care needed by, and provided to, these beneficiaries should have been provided in a less costly outpatient or observation setting. HMA agreed to pay $62.5 million to resolve these allegations with $61,839,718 being paid to the United States and $706,084 being paid to participating States.
The civil settlement also resolves allegations that during the period from 2003 through 2011, two HMA hospitals in Florida, Charlotte Regional Medical Center and Peace River Medical Center, billed federal health care programs for services referred by physicians to whom HMA provided remuneration in return for patient referrals. To induce patient referrals, Charlotte Regional provided a local physician group with free office space and staff, as well as direct payments, which purportedly covered overhead and administrative costs incurred by the group for its management of a Charlotte Regional physician. HMA also provided another local physician with free rent and upgrades to his office space. HMA agreed to pay $93.5 million to resolve these civil allegations, with the United States receiving $87.96 million, and the State of Florida receiving $5.54 million.
Additional allegations that are resolved by the civil settlement are that between 2009 and 2012, two former HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center in Pennsylvania, billed federal health care programs for services referred by physicians with whom the facilities had improper financial relationships. These relationships stemmed from HMA’s excessive payments to (1) a large physician group in return for two businesses owned by the group and for services allegedly performed by the group, and (2) a local surgeon that exceeded the value of the services provided. The government alleged that these arrangements were structured in this manner to disguise payments intended to induce the referral of patients. HMA agreed to pay $55 million to the United States to resolve these civil allegations.
Finally, the civil settlement will also resolve claims that Crossgates Hospital, an HMA facility in Brandon, Mississippi, leased space to a local physician from Jan. 15, 2005 through Jan. 14, 2007, but required the physician to pay rent for only half of the space he was actually occupying, in return for patient referrals to Crossgates Hospital. HMA agreed to pay $425,000 to the United States to resolve these civil allegations.
Federal law, including the Anti-Kickback Statute and the Stark Law, prohibits hospitals from providing financial inducements to physicians for referrals. These provisions are designed to ensure that physician decision-making is not compromised by improper financial incentives.
“Billing for unnecessary hospital stays wastes federal dollars,” said Assistant Attorney General Hunt. “In addition, offering financial incentives to physicians in return for patient referrals undermines the integrity of our health care system. Patients deserve the unfettered, independent judgment of their health care professionals.”
“The payment of kickbacks in exchange for medical referrals undermines the integrity of our healthcare system,” said U.S. Attorney Chapa Lopez. “Today’s resolution should remind healthcare providers of their duty to comply with the law, and the heavy price to be paid for corrupt practices committed by their executives. Our Civil Division will continue to invest itself in the pursuit of health care providers who violate the law for personal gain.”
“Our office will continue to enforce prohibitions on improper financial relationships between health care providers and their referral sources, as these relationships can serve to corrupt physician judgment about a patient’s true health needs,” said U.S. Attorney Fajardo Orshan. “We will devote all necessary resources to ensure that those rendering medical care do so for the sole benefit of the patient and in compliance with the law.”
“By manipulating patient status, HMA increased Medicare costs and pocketed taxpayer funds to which it was not entitled,” said U.S. Attorney Peeler. “Our Medicare patients and our taxpayers deserve better, and I am proud that justice has been done. Nonetheless, we will continue to pursue those hospitals in our district that would seek to take advantage of the Medicare Program.”
“Government healthcare programs are vital to the welfare of our communities,” said U.S. Attorney Murray for the Western District of North Carolina, where two HMA hospitals were located. “We will aggressively pursue providers that fraudulently inflate charges to government programs and divert scarce resources from those in need into their own pockets.”
“Our resolution of this matter and the significant recovery we have obtained show once again that no matter how complex the scheme is, we will find it, stop it, and punish it,” said U.S. Attorney McSwain. “HMA covered up kickbacks for patient referrals with sham joint venture agreements, lease payments, and management agreements. These sorts of improper physician inducements are a form of ‘pay to play’ business practices that will not be tolerated. Healthcare institutions cannot pad their bottom line at the expense of the American taxpayers. And most importantly, this conduct must be rooted out because it gets in the way of providing top-notch patient care to American citizens.”
“It is critically important to all of us that the patients’ interest drive the physicians’ decisions on care,” said U.S. Attorney Lydon. “Unnecessary hospital admissions not only drive up costs but can cause damage to patients and cannot be tolerated.”
The government further alleged that from September 2009 through December 2011, certain HMA hospitals submitted claims to Medicare and Medicaid seeking reimbursement for falsely inflated emergency department facility charges. HMA agreed to pay $12 million to resolve these civil allegations, with $11.028 million being paid to the United States and $972,000 being paid to participating States.
“Compliance with government healthcare rules requires that patients only receive treatment they actually need,” said HHS-OIG Acting Assistant Inspector General for Investigations Jackson. “Then government programs must be billed just for those services. No more, no less. Let there be no doubt, we will continue to protect federal healthcare programs and beneficiaries by holding provider organizations fully accountable.”
“This settlement is a result of the FBI’s hard work and dedication to hold companies accountable for their role in healthcare fraud and abuse,” said FBI Assistant Director Johnson. “The FBI will not stand by when there are allegations that a company operates a corporate wide scheme to increase their financial gain at the expense of the U.S. government. We appreciate those who come forward with allegations of criminal misconduct and recognize the importance of the public’s assistance in our work.”
The allegations resolved by the settlement were originally brought in eight lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The eight qui tam cases, which were filed in various districts and transferred to the U.S. District Court for the District of Columbia as part of a multi-district litigation presided over by the Honorable Reggie B. Walton, are captioned: United States ex rel. Brummer v. HMA, Inc., 3-09-cv-135 (CDL) (M.D. Ga.); United States ex rel. Williams v. HMA, Inc., 3:09-cv-130 (M.D. Ga.); United States ex rel. Plantz v. HMA, Inc., 13-CV-1212 (N.D. Ill.); United States ex rel. Miller v. HMA, Inc., 10-3007 (E.D. Pa.); United States ex rel. Mason & Folstad v. HMA, Inc., 3:10-CV-472-GCM (W.D.N.C.); United States ex rel. Nurkin v. HMA, Inc., 2:11-cv-14-FtM-29DNF (M.D. Fla.); United States ex rel. Jacqueline Meyer & Cowling v. HMA, Inc., 0:11-cv-01713-JFA (D.S.C.); and United States ex rel. Paul Meyer v. HMA, Inc., 11-62445 cv-Williams (S.D. Fla.).
The whistleblower in United States ex rel. Nurkin will receive approximately $15 million as a share of the recovery, and the whistleblowers in United States ex rel. Miller will receive approximately $12.4 million as their share of the recovery. The whistleblower shares to be awarded in the remaining cases have not yet been determined.
These matters were investigated by the Civil Division’s Commercial Litigation Branch; the Health Care Fraud Unit of the Criminal Division’s Fraud Section; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Middle District of Georgia, Northern District of Illinois, Western District of North Carolina, Eastern District of Pennsylvania and the District of South Carolina, the FBI Healthcare Fraud Unit Major Provider Response Team, HHS-OIG and Defense Health Agency Program Integrity. On behalf of the States, an investigative/settlement team with members from North Carolina, Massachusetts, Virginia, Washington, and Florida assisted with the investigation and resolution of these matters.
The government’s resolution of this matter illustrates the government’s emphasis on combating healthcare fraud and marks another achievement for the Health Care Fraud and Enforcement Action Team (HEAT) initiative, a partnership between the Department of Justice and the Department of Health and Human Services to focus efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Except for those facts admitted to in the guilty plea and in the Non-Prosecution Agreement, the claims resolved by the settlement are allegations only, and there has been no determination of liability.
If you believe you are a victim of this offense, please visit this website or call (888) 549-3945.
Hospital Chain Will Pay over $260 Million to Resolve False Billing and Kickback Allegations; One Subsidiary Agrees to Plead GuiltyRead the Press Release
WASHINGTON – Health Management Associates, LLC (HMA), formerly a U.S. hospital chain headquartered in Naples, Florida, will pay over $260 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States. The government alleged that HMA knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services, paid remuneration to physicians in return for patient referrals, and submitted inflated claims for emergency department facility fees.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Assistant Attorney General Joseph H. Hunt of the Justice Department’s Civil Division, U.S. Attorney Maria Chapa Lopez for the Middle District of Florida, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, U.S. Attorney Charles E. Peeler for the Middle District of Georgia, U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois, U.S. Attorney R. Andrew Murray for the Western District of North Carolina, U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania, U.S. Attorney Sherri Lydon for the District of South Carolina, Assistant Director Robert Johnson of FBI’s Criminal Investigative Division, and Acting Assistant Inspector General for Investigations Derrick L. Jackson for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
HMA was acquired by Community Health Systems Inc. (CHS), a major U.S. hospital chain, in January 2014, after the alleged conduct at HMA occurred. Since July 2014, HMA has been operating under a Corporate Integrity Agreement (CIA) between CHS and the HHS-OIG.
As part of the criminal resolution, HMA entered into a three-year Non-Prosecution Agreement (NPA) with the Criminal Division’s Fraud Section in connection with a corporate-driven scheme to defraud Federal health care programs by unlawfully pressuring and inducing physicians serving HMA hospitals to increase the number of emergency department patient admissions without regard to whether the admissions were medically necessary. The scheme involved HMA hospitals billing and obtaining reimbursement for higher-paying inpatient hospital care, as opposed to observation or outpatient care, from Federal health care programs, increasing HMA’s revenue. Under the terms of the NPA, HMA will pay a $35 million monetary penalty. Under the terms of the NPA, HMA and CHS, the current parent company, agreed to cooperate with the investigation, report allegations or evidence of violations of Federal health care offenses, and ensure that their compliance and ethics program satisfies the requirements of an amended and extended CIA between CHS and HHS-OIG.
In addition, an HMA subsidiary, Carlisle HMA, LLC, formerly doing business as Carlisle Regional Medical Center, has agreed to plead guilty to one count of conspiracy to commit health care fraud. The plea agreement remains subject to acceptance by the court. Up until 2017, Carlisle HMA, LLC owned and operated Carlisle Regional Medical Center, an acute care hospital located in Carlisle, Pennsylvania. Carlisle HMA, LLC was charged in a criminal information filed today in the District of Columbia with conspiracy to commit health care fraud.
According to admissions made in the resolution documents, HMA instituted a formal and aggressive plan to improperly increase overall emergency department inpatient admissions at all HMA hospitals, including at Carlisle Regional Medical Center. As part of the plan, HMA set mandatory company-wide admission rate benchmarks for patients presenting to HMA hospital emergency departments – a range of 15 to 20 percent for all patients presenting to the emergency department, depending on the HMA hospital, and 50 percent for patients 65 and older (i.e. Medicare beneficiaries) - solely to increase HMA revenue. HMA executives and HMA hospital administrators executed the scheme by pressuring, coercing and inducing physicians and medical directors to meet the mandatory admission rate benchmarks and admit patients who did not need impatient admission through a variety of means, including by threatening to fire physicians and medical directors if they did not increase the number of patients admitted.
“HMA pressured emergency room physicians, including through threats of termination, to increase the number of inpatient admissions from emergency departments—even when those admissions were medically unnecessary,” said Assistant Attorney General Benczkowski. “Hospital operators that improperly influence a physician’s medical decision-making in pursuit of profits do so at their own peril. Where we find such conduct, the Criminal Division’s Health Care Fraud Unit, together with our Civil Division and law enforcement colleagues, will aggressively prosecute those responsible to the fullest extent of the law.”
HMA also agreed to pay $216 million as part of a related civil settlement. The civil settlement resolves HMA’s liability for submitting false claims between 2008 and 2012 as part of its corporate-wide scheme to increase inpatient admissions of Medicare, Medicaid and the Department of Defense’s (DOD) TRICARE program beneficiaries over the age of 65. The government alleged that the inpatient admission of these beneficiaries was not medically necessary, and that the care needed by, and provided to, these beneficiaries should have been provided in a less costly outpatient or observation setting. HMA agreed to pay $62.5 million to resolve these allegations with $61,839,718 being paid to the United States and $706,084 being paid to participating States.
The civil settlement also resolves allegations that during the period from 2003 through 2011, two HMA hospitals in Florida, Charlotte Regional Medical Center and Peace River Medical Center, billed federal health care programs for services referred by physicians to whom HMA provided remuneration in return for patient referrals. To induce patient referrals, Charlotte Regional provided a local physician group with free office space and staff, as well as direct payments, which purportedly covered overhead and administrative costs incurred by the group for its management of a Charlotte Regional physician. HMA also provided another local physician with free rent and upgrades to his office space. HMA agreed to pay $93.5 million to resolve these civil allegations, with the United States receiving $87.96 million, and the State of Florida receiving $5.54 million.
Additional allegations that are resolved by the civil settlement are that between 2009 and 2012, two former HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center in Pennsylvania, billed federal health care programs for services referred by physicians with whom the facilities had improper financial relationships. These relationships stemmed from HMA’s excessive payments to (1) a large physician group in return for two businesses owned by the group and for services allegedly performed by the group, and (2) a local surgeon that exceeded the value of the services provided. The government alleged that these arrangements were structured in this manner to disguise payments intended to induce the referral of patients. HMA agreed to pay $55 million to the United States to resolve these civil allegations.
Finally, the civil settlement will also resolve claims that Crossgates Hospital, an HMA facility in Brandon, Mississippi, leased space to a local physician from Jan. 15, 2005 through Jan. 14, 2007, but required the physician to pay rent for only half of the space he was actually occupying, in return for patient referrals to Crossgates Hospital. HMA agreed to pay $425,000 to the United States to resolve these civil allegations.
Federal law, including the Anti-Kickback Statute and the Stark Law, prohibits hospitals from providing financial inducements to physicians for referrals. These provisions are designed to ensure that physician decision-making is not compromised by improper financial incentives.
“Billing for unnecessary hospital stays wastes federal dollars,” said Assistant Attorney General Hunt. “In addition, offering financial incentives to physicians in return for patient referrals undermines the integrity of our health care system. Patients deserve the unfettered, independent judgment of their health care professionals.”
“The payment of kickbacks in exchange for medical referrals undermines the integrity of our healthcare system,” said U.S. Attorney Chapa Lopez. “Today’s resolution should remind healthcare providers of their duty to comply with the law, and the heavy price to be paid for corrupt practices committed by their executives. Our Civil Division will continue to invest itself in the pursuit of health care providers who violate the law for personal gain.”
“Our office will continue to enforce prohibitions on improper financial relationships between health care providers and their referral sources, as these relationships can serve to corrupt physician judgment about a patient’s true health needs,” said U.S. Attorney Fajardo Orshan. “We will devote all necessary resources to ensure that those rendering medical care do so for the sole benefit of the patient and in compliance with the law.”
“By manipulating patient status, HMA increased Medicare costs and pocketed taxpayer funds to which it was not entitled,” said U.S. Attorney Peeler. “Our Medicare patients and our taxpayers deserve better, and I am proud that justice has been done. Nonetheless, we will continue to pursue those hospitals in our district that would seek to take advantage of the Medicare Program.”
“Government healthcare programs are vital to the welfare of our communities,” said U.S. Attorney Murray for the Western District of North Carolina, where two HMA hospitals were located. “We will aggressively pursue providers that fraudulently inflate charges to government programs and divert scarce resources from those in need into their own pockets.”
“Our resolution of this matter and the significant recovery we have obtained show once again that no matter how complex the scheme is, we will find it, stop it, and punish it,” said U.S. Attorney McSwain. “HMA covered up kickbacks for patient referrals with sham joint venture agreements, lease payments, and management agreements. These sorts of improper physician inducements are a form of ‘pay to play’ business practices that will not be tolerated. Healthcare institutions cannot pad their bottom line at the expense of the American taxpayers. And most importantly, this conduct must be rooted out because it gets in the way of providing top-notch patient care to American citizens.”
“It is critically important to all of us that the patients’ interest drive the physicians’ decisions on care,” said U.S. Attorney Lydon. “Unnecessary hospital admissions not only drive up costs but can cause damage to patients and cannot be tolerated.”
The government further alleged that from September 2009 through December 2011, certain HMA hospitals submitted claims to Medicare and Medicaid seeking reimbursement for falsely inflated emergency department facility charges. HMA agreed to pay $12 million to resolve these civil allegations, with $11.028 million being paid to the United States and $972,000 being paid to participating States.
“Compliance with government healthcare rules requires that patients only receive treatment they actually need,” said HHS-OIG Acting Assistant Inspector General for Investigations Jackson. “Then government programs must be billed just for those services. No more, no less. Let there be no doubt, we will continue to protect federal healthcare programs and beneficiaries by holding provider organizations fully accountable.”
“This settlement is a result of the FBI’s hard work and dedication to hold companies accountable for their role in healthcare fraud and abuse,” said FBI Assistant Director Johnson. “The FBI will not stand by when there are allegations that a company operates a corporate wide scheme to increase their financial gain at the expense of the U.S. government. We appreciate those who come forward with allegations of criminal misconduct and recognize the importance of the public’s assistance in our work.”
The allegations resolved by the settlement were originally brought in eight lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The eight qui tam cases, which were filed in various districts and transferred to the U.S. District Court for the District of Columbia as part of a multi-district litigation presided over by the Honorable Reggie B. Walton, are captioned: United States ex rel. Brummer v. HMA, Inc., 3-09-cv-135 (CDL) (M.D. Ga.); United States ex rel. Williams v. HMA, Inc., 3:09-cv-130 (M.D. Ga.); United States ex rel. Plantz v. HMA, Inc., 13-CV-1212 (N.D. Ill.); United States ex rel. Miller v. HMA, Inc., 10-3007 (E.D. Pa.); United States ex rel. Mason & Folstad v. HMA, Inc., 3:10-CV-472-GCM (W.D.N.C.); United States ex rel. Nurkin v. HMA, Inc., 2:11-cv-14-FtM-29DNF (M.D. Fla.); United States ex rel. Jacqueline Meyer & Cowling v. HMA, Inc., 0:11-cv-01713-JFA (D.S.C.); and United States ex rel. Paul Meyer v. HMA, Inc., 11-62445 cv-Williams (S.D. Fla.).
The whistleblower in United States ex rel. Nurkin will receive approximately $15 million as a share of the recovery, and the whistleblowers in United States ex rel. Miller will receive approximately $12.4 million as their share of the recovery. The whistleblower shares to be awarded in the remaining cases have not yet been determined.
These matters were investigated by the Civil Division’s Commercial Litigation Branch; the Health Care Fraud Unit of the Criminal Division’s Fraud Section; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Middle District of Georgia, Northern District of Illinois, Western District of North Carolina, Eastern District of Pennsylvania and the District of South Carolina, the FBI Healthcare Fraud Unit Major Provider Response Team, HHS-OIG and Defense Health Agency Program Integrity. On behalf of the States, an investigative/settlement team with members from North Carolina, Massachusetts, Virginia, Washington, and Florida assisted with the investigation and resolution of these matters.
The government’s resolution of this matter illustrates the government’s emphasis on combating healthcare fraud and marks another achievement for the Health Care Fraud and Enforcement Action Team (HEAT) initiative, a partnership between the Department of Justice and the Department of Health and Human Services to focus efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Except for those facts admitted to in the guilty plea and in the Non-Prosecution Agreement, the claims resolved by the settlement are allegations only, and there has been no determination of liability.
If you believe you are a victim of this offense, please call (888) 549-3945.
Harrisburg Man Sentenced to 20 Years’ Imprisonment for Possessing A Firearm in Furtherance of Drug TraffickingRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jamar McMillan, age 34, of Harrisburg, Pennsylvania, was sentenced on September 21, 2018, to 20 years’ imprisonment and four years supervised release by Chief United States District Court Judge Christopher C. Conner for possession with the intent to distribute heroin, PCP, and synthetic marijuana, possession of a stolen firearm as a previously convicted felon and in furtherance of a drug trafficking crime.
According to United States Attorney David J. Freed, McMillan was convicted by a jury in March 2018, following a three-day trial before Chief Judge Conner. The case arose as a result of an arrest of McMillan in August 2015. During his arrest, officers found heroin, PCP and synthetic marijuana on his person, and located a craftsman soft pouch on the driver’s seat of his vehicle, containing a stolen loaded .45 Heckler and Koch pistol, a balaclava face mask and a phone. The face mask and firearm were processed by the PA State Police laboratory and McMillan’s DNA was found on the items.
The case was investigated by the Harrisburg Police Department Vice Unit and the Federal Bureau of Investigation. Assistant U.S. Attorney Chelsea Schinnour prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
This case was also brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
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Grandview Man Sentenced to 18 Years for Illegal FirearmRead the Press Release
KANSAS CITY, Mo. – A Grandview, Mo., man was sentenced in federal court today for illegally possessing a firearm.
Frank Vanoy, 37, was sentenced by U.S. District Judge Beth Phillips to 18 years in federal prison without parole. Vanoy was sentenced as an armed career offender due to his prior felony convictions.
On Feb. 3, 2018, Vanoy was convicted at trial of being a felon in possession of a firearm.
Vanoy was in possession of a stolen Glock .45-caliber pistol, loaded and equipped with an extended magazine, on Dec. 4, 2015, when he was arrested for violating his supervised release in an unrelated federal case. Law enforcement officers confronted Vanoy in the front yard of his parents’ residence. Vanoy dropped the firearm and a holster and fled to the front porch, where he immediately surrendered. Officers recovered the firearm and holster, which also contained a spare magazine, in the area where Vanoy had been standing.
Under federal law, it is illegal for anyone convicted of a felony to be in possession of any firearm or ammunition. Vanoy has a significant criminal history, including prior federal convictions for being a felon in possession of a firearm and conspiracy to distribute a controlled substance, and two Virginia state convictions for possession with intent to distribute a controlled substance and failure to appear in court. According to court documents, every time Vanoy has been on probation or supervised release for a felony case, he has violated his supervision by committing new state and federal felony offenses.
This case was prosecuted by Assistant U.S. Attorneys Adam Caine and Ashleigh Ragner. It was investigated by the FBI’s Violent Crimes Fugitive Task Force, which consists of the FBI, the U.S. Marshal’s Service, the Kansas City, Mo., Police Department, the Kansas City, Kan., Police Department, the Johnson County, Kan., Sheriff's Department, and the Independence, Mo., Police Department.
Four Inmates Charged with First-Degree Murder in Beating Death of Fellow Inmate at Federal Prison in VictorvilleRead the Press Release
SANTA ANA, California – An indictment unsealed today charges four prison inmates with first-degree murder in the beating death of another inmate at the Federal Correctional Institution II in Victorville, an offense that carries a potential death sentence.
In addition to the premeditated murder charge, all four defendants are charged with conspiracy to commit murder.
The indictment unsealed today was returned by a federal grand jury on August 29. The four defendants are accused in the October 1, 2013 killing of a 38-year-old inmate identified in the indictment as “J.S.,” who was repeatedly hit and kicked, dying as a result of blunt force head trauma.
The defendants charged in the indictment are:
- Aurelio Patino, also known as “Augie,” 35, most recently of Riverside, who at the time of the alleged murder was serving a 16-month sentence for being a felon in possession of a firearm and ammunition, and who is currently serving a 100-month sentence in a California state prison;
- Adilson Reyes, aka “Shanky,” 37, most recently of Los Angeles, who is serving a 135-month sentence in a cocaine distribution case;
- Christopher Ruiz, aka “Sneaky,” 44, most recently of San Diego, who is serving a 10-year sentence after being convicted on racketeering and methamphetamine charges; and
- Jose Villegas, aka “Torch,” 37, most recently of Los Angeles, who is serving a 15-year sentence in a methamphetamine case.
All four defendants are currently being housed in different prisons and in the near future will be brought to the Central District of California for arraignments in United States District Court.
According to the indictment, J.S. was escorted to the recreation yard in the prison, where he was attacked. Patino, Ruiz and Villegas allegedly used their hands and feet to strike J.S. When Reyes was informed that J.S. was no longer breathing, he instructed the other three defendants to continue beating J.S., the indictment alleges.
The indictment contains allegations that all four defendants participated in the attack, intentionally killed J.S., and “[c]omitted the offense in an especially heinous, cruel, or depraved manner in that it involved torture or serious physical abuse to the victim.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If they were to be convicted of the first-degree murder charge in the indictment, each defendant would face a mandatory sentence of life without parole in federal prison or, potentially, the death penalty.
This case was investigated by the Federal Bureau of Investigation.
Fort Polk soldier sentenced to more than 11 years for illegally manufacturing, using a chemical weaponRead the Press Release
LAFAYETTE, La. – United States Attorney David C. Joseph and Assistant Attorney General for National Security John C. Demers announced that a Fort Polk soldier was sentenced Monday to 135 months in prison for manufacturing and detonating a chemical weapon in the Kisatchie National Forest adjacent to the Fort Polk Army installation.
Ryan Keith Taylor, 24, of New Llano, Louisiana, was sentenced by U.S. District Judge Jay C. Zainey for producing, possessing, and using a chemical weapon in violation of federal law. He was also sentenced to five years of supervised release. According to the June 11, 2018 guilty plea, Taylor detonated an explosive device containing chlorine gas on the morning of April 12, 2017 in the Kisatchie National Forest near Fort Polk. Three U.S. Army soldiers who were conducting a training exercise nearby heard the explosions and found Taylor standing near his vehicle filming the explosion with his cell phone. They then questioned Taylor and reported the incident to military police.
Upon arriving at the site of the explosion, Fort Polk military police investigators examined the scene and began collecting samples at the blast site. One investigator filled a plastic bag with a rock coated in an unknown substance. The bag immediately popped, and the investigator’s plastic gloves and boots began to melt. He also began to experience difficulty breathing and his skin started burning. Law enforcement later detained Taylor at Fort Polk and searched his vehicle. During the search, investigators found remnants of the explosive device and chlorine residue, which one investigator inhaled and touched, causing him to be hospitalized. During the course of the investigation, law enforcement agents found bomb-making notes, materials and chemical residue in Taylor’s vehicle, apartment and storage building. The two victims who inhaled the chlorine gas were treated multiple times for their injuries and effectively ended their military careers.
“Supporting and protecting our soldiers is of utmost importance to my office,” Joseph stated. “Those serving our country put their lives on the line daily to protect us. They should not be put in danger needlessly. The chemical weapon the defendant created in this case is banned under international and national laws because of its terrible effects on the human body. I want to thank our U.S. military, federal and local law enforcement for their combined effort investigating this case and bringing this defendant to justice.”
“Taylor produced and detonated a chemical bomb near Fort Polk, causing injury to his fellow soldiers who responded to and investigated the incident.” said Assistant Attorney General Demers. “Today’s sentence holds Taylor accountable for his crime and makes clear that we will not tolerate such conduct. I want to thank the agents and prosecutors who are responsible for this result and our military and local law enforcement partners for their significant contributions to this investigation.”
The U.S. Army Directorate of Emergency Services, Military Police, Criminal Investigation Command, and Military Intelligence/Army Counterintelligence Gulf Coast at Fort Polk, Louisiana; the FBI and the FBI’s Joint Terrorism Task Force; the Louisiana State Police; the Vernon Parish Sheriff’s Office; and local police and fire agencies in Vernon Parish investigated the case.
U.S. Attorney David C. Joseph, Assistant U.S. Attorney Daniel J. McCoy, Special Assistant U.S. Attorney Dennis E. Robinson, and Trial Attorney David Cora of the National Security Division’s Counterterrorism section prosecuted the case.
Former Sioux City Council Member Charged with Environmental CrimesRead the Press Release
Aaron Rochester, 44, from Sioux City, Iowa, has been charged with one count of unlawful storage of hazardous waste and one charge of transportation of hazardous waste. The charges are contained in an Indictment filed on July 25, 2018, in United States District Court in Sioux City.
The Indictment alleges that, beginning on or about June 2015 through about July 2018, Rochester, as owner and operator of Recycletronics, knowingly and unlawfully, stored and transported hazardous waste, namely CRTs (cathode ray tubes) and leaded glass from televisions and computers at various facilities in and around Sioux City Iowa.
If convicted, Rochester faces a possible maximum sentence of five years’ imprisonment, a maximum fine of up to $50,000 for each day of the violation, and three years of supervised release following any imprisonment.
Rochester appeared today, September 25, 2018, in federal court in Sioux City and was released on bond with terms of supervision with US Probation. Rochester’s next appearance for trial is scheduled for November 5, 2018. As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the United States Environmental Protection Agency (EPA). EPA Special Agent in Charge Jeffrey Martinez stated, “EPA’s Criminal Investigation Division will continue to serve our communities by aggressively investigating and seeking prosecution of those whose conduct violates laws governing the storage of hazardous waste.”
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-4073. Follow us on Twitter @USAO_NDIA.
Former Sergeant Sentenced to Prison for Violating Civil Rights of DetaineeRead the Press Release
David Prejean, a former Sergeant in the K-9 Unit of the Iberia Parish Sheriff’s Office (IPSO), was sentenced yesterday to serve 30 months in prison and one year supervised release on his guilty plea to violating the civil rights of a detainee, announced John Gore, the Acting Assistant Attorney General of the Justice Department’s Civil Rights Division, David C. Joseph, the United States Attorney for the Western District of Louisiana, and FBI New Orleans Division Special Agent in Charge Eric J. Rommal. Prejean previously admitted, during a guilty plea hearing, that he acted without legal justification on Dec. 6, 2012, when he commanded his K-9 to bite the detainee, and then struck the detainee, resulting in bodily injury.
According to statements made in court and filings made in connection with the guilty plea, Prejean was a K-9 Sergeant on the IMPACT Unit, a specialized unit at IPSO, when he was called to the Iberia Parish Jail on Dec. 6, 2012, to assist with a shakedown. During the course of the shakedown, an inmate turned to look at Prejean after being told not to, at which point Prejean threw the inmate to the ground and then commanded his dog to bite him. Prejean also struck the inmate several times. Despite the fact that the inmate had complied with Prejean’s commands and did not pose a threat to anyone on the rec yard, Prejean allowed the dog to bite the inmate for several seconds before pulling the K9 away. Prejean’s unlawful use of force resulted in injury to the inmate. Following the assault, Prejean wrote false report designed to cover up his unjustified use of force.
“The United States Constitution protects all individuals, including those who are incarcerated,” said Acting Assistant Attorney General John Gore. “The Justice Department will uphold the rule of law and aggressively prosecute any violation of an inmate’s civil rights.”
“Law enforcement officers face danger in the field every day protecting the rights and safety of those in our communities,” said U.S. Attorney Joseph. “It is necessary that they follow the laws they are sworn to protect. Our district takes violations of the law seriously and will hold those accountable those who ignore those laws, especially those who tasked with their enforcement.”
“FBI New Orleans vigorously investigates all credible allegations of civil rights violations, including those who are incarcerated,” FBI New Orleans Division Special Agent in Charge Eric J. Rommal stated. “Violations of one’s civil rights will not be tolerated.”
This case was investigated by the Lafayette Resident Agency of the FBI, and was prosecuted by Assistant United States Attorney Mary Mudrick of the Western District of Louisiana and Trial Attorney Tona Boyd of the Civil Rights Division.
Former New Iberia sergeant sentenced to 30 months in prison for assault of detaineeRead the Press Release
LAFAYETTE, La. – David Prejean, a former Sergeant in the K-9 Unit of the Iberia Parish Sheriff’s Office (IPSO), was sentenced Monday to serve 30 months in prison and one year supervised release on his guilty plea to violating the civil rights of a detainee, announced David C. Joseph, the U.S. Attorney for the Western District of Louisiana; John Gore, the Acting Assistant Attorney General of the Justice Department’s Civil Rights Division; and FBI New Orleans Division Special Agent in Charge Eric J. Rommal. Prejean previously admitted, during a guilty plea hearing, that he acted without legal justification on Dec. 6, 2012, when he commanded his K-9 to bite the detainee, and then struck the detainee, resulting in bodily injury.
According to statements made in court and filings made in connection with the guilty plea, Prejean was a K-9 Sergeant on the IMPACT Unit, a specialized unit at IPSO, when he was called to the Iberia Parish Jail on Dec. 6, 2012, to assist with a shakedown. During the course of the shakedown, an inmate turned to look at Prejean after being told not to, at which point Prejean threw the inmate to the ground and then commanded his dog to bite him. Prejean also struck the inmate several times. Despite the fact that the inmate had complied with Prejean’s commands and did not pose a threat to anyone on the rec yard, Prejean allowed the dog to bite the inmate for several seconds before pulling the K9 away. Prejean’s unlawful use of force resulted in injury to the inmate. Following the assault, Prejean wrote false report designed to cover up his unjustified use of force.
“Law enforcement officers face danger in the field every day protecting the rights and safety of those in our communities,” said Joseph. “It is necessary that they follow the laws they are sworn to protect. Our district takes violations of the law seriously and will hold those accountable those who ignore those laws, especially those who tasked with their enforcement.”
“The United States Constitution protects all individuals, including those who are incarcerated,” said Gore. “The Justice Department will uphold the rule of law and aggressively prosecute any violation of an inmate’s civil rights.”
“FBI New Orleans vigorously investigates all credible allegations of civil rights violations, including those who are incarcerated,” Rommal stated. “Violations of one’s civil rights will not be tolerated.”
This case was investigated by the Lafayette Resident Agency of the FBI, and was prosecuted by Assistant U.S. Attorney Mary Mudrick of the Western District of Louisiana and Trial Attorney Tona Boyd of the Civil Rights Division.
Former Naples-Based Hospital Chain Will Pay over $260 Million to ResolveRead the Press Release
Fort Myers, FL – Health Management Associates, LLC (HMA), formerly a major U.S. hospital chain headquartered in Naples, Florida, will pay over $260 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States, the Justice Department announced today. The government alleged that HMA knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services; inflated claims for emergency department facility fees; and operated hospitals, including two in Port Charlotte, which paid illegal remuneration to physicians in return for patient referrals.
Assistant Attorney General Brian A. Benczkowski, head of the Justice Department’s Criminal Division; Assistant Attorney General Joseph H. Hunt, head of the Justice Department’s Civil Division; U.S. Attorney Maria Chapa Lopez of the Middle District of Florida; U.S. Attorney Charles E. Peeler for the Middle District of Georgia; U.S. Attorney John R. Lausch, Jr. for the Northern District of Illinois; U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania; U.S. Attorney Sherri Lydon for the District of South Carolina, Assistant Director Robert Johnson of FBI’s Criminal Investigative Division, and Acting Assistant Inspector General for Investigations Derrick L. Jackson for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Federal laws, including the Anti-Kickback Statute and the Stark Law, prohibit hospitals from providing financial inducements to physicians for referrals. These provisions are designed to ensure that physician decision-making is not compromised by improper financial incentives.
“Billing for unnecessary hospital stays wastes federal dollars,” said AAG Hunt. “In addition, offering financial incentives to physicians in return for patient referrals undermines the integrity of our health care system. Patients deserve the unfettered, independent judgment of their health care professionals.”
The civil settlement resolves, among other allegations, that during the period from 2003 through 2011, two HMA hospitals in Florida, the Charlotte Regional Medical Center and the Peace River Medical Center, billed federal health care programs for services referred by physicians to whom HMA provided remuneration in return for patient referrals. To induce patient referrals, Charlotte Regional provided a local physicians’ group with free office space and staff, as well as direct payments, which purportedly covered overhead and administrative costs incurred by the group for its management of a Charlotte Regional physician. HMA also provided another local physician with free rent and upgrades to his office space.
The civil allegations were initially made as part of a qui tam lawsuit captioned United States ex rel. Nurkin v. HMA, Inc., 2:11-cv-14-FtM-29DNF (M.D. Fla.). In January 2014, after the conduct alleged by the government had occurred, HMA was acquired by another hospital company.
HMA has agreed to pay $93.5 million to resolve these civil allegations, with the United States receiving $87.96 million, and the State of Florida receiving $5.54 million. The whistleblower in United States ex rel. Nurkin will receive approximately $15 million as his share of the recovery in that case.
“The payment of kickbacks in exchange for medical referrals undermines the integrity of our healthcare system,” said United States Attorney for the Middle District of Florida Maria Chapa Lopez. “Today’s resolution should remind healthcare providers of their duty to comply with the law, and the heavy price to be paid for corrupt practices committed by their executives. Our Civil Division will continue to invest itself in the pursuit of health care providers who violate the law for personal gain.”
The Nurkin investigation was investigated by the Civil Division’s Commercial Litigation Branch; the Criminal Division’s Fraud Section; the U.S. Department of Health and Human Services Office of Inspector General; the FBI Healthcare Fraud Unit Major Provider Response Team; and by the U.S. Attorneys’ Offices for the Middle District of Florida. Assistant U.S. Attorney Kyle Cohen handled the Nurkin case locally with assistance from Assistant U.S. Attorneys Jay Trezevant and David Lazarus.
“Compliance with government healthcare rules requires that patients only receive treatment they actually need,” said HHS-OIG Acting Assistant Inspector General for Investigations Jackson. “Then government programs must be billed just for those services. No more, no less. Let there be no doubt, we will continue to protect federal healthcare programs and beneficiaries by holding provider organizations fully accountable.”
“This settlement is a result of the FBI’s hard work and dedication to hold companies accountable for their role in healthcare fraud and abuse,” said FBI Assistant Director Johnson. “The FBI will not stand by when there are allegations that a company operates a corporate wide scheme to increase their financial gain at the expense of the U.S. government. We appreciate those who come forward with allegations of criminal misconduct and recognize the importance of the public’s assistance in our work.”
HMA was acquired by Community Health Systems Inc. (CHS), a major U.S. hospital chain, in January 2014, after the alleged conduct at HMA occurred. Since July 2014, HMA has been operating under a Corporate Integrity Agreement (CIA) between CHS and the HHS-OIG.
The government’s resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The civil claims resolved by the settlement are allegations only, and there has been no determination of liability.
Former NSA Employee Sentenced to Prison for Willful Retention of Classified National Defense InformationRead the Press Release
Nghia Hoang Pho, 68, of Ellicott City, Maryland, and a naturalized U.S. citizen originally of Vietnam, was sentenced today to 66 months in prison, to be followed by three years of supervised release, for willful retention of classified national defense information. According to court documents, Pho removed massive troves of highly classified national defense information without authorization and kept it at his home.
The sentence was announced by Assistant Attorney General for National Security John C. Demers, U.S. Attorney for the District of Maryland Robert K. Hur, and Special Agent in Charge Gordon B. Johnson of the FBI’s Baltimore Field Office. U.S. District Judge George L. Russell, III issued the sentence.
“Pho’s intentional, reckless and illegal retention of highly classified information over the course of almost five years placed at risk our intelligence community’s capabilities and methods, rendering some of them unusable,” said Assistant Attorney General Demers. “Today’s sentence reaffirms the expectations that the government places on those who have sworn to safeguard our nation’s secrets. I would like to thank the agents, analysts and prosecutors whose hard work brought this result.”
“Removing and retaining such highly classified material displays a total disregard of Pho’s oath and promise to protect our nation’s national security,” said U.S. Attorney Hur. “As a result of his actions, Pho compromised some of our country’s most closely held types of intelligence, and forced NSA to abandon important initiatives to protect itself and its operational capabilities, at great economic and operational cost.”
“The privilege of working for the U.S. Intelligence Community requires strict adherence to laws governing the lawful secrecy of its work,” said Special Agent in Charge Johnson. “We cannot have a functioning Intelligence Community without the protection of sources and methods, and taking classified information and placing it in a vulnerable setting has profound and often disastrous consequences. This case is a clarion call to all security clearance holders to follow the law and policy regarding classified information storage. The FBI will leave no stone unturned to investigate those who compromise or mishandle classified information.”
According to his plea agreement, beginning in April 2006, Pho was employed as a developer in Tailored Access Operations (TAO) at the National Security Agency (NSA). NSA is a component of the U.S. intelligence community and the U.S. Department of Defense (DoD). The NSA's TAO involved operations and intelligence collection from foreign automated information systems or networks, as well as actions taken to prevent, detect and respond to unauthorized activity within DoD information systems and computer networks, for the United States and its allies.
Pho held various security clearances in connection with his employment, including Top Secret and Top Secret // Sensitive Compartmented Information (SCI). Pho had access to national defense and classified information and worked on highly classified, specialized projects. Over his years of holding a security clearance, Pho received training regarding the proper handling, marking, transportation and storage of classified information. Pho was also told that unauthorized removal of classified materials, and the transportation and storage of those materials in unauthorized locations, risked disclosure of the materials and could endanger the national security of the United States. Pho signed numerous non-disclosure agreements demonstrating that he understood the trust that the United States places in individuals who receive a security clearance.
According to the plea agreement, beginning in 2010 and continuing through March 2015, Pho removed and retained U.S. government property, including documents and writings that contained national defense information classified as Top Secret and SCI. This material was in both hard copy and digital form, and was kept in a number of locations in Pho’s residence in Maryland. Pho knew that he was not authorized to remove the material or store it at his home.
Assistant Attorney General Demers and U.S. Attorney Hur commended the FBI and the NSA for their work in the investigation. This prosecution was handled by the District of Maryland, and the National Security Division’s Counterintelligence and Export Control Section.
Former NSA Employee Sentenced to over 5 Years in Federal Prison for Willful Retention of Classified National Defense InformationRead the Press Release
Baltimore, Maryland – United States District Judge George L. Russell, III sentenced Nghia Hoang Pho, age 68, of Ellicott City, Maryland, today to 66 months in prison, followed by three years of supervised release, for willful retention of classified national defense information. According to court documents, Pho removed massive troves of highly classified national defense information without authorization, which he kept at his residence.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Attorney General for National Security John C. Demers; and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
“Removing and retaining such highly classified material displays a total disregard of Pho’s oath and promise to protect our nation’s national security,” said United States Attorney Robert K. Hur. “As a result of his actions, Pho compromised some of our country’s most closely held types of intelligence, and forced NSA to abandon important initiatives to protect itself and its operational capabilities, at great economic and operational cost.”
“Pho’s intentional, reckless, and illegal retention of highly classified information over the course of almost five years placed at risk our intelligence community’s capabilities and methods, rendering some of them unusable,” said Assistant Attorney General Demers. “Today’s sentence reaffirms the expectations that the government places on those who have sworn to safeguard our nation’s secrets. I would like to thank the agents, analysts and prosecutors whose hard work brought this result.”
“The privilege of working for the U.S. Intelligence Community requires strict adherence to laws governing the lawful secrecy of its work," said FBI Baltimore Special Agent in Charge Gordon B. Johnson. "We cannot have a functioning Intelligence Community without the protection of sources and methods, and taking classified information and placing it in a vulnerable setting has profound and often disastrous consequences. This case is a clarion call to all security clearance holders to follow the law and policy regarding classified information storage. The FBI will leave no stone unturned to investigate those who compromise or mishandle classified information.”
According to his plea agreement, beginning in April 2006, Pho was employed as a developer in Tailored Access Operations (TAO) at the National Security Agency (NSA). NSA is a component of the U.S. intelligence community and the U.S. Department of Defense (DoD). The NSA's TAO involved operations and intelligence collection from foreign automated information systems or networks, as well as actions taken to prevent, detect, and respond to unauthorized activity within DoD information systems and computer networks, for the United States and its allies.
Pho held various security clearances in connection with his employment, including Top Secret and Top Secret//Sensitive Compartmented Information (SCI). Pho had access to national defense and classified information and worked on highly classified, specialized projects. Over his years of holding a security clearance, Pho received training regarding the proper handling, marking, transportation, and storage of classified information. Pho was also told that unauthorized removal of classified materials, and the transportation and storage of those materials in unauthorized locations, risked disclosure of the materials and could endanger the national security of the United States. Pho signed numerous non-disclosure agreements demonstrating that he understood the trust that the United States places in individuals who receive a security clearance.
According to the plea agreement, beginning in 2010 and continuing through March 2015, Pho removed and retained U.S. government property, including documents and writings that contained national defense information classified as Top Secret and Sensitive Compartmented Information. This material was in both hard copy and digital form, and was kept in a number of locations in Pho’s residence in Maryland. Pho knew that he was not authorized to remove the material or store it at his home.
United States Attorney Robert K. Hur and Assistant Attorney General John C. Demers commended the FBI and the NSA for their work in the investigation. Mr. Hur thanked his office’s national security prosecutors and attorneys from the Justice Department’s National Security Division, Counterintelligence and Export Control Section, all of whom are handling the prosecution.
Former Chief Financial Officer of Bankrate Inc. Sentenced to 10 Years in Prison for Orchestrating a Complex Accounting and Securities Fraud SchemeRead the Press Release
The former chief financial officer of Bankrate Inc., a publicly traded financial services and marketing company formerly headquartered in North Palm Beach, Florida, was sentenced today to 10 years in prison for orchestrating an accounting and securities fraud scheme that caused more than $25 million in shareholder losses.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida and Inspector in Charge Delany DeLeon-Colon of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.
Edward J. DiMaria, 53, of Fairfield County, Connecticut, was sentenced by Chief U.S. District Judge K. Michael Moore of the Southern District of Florida, who also imposed three years of supervised release and ordered DiMaria to pay restitution in the amount of $21,234,214. On June 28, DiMaria pleaded guilty to one count of conspiracy to making false statements to a public company’s accountants, falsifying a public company’s books, records and accounts, and securities fraud; and one count of making materially false statements to the Securities and Exchange Commission (SEC).
“While serving as Bankrate’s CFO, Edward DiMaria blatantly manipulated the company’s publicly reported financial statements by repeatedly lying and directing others to lie to auditors, regulators, and shareholders,” said Assistant Attorney General Benczkowski. “The significant sentence handed down today underscores the serious nature of corporate fraud and the damage it causes to shareholders and to the public’s trust in our financial markets. The sentence also demonstrates the Department’s commitment to prosecuting corporate misconduct to the fullest extent of the law.”
“The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes in order to protect investors as well as the integrity of the financial marketplace from fraudulent activities by trusted insiders who abuse their positions,” said Inspector in Charge Delany DeLeon-Colon. “Anyone who engages in this type of financial fraud scheme should know they will be found and they will be held accountable.”
As part of his guilty plea, DiMaria admitted that between 2010 and 2014 he directed and conspired to commit a complex scheme to artificially inflate Bankrate’s earnings through so-called “cookie jar” or “cushion” accounting, whereby millions of dollars in unsupported expense accruals were purposefully left on Bankrate’s books and then selectively reversed in later quarters to boost earnings. In addition, DiMaria admitted that he conspired with other Bankrate employees to misrepresent certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics. DiMaria made materially false statements to Bankrate’s independent auditors to conceal the improper accounting entries, and he caused Bankrate’s financial statements filed with the SEC to be materially misstated, he admitted.
Hyunjin Lerner, Bankrate’s former vice president of finance, previously pleaded guilty for his role in the conspiracy. Lerner was sentenced by Judge Moore earlier this year to serve 60 months in prison.
The U.S. Postal Inspection Service’s National Headquarters Fraud Team investigated the case. Assistant Chief Henry Van Dyck and Trial Attorneys Emily Scruggs and Jason Covert of the Criminal Division’s Fraud Section are prosecuting the case, with assistance from the U.S Attorney’s Office for the Southern District of Florida. The SEC also provided assistance in this matter.
Potential victims of the scheme can find information about their rights under relevant law at the following website: www.justice.gov/criminal-vns/case/edward-j-dimaria.
Former Chief Financial Officer of Bankrate Inc. Sentenced to 10 Years in Prison for Orchestrating a Complex Accounting and Securities Fraud SchemeRead the Press Release
WASHINGTON – The former chief financial officer of Bankrate Inc., a publicly traded financial services and marketing company formerly headquartered in North Palm Beach, Florida, was sentenced today to 10 years in prison for orchestrating an accounting and securities fraud scheme that caused more than $25 million in shareholder losses.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida and Inspector in Charge Delany DeLeon-Colon of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.
Edward J. DiMaria, 53, of Fairfield County, Connecticut, was sentenced by Chief U.S. District Judge K. Michael Moore of the Southern District of Florida, who also imposed three years of supervised release and ordered DiMaria to pay restitution in the amount of $21,234,214. On June 28, DiMaria pleaded guilty to one count of conspiracy to making false statements to a public company’s accountants, falsifying a public company’s books, records and accounts, and securities fraud; and one count of making materially false statements to the Securities and Exchange Commission (SEC).
“While serving as Bankrate’s CFO, Edward DiMaria blatantly manipulated the company’s publicly reported financial statements by repeatedly lying and directing others to lie to auditors, regulators, and shareholders,” said Assistant Attorney General Benczkowski. “The significant sentence handed down today underscores the serious nature of corporate fraud and the damage it causes to shareholders and to the public’s trust in our financial markets. The sentence also demonstrates the Department’s commitment to prosecuting corporate misconduct to the fullest extent of the law.”
“The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes in order to protect investors as well as the integrity of the financial marketplace from fraudulent activities by trusted insiders who abuse their positions,” said Inspector in Charge Delany DeLeon-Colon. “Anyone who engages in this type of financial fraud scheme should know they will be found and they will be held accountable.”
As part of his guilty plea, DiMaria admitted that between 2010 and 2014 he directed and conspired to commit a complex scheme to artificially inflate Bankrate’s earnings through so-called “cookie jar” or “cushion” accounting, whereby millions of dollars in unsupported expense accruals were purposefully left on Bankrate’s books and then selectively reversed in later quarters to boost earnings. In addition, DiMaria admitted that he conspired with other Bankrate employees to misrepresent certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics. DiMaria made materially false statements to Bankrate’s independent auditors to conceal the improper accounting entries, and he caused Bankrate’s financial statements filed with the SEC to be materially misstated, he admitted.
Hyunjin Lerner, Bankrate’s former vice president of finance, previously pleaded guilty for his role in the conspiracy. Lerner was sentenced by Judge Moore earlier this year to serve 60 months in prison.
The U.S. Postal Inspection Service’s National Headquarters Fraud Team investigated the case. Assistant Chief Henry Van Dyck and Trial Attorneys Emily Scruggs and Jason Covert of the Criminal Division’s Fraud Section are prosecuting the case, with assistance from the U.S Attorney’s Office for the Southern District of Florida. The SEC also provided assistance in this matter.
Potential victims of the scheme can find information about their rights under relevant law at the following website: www.justice.gov/criminal-vns/case/edward-j-dimaria.
Federal Judge Trebles Damages and Imposes Civil Penalties Against Cape Girardeau Surgeon and His Fiancee in the Amount of $5,495,931Read the Press Release
St. Louis, MO – A civil judgment in the amount of $5,495,931 was entered today in favor of the United States against Dr. Sonjay Fonn and Ms. Deborah Seeger of Cape Girardeau, Missouri, and their professional corporations DS Medical and Midwest Neurosurgeons. Previously, in November 2017, a federal jury sitting in St. Louis, Missouri found that the couple conspired to violate the civil False Claims Act and also violated the False Claims Act and the Medicare Anti-Kickback statute.
The Government’s complaint and evidence at trial established that Dr. Fonn was a neurosurgeon during 2009-12. Dr. Fonn used spinal implants during the spinal fusion surgeries that he performed. Dr. Fonn practiced through his professional corporation Midwest Neurosurgeons. Ms. Deborah Seeger, who has been Dr. Fonn’s fiancé since 2008, started a spinal implant distributorship business called DS Medical in November 2008. Dr. Fonn then used DS Medical as his spinal implant distributor for most of the spinal implants he chose to implant during his surgeries from 2009-12. Many of Dr. Fonn’s patients had insurance coverage through Medicare and Medicaid, which are federal programs. The trial involved federal program payments for 228 spinal surgeries involving Medicaid and Medicaid patients.
Once DS Medical began operating, Ms. Seeger typically received 50% commissions on the implants Dr. Fonn used during his surgeries, meaning Dr. Fonn’s treatment choices directly impacted his fiance’s distributorship income. The evidence at trial established that when Dr. Fonn used expensive implants, or multiple implants during surgeries, her commission income increased. After Ms. Seeger received commission income through DS Medical, the evidence at trial established that Ms. Seeger spent some of that income to benefit Dr. Fonn through home improvements, a Sea Lion yacht, and many other purchases and expenditures. The United States alleged that that this conduct by defendants and their corporations violated the Anti-Kickback statute, a federal law that prohibits health care providers from making patient referrals in exchange for any direct or indirect benefits. Further, the United States alleged that this conduct violated the civil False Claims Act, in that defendants submitted or caused to be submitted claims for the surgeries and professional surgeries associated with these implants.
Through their verdicts, the federal jury agreed with the Government on 2/3 of the counts brought in the civil complaint from the case. The jury had made a number of findings in its verdict, including a $1,652,557 recovery to the Medicare and Medicaid program under the Government’s conspiracy claim, and a specific finding that each defendant conspired to submit 228 separate false claims to Medicare and Medicaid.
Typically, under federal law, damages are trebled under the False Claims Act. Courts also impose a statutory penalty of $5,500 to $11,000 for each false claim. Accordingly, the total amount of defendants’ civil liability was determined by the Court through the judgment issued today after the parties filed briefs, using the factual findings from the jury’s verdict.
Today’s judgment resolves a lawsuit that was filed by several Cape Girardeau, Missouri doctors and health care providers under the qui tam or “whistleblower” provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The case is captioned United States ex rel. Cairns et al. v. DS Medical et al., Case No. 1:12-CV-0004 AGF. The United States appreciates the relators’ interest in program integrity, and their assistance with this successful outcome. Defendants could further be liable for additional sums beyond the judgment issued today, including the costs of the lawsuit and attorneys’ fees of the relators.
The case was jointly handled by the U.S. Attorney’s Office and the Civil Frauds section of the Commercial Litigation Branch of the U.S. Department of Justice in Washington, D.C. The case was investigated by the Federal Bureau of Investigation, the Office of Inspector General for the U.S. Department of Health and Human Services, and the Medicaid Fraud Control Unit of the Missouri Attorney General’s Office.
Fairfield County Cardiologist Sentenced to Prison for Insider TradingRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that EDWARD J. KOSINSKI, MD, 70, of Weston, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to six months of imprisonment, two years of supervised release and a $500,000 fine for insider trading.
On November 28, 2017, a jury found KOSINSKI guilty of two counts of securities fraud-insider trading. According to the evidence presented during the trial, on January 29, 2014, KOSINSKI, a cardiologist, entered into a Clinical Study and Research Agreement with an authorized agent of Regado Biosciences, Inc., formerly a Delaware corporation whose common stock traded on the NASDAQ under the ticker symbol “RGDO.” KOSINSKI, as a principal investigator for Regado’s clinical trial, was required to maintain in strict confidence all confidential information he received from Regado or its agent during the course of the clinical trial. In May 2014, KOSINSKI owned 40,000 shares of Regado common stock.
On June 29, 2014, KOSINSKI and other principal investigators received an email from the clinical trial team stating that there had been several allergic reactions during the clinical trial, the acceptance of new subjects was put on hold and the Data and Safety Monitoring Board (“DSMB”) would be reviewing the recent events. On June 30, 2014, while in possession of this non-public information, KOSINSKI sold his 40,000 shares of Regado common stock for between $6.59 and $7.00 per share. On July 2, 2014, after the close of the market, Regado publicly announced that the DSMB initiated an unplanned review of the clinical trial and patient enrollment had been suspended until the DSMB completed its review. On July 3, 2014, the stock fell $3.95 from the day’s previous closing price, to close at $2.81.
By selling his shares of Regado stock KOSINSKI avoided a loss of approximately $160,000.
On July 29, 2014, KOSINSKI and other principal investigators received an email from the clinical trial team stating that a death occurred in the clinical trial and that the trial was on hold. On July 31, 2014, while in possession of this material, non-public information, KOSINSKI purchased 50 Regado common stock put option contracts with a strike price of $2.50. On August 25, 2014, before the market opened, Regado publicly announced that it permanently halted the clinical trial and the price of Regado common stock fell approximately 60 percent. KOSINSKI then purchased 5,000 shares of Regado common stock for approximately $1.13 per share and exercised his put options, netting more than $3,000.
KOSINSKI, who is released on a $500,000 bond, was ordered to report to prison on January 4, 2019.
This matter was investigated by the Federal Bureau of Investigation was prosecuted by Assistant U.S. Attorneys Heather Cherry and Jonathan Francis.
In a related federal civil matter, KOSINSKY has been charged by the Securities and Exchange Commission. (Securities and Exchange Commission v. Edward J. Kosinski 3:16-cv-01322)
El Dorado Man Sentenced to 7 Years in Federal Prison for Distribution of Methamphetamine and Firearms ViolationRead the Press Release
El Dorado, Arkansas - Duane (DAK) Kees, United States Attorney for the Western District of Arkansas, announced that Tommie Roshaun Glosson, age 23, of El Dorado, was sentenced today to 84 months in federal prison followed by three years of supervised release on one count of Distribution of Methamphetamine and two counts of Felon in Possession of a Firearm. The Honorable Susan O. Hickey presided over the sentencing hearing in the United States District Court in El Dorado.
According to court records, in 2017, investigators with the 13th Judicial District Drug Task Force, the Union County Sheriff’s Department, the Federal Bureau of Investigation, and the El Dorado Police Department conducted two controlled purchases from Glosson, first of a firearm and methamphetamine, and later of a firearm. Glosson was subsequently arrested.
Glosson was indicted by a federal grand jury in October 2017 and entered a guilty plea to distribution of methamphetamine and felon in possession of a firearm in February 2018.
This case was investigated by the 13th Judicial District Drug Task Force, the Union County Sheriff’s Department, the Federal Bureau of Investigation, and the El Dorado Police Department. Assistant United States Attorney Graham Jones prosecuted the case for the United States.
Department of Justice Announces the Rollout of an Updated United States Attorneys’ ManualRead the Press Release
The Department of Justice announced the rollout of an updated United States Attorneys’ Manual, now titled the Justice Manual. It is the first comprehensive review and overhaul of the Manual in more than 20 years. The Department-wide effort involved the dedicated work of over 200 Department of Justice employees.
“This was truly a Department-wide effort, involving hundreds of employees collaborating from many different Department components,” said Deputy Attorney General Rod Rosenstein. “To mark this significant undertaking, and to emphasize that the Manual applies beyond the United States Attorneys’ Offices, we have renamed it the Justice Manual. Though the name has changed, the Manual will continue as a valuable means of improving efficiency, promoting consistency, and ensuring that applicable Department policies remain readily available to all employees as they carry out the Department’s vital mission.”
By 2017, many provisions of the Manual no longer reflected current law and Department practice. This diminished the Manual’s effectiveness as an internal Department resource, and reduced its value as a source of transparency and accountability for the public. To bring the Manual up to date, employees from around the country, primarily career attorneys, undertook a yearlong, top-to-bottom review. The Department’s goals were to identify redundancies, clarify ambiguities, eliminate surplus language, and update the Manual to reflect current law and practice.
Some specific changes include expanding the Principles of Federal Prosecution to incorporate current charging and sentencing policies, and adding new policies on religious liberty litigation, third-party settlement payments, and disclosure of foreign influence operations.DOJ Funds Services for Victims of Domestic Violence and Sexual AssaultRead the Press Release
The U.S. Department of Justice’s Office of Violence against Women has awarded a three- year $600,000 grant to provide legal assistance to victims of domestic violence and sexual assault in Skagit County, Washington announced U.S. Attorney Annette L. Hayes. The grant was awarded to the Northwest Justice Project, headquartered in Seattle, in partnership with Skagit Domestic Violence and Sexual Assault Services.
“These funds will support victims of crime and enhance the ability of local organizations to reach out to victims who may be isolated geographically or have limited English-speaking skills,” said U.S. Attorney Annette L. Hayes. “The work supported by thee grants is important to ensuring justice reaches everyone in our Western Washington communities.”
According to the grant award, the funding will increase civil and criminal legal assistance programs for victims of domestic violence, dating violence, sexual assault and stalking. The funds provide legal services, at minimal or no cost, to victims who are seeking relief through the courts arising out of domestic abuse or violence. Some of the services include assisting with protection orders and victim impact statements; attending court in support of victims; and providing culturally relevant education programs about domestic abuse and sexual violence to immigrant, Native American and limited English-speaking populations.
For more information on this grant, please contact the Northwest Justice Project or DOJ’s Office on Violence Against Women.
Cushing Man Pleads Guilty to Seaman’s ManslaughterRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Christopher A. Hutchinson, 30, of Cushing, Maine pleaded guilty today in U.S. District Court to two counts of Seaman’s Manslaughter for causing two deaths at sea.
According to court records, on November 1, 2014, after smoking marijuana and drinking, Hutchinson took his lobster boat, No Limits, out into a predicted storm with two crewmen aboard. After he had ingested oxycodone, the boat capsized. The two crewmen were not wearing personal floatation devices or survival suits. The No Limits’ Emergency Position Indicating Radio Beacon alerted at about 1:20 p.m. The Coast Guard rescued Hutchinson at about 4 p.m. At the time, he was wearing shorts and a t-shirt. The Coast Guard located the bow of No Limits at about 5 p.m. The bodies of the crewmen have never been recovered.
The defendant faces up to 10 years in prison, three years of supervised release, and a $250,000 fine on each count. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office. A plea agreement provides that a sentence of four years in prison and three years of supervised release is appropriate and that the defendant may withdraw his guilty plea if the court rejects that sentence.
The investigation was conducted by the U.S. Coast Guard.
Chinese National Arrested for Allegedly Acting Within the United States as an Unregistered Agent of the People’s Republic of ChinaRead the Press Release
CHICAGO — A Chinese national was arrested in Chicago today for allegedly acting within the United States as an illegal agent of the People’s Republic of China.
JI CHAOQUN, 27, a Chinese citizen residing in Chicago, worked at the direction of a high-level intelligence officer in the Jiangsu Province Ministry of State Security, a provincial department of the Ministry of State Security for the People’s Republic of China, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. Ji was tasked with providing the intelligence officer with biographical information on eight individuals for possible recruitment by the JSSD, the complaint states. The individuals included Chinese nationals who were working as engineers and scientists in the United States, some of whom were U.S. defense contractors, according to the complaint.
The complaint charges Ji with one count of knowingly acting in the United States as an agent of a foreign government without prior notification to the Attorney General. He will make an initial court appearance today at 4:00 p.m. CDT before U.S. Magistrate Judge Michael T. Mason in Courtroom 2266 of the Everett M. Dirksen U.S. Courthouse in Chicago.
The arrest and complaint were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; John C. Demers, Assistant Attorney General for National Security at the U.S. Department of Justice; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The U.S. Army 902nd Military Intelligence Group provided valuable assistance. The government is represented by Assistant U.S. Attorney Shoba Pillay of the Northern District of Illinois, and Senior Trial Attorney Heather Schmidt of the National Security Division’s Counterintelligence and Export Control Section.
According to the complaint, Ji was born in China and arrived in the United States in 2013 on an F1 Visa, for the purpose of studying electrical engineering at the Illinois Institute of Technology in Chicago. In 2016, Ji enlisted in the U.S. Army Reserves as an E4 Specialist under the Military Accessions Vital to the National Interest program, which authorizes the U.S. Armed Forces to recruit certain legal aliens whose skills are considered vital to the national interest. In his application to participate in the MAVNI program, Ji specifically denied having had contact with a foreign government within the past seven years, the complaint states. In a subsequent interview with a U.S. Army officer, Ji again failed to disclose his relationship and contacts with the intelligence officer, the charge alleges.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. The charge in the complaint is punishable by a maximum sentence of ten years in prison. The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Chinese National Arrested for Allegedly Acting Within the United States as an Illegal Agent of the People’s Republic of ChinaRead the Press Release
Ji Chaoqun, 27, a Chinese citizen residing in Chicago, was arrested in Chicago today for allegedly acting within the United States as an illegal agent of the People’s Republic of China.
The arrest and complaint were announced by Assistant Attorney General for National Security John C. Demers, U.S. Attorney John R. Lausch, Jr. for the Northern District of Illinois, and Special Agent in Charge Jeffrey S. Sallet of the FBI’s Chicago field office.
Ji worked at the direction of a high-level intelligence officer in the Jiangsu Province Ministry of State Security, a provincial department of the Ministry of State Security for the People’s Republic of China, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. Ji was tasked with providing the intelligence officer with biographical information on eight individuals for possible recruitment by the JSSD, the complaint states. The individuals included Chinese nationals who were working as engineers and scientists in the United States, some of whom were U.S. defense contractors, according to the complaint.
The complaint charges Ji with one count of knowingly acting in the United States as an agent of a foreign government without prior notification to the Attorney General. He will make an initial court appearance today at 5:00 p.m. EDT (4:00 p.m. CDT) before U.S. Magistrate Judge Michael T. Mason in Courtroom 2266 of the Everett M. Dirksen U.S. Courthouse in Chicago.
According to the complaint, Ji was born in China and arrived in the United States in 2013 on an F1 Visa, for the purpose of studying electrical engineering at the Illinois Institute of Technology in Chicago. In 2016, Ji enlisted in the U.S. Army Reserves as an E4 Specialist under the Military Accessions Vital to the National Interest (MAVNI) program, which authorizes the U.S. Armed Forces to recruit certain legal aliens whose skills are considered vital to the national interest. In his application to participate in the MAVNI program, Ji specifically denied having had contact with a foreign government within the past seven years, the complaint states. In a subsequent interview with a U.S. Army officer, Ji again failed to disclose his relationship and contacts with the intelligence officer, the charge alleges.
A criminal complaint is merely an accusation. The defendant is presumed innocent unless and until proven guilty. The charge carries a maximum sentence of ten years in prison. The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
The U.S. Army 902nd Military Intelligence Group provided valuable assistance. The government’s case is represented by Assistant U.S. Attorney Shoba Pillay of the Northern District of Illinois and Senior Trial Attorney Heather Schmidt of the National Security Division’s Counterintelligence and Export Control Section.
Chief Financial Officer of Marlborough Business Sentenced for Bank Fraud ConspiracyRead the Press Release
BOSTON – The chief financial officer of a Marlborough business was sentenced yesterday in federal court in Worcester in connection with a scheme to commit bank fraud.
John J. Crowley, 62, of Boca Raton, Fla., was sentenced by U.S. District Court Judge Timothy S. Hillman to three years of supervised release and ordered to pay restitution of $60,000. In March 2018, Crowley and co-defendant James R. Faro, of Dover, each pleaded guilty to conspiring to commit bank fraud. On Sept. 18, 2018, Faro was sentenced to two years in prison and ordered to pay $1,121,155 in restitution.
Faro is the former owner and president of Sea Star Seafood Corporation, a company previously headquartered in Marlborough that distributed frozen seafood products. Crowley is the former chief financial officer for Sea Star.
From October 2010 until August 2012, Sea Star maintained an asset-backed loan agreement whereby a bank agreed to loan Sea Star up to $6 million pursuant to a revolving line of credit. Sea Star pledged its assets – most notably its inventory and accounts receivable – as collateral for the loan.
Between November 2010 and August 2012, Faro and Crowley conspired to intentionally overstate the value of Sea Star’s outstanding accounts receivable that it reported to the bank. By doing so, Faro and Crowley fraudulently increased the level of assets against which Sea Star could borrow from the bank. In August 2012, Sea Star informed the bank that it had discovered a “discrepancy” of over $3 million in its reported, versus actual, assets. Sea Star discontinued its business operations approximately one week later.
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. Assistant U.S. Attorney Greg A. Friedholm of Lelling’s Worcester Branch Office prosecuted the case.
Chicago Insurance Agent Guilty of Failing to Pay Taxes on More Than $4.7 Million in IncomeRead the Press Release
CHICAGO — A Chicago insurance agent has pleaded guilty to willfully failing to pay federal and state taxes on more than $4.7 million in income earned over a decade.
JOHN OCWIEJA admitted in a plea agreement that he willfully failed to pay income taxes for tax years 2006 to 2016, causing a combined loss to the United States and State of Illinois of more than $1.1 million. During those years, Ocwieja earned a total income of more than $4.7 million as a licensed insurance agent and financial representative, the plea agreement states.
Ocwieja, 49, of Chicago, pleaded guilty Monday to three counts of willfully failing to file a federal tax return. U.S. Magistrate Judge M. David Weisman set sentencing for Dec. 18, 2018, at 10:00 a.m.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The government is represented by Assistant U.S. Attorneys Andrianna Kastanek and Patrick King.
According to the plea agreement, Ocwieja earned more than $500,000 in three of the eleven years he failed to pay income taxes, and more than $300,000 in four other years. Ocwieja acknowledged in the plea agreement that he used the funds for personal matters instead of satisfying his tax liabilities.
The conviction carries a maximum total sentence of three years in federal prison. The Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Charlotte Man Convicted of Conspiracy to Defraud the GovernmentRead the Press Release
A federal jury in Charlotte, North Carolina convicted a Charlotte man today of conspiracy to defraud the government, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.
According to court documents and evidence presented at trial, between October 2007 and May 2016, Arthur Joseph Gerard III assisted clients in hiding income and assets from the Internal Revenue Service (IRS) using straw companies and bank accounts opened in the names of those companies. In particular, Gerard conspired with his client, Reuben DeHaan, to hide from the IRS over $2.7 million in gross receipts earned by DeHaan through his holistic medicine business. Gerard recruited his friend, Richard H. Campbell Jr., into the scheme to serve as a nominee on DeHaan’s bank accounts. Gerard also assisted DeHaan in the filing of false documents with the IRS to obstruct the IRS’ collection efforts. Gerard charged DeHaan a fee of between $1,000 and $2,500 for each straw company he created. In total, Gerard’s conduct caused a tax loss of approximately $560,000.
Gerard faces a statutory maximum of five years in prison, as well as a period of supervised release, restitution, and monetary penalties. DeHaan and Campbell each previously pleaded guilty and have been sentenced.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney William Miller and Trial Attorney Mara Strier of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Charlotte Man Convicted of Conspiracy to Defraud the GovernmentRead the Press Release
CHARLOTTE, N.C. - A federal jury in Charlotte, North Carolina convicted a Charlotte man today of conspiracy to defraud the government, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.
According to court documents and evidence presented at trial, between October 2007 and May 2016, Arthur Joseph Gerard III assisted clients in hiding income and assets from the Internal Revenue Service (IRS) using straw companies and bank accounts opened in the names of those companies. In particular, Gerard conspired with his client, Reuben DeHaan, to hide from the IRS over $2.7 million in gross receipts earned by DeHaan through his holistic medicine business. Gerard recruited his friend, Richard H. Campbell Jr., into the scheme to serve as a nominee on DeHaan’s bank accounts. Gerard also assisted DeHaan in the filing of false documents with the IRS to obstruct the IRS’ collection efforts. Gerard charged DeHaan a fee of between $1,000 and $2,500 for each straw company he created. In total, Gerard’s conduct caused a tax loss of approximately $560,000.
Gerard faces a statutory maximum of five years in prison, as well as a period of supervised release, restitution, and monetary penalties. DeHaan and Campbell each previously pleaded guilty and have been sentenced.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney William Miller and Trial Attorney Mara Strier of the Tax Division, who prosecuted the case.
Business Owners and Corporation Plead Guilty to Immigration CrimesRead the Press Release
Jackson, Miss. – Cheng Lin, 36, and and his father, Guo Guang Lin, 61, both of Meridian, Mississippi, pled guilty today before U.S. District Court Senior Judge David M. Bramlette III to harboring illegal aliens at their restaurant, China Buffet II, in Meridian, announced U.S. Attorney Mike Hurst, Homeland Security Investigations Special Agent in Charge Jere T. Miles and U.S. Department of Labor Office of Inspector General Special Agent in Charge Rafiq Ahmad. In addition, Lin’s China Buffett of Meridian, Inc. d/b/a/ China Buffet II also pled guilty to harboring illegal aliens and agreed to two years probation and an immigration compliance program, in addition to forfeiture and a $200,000 fine.
The Defendants will be sentenced by Judge Bramlette on January 8, 2019 at 10:00AM.
"Employing and harboring illegal aliens harms American citizens by stealing jobs and puts business owners who follow the law at a competitive disadvantage. This should serve as a warning to all those who attempt to illegally profit and gain a competitive advantage by violating our immigration laws - you will be prosecuted and punished, and your ill-gotten gains will be forfeited. I commend the prosecutors and agents who worked tirelessly for years to bring these criminals to justice," said U.S. Attorney Hurst.
In 2004, Defendant Guo Guang Lin was listed as one of the principal officers of China Buffet of Meridian. In 2011, Guo Guang Lin became the principal officer of the company. In 2014, the company was dissolved and reincorporated as Lin’s China Buffet of Meridian d/b/a China Buffet II, with Gui Guang Lin and Cheng Lin listed as some of the incorporators.
From 2012 through January 2017, HSI agents observed a 15-passenger van registered to China Buffet II making multiple trips to a house owned by China Buffet of Meridian Inc. to pick up illegal aliens living at the house and transport them to the restaurant where they worked, and back to the home.
In January 2013, three illegal aliens were encountered by HSI, two of whom were in a 15-passenger van previously parked at a residence owned by China Buffet where the illegal aliens lived while working at China Buffet.
On February 22, 2017, HSI agents executed a search warrant at China Buffet and encountered 9 illegal aliens. None of them were required to complete any paperwork or show any documents or identification when they were hired as employees, nor were they asked about their immigration status.
Guo Guang Lin was identified by multiple illegal aliens as the driver of the passenger van between the home housing the illegal aliens and the business. Guo Guang Lin was also identified by illegal aliens as a cook at the restaurant. When Cheng Lin was interviewed, he admitted that the employees he paid in cash lived at the house owned by China Buffet II, while the hostess was paid via check. A monthly payroll ledger discovered during the search confirmed illegal employee names, dates worked, amounts paid and other information from July 2013 through January 2017. This ledger was separate from the payroll records for legal employees. It was also discovered through the investigation that China Buffet II omitted wages for their illegal employees when sending payroll records to their accountant in New York. The defendants also failed to withhold and pay federal income taxes on these illegal aliens, failed to prepare I-9 Forms, and failed to report wages to the Mississippi Department of Employment Security or the Internal Revenue Service.
In 2007, HSI arrested numerous illegal aliens employed at a restaurant owned by Cheng Lin in New Orleans. Cheng Lin admitted to paying employees in cash, and that employees were provided lodging, transportation and meals at no expenses. Lin was fined $23,250 for I-9 violations.
The defendants agreed to the following forfeiture amounts resulting from seizures by HSI agents during execution of the search warrant on February 22, 2017:
$437,046 cash seized from safe deposit box number at Citizen’s National Bank;
$106,000 cash in lieu of house owned by the corporation used to house illegal aliens;
$86,070 cash seized from Defendant Cheng Lin’s home;
$68,124.00 cash seized at the China Buffet II Restaurant;
$34,212.94 held at Citizens National Bank in the name of Lin’s China Buffet of Meridian, Inc
Insurance payments or proceeds relating to the 2007 Ford E-350 van, VIN x-8040;
The case was investigated and indicted by Assistant United States Attorneys Glenda Haynes and Dave Fulcher. It is currently being prosecuted by United States Attorney Mike Hurst.
Boston Philharmonic Orchestra Artistic Director Arrested for Child PornographyRead the Press Release
BOSTON – An employee of the Boston Philharmonic Orchestra and the Boston Philharmonic Youth Orchestra was arrested today and charged in federal court in Boston with receipt and possession of child pornography.
David St. George, 71, of Arlington, was charged with one count of receipt of child pornography and one count of possession of child pornography.
According to charging documents, law enforcement in Boston received information regarding an online storage account suspected of containing child pornography. The IP address linked to the account was assigned to St. George’s internet account. Further investigation into the files revealed approximately 83 images and videos depicting the sexual abuse of children, including a one-year-old girl.
A search warrant executed at St. George’s residence today revealed thousands of files of child pornography, including the sexual assaults of children between six-and-eight years old. It is alleged that St. George has been receiving and downloading child pornography from the “Dark Web” and taking steps to conceal his identity.
According to court documents, St. George is employed by the Boston Philharmonic and the Boston Philharmonic Youth Orchestra.
The charge of receipt of child pornography provides for a mandatory minimum sentence of five years and up to of 20 year in prison. The charge of possession of child pornography carries a sentence of no greater than 10 years in prison. Both counts carry a minimum of five years and up to a lifetime of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Members of the public who have questions, concerns, or information regarding this case should call 617-748-3274.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
United States Attorney Andrew E. Lelling and Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Valuable assistance was provided by the Arlington Police Department. Assistant U.S. Attorney James Herbert of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Bangor Man Sentenced to Six Months for Marijuana ConspiracyRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Nicholas Reynolds, 34 of Bangor, Maine, was sentenced today in U.S. District Court by Judge Jon D. Levy to six months in prison and three years of supervised release, with six months of home confinement, for making and distributing marijuana.
According to court records, during a period between October 2010 and August 2016, the defendant conspired with others to illegally manufacture and distribute marijuana. The defendant grew marijuana at a large, sophisticated indoor growing facility in Frankfort, Maine which he was told was an illegal medical marijuana grow. In May 2016, law enforcement officers executed a federal search warrant at the facility and recovered about 400 marijuana plants, 295 marijuana root balls, and paraphernalia used to manufacture and process marijuana. According to the search warrant affidavit, the defendant and his co-conspirators were not registered as medical marijuana caregivers with the Maine Department of Health and Human Services (DHHS), and the location of the facility was not reported to DHHS.
The case was investigated by the U.S. Drug Enforcement Administration.
Bangor Man Sentenced to 2 Years of Probation for Marijuana ConspiracyRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Jeremy Duguay, 35 of Bangor was sentenced today in U.S. District Court by Judge Jon D. Levy to two years of probation with six months of home confinement and 240 hours of community service for conspiring to make and distribute marijuana.
According to court records, during a period between October 2010 and August 2016, the defendant conspired with others to illegally manufacture and distribute marijuana. The defendant grew marijuana at a large, sophisticated indoor growing facility in Frankfort, Maine which he was told was an illegal medical marijuana grow. In May 2016, law enforcement officers executed a federal search warrant at the facility and recovered about 400 marijuana plants, 295 marijuana root balls, and paraphernalia used to manufacture and process marijuana. According to the search warrant affidavit, the defendant and his co-conspirators were not registered as medical marijuana caregivers with the Maine Department of Health and Human Services (DHHS), and the location of the facility was not reported to DHHS.
The case was investigated by the U.S. Drug Enforcement Administration.
Anchorage Woman Who Defrauded Alaska Medicaid Program Sentenced to Federal PrisonRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that an Anchorage woman was sentenced yesterday by Chief U.S. District Judge Timothy Burgess to serve eight months in federal prison for defrauding the state of Alaska Medicaid Program out of $90,000.
Mi Ran Yu, 41, of Anchorage, acted as a personal care assistant for her parents, who qualified for Medicaid assistance, between 2012 and 2016. Yu was indicted by a federal grand jury in July 2016 for felony health care fraud charges stemming from a scheme to grossly exaggerate the alleged infirmity of her parents, and to falsely report the number of hours which she was allegedly spending to render assistance to them. Yu pleaded guilty in January 2017 to 20 counts of committing health care fraud against the Medicaid program.
In addition to the eight-month prison sentence, Judge Burgess ordered Yu to pay $90,000 in restitution to the state of Alaska Medicaid Program. Yu was also placed on a three-year period of supervised release following service of her custody sentence, and was ordered to pay the federal government a special assessment of $2,000.00
At sentencing, Judge Burgess noted that cases of fraud against social services programs such as Medicaid are often hard to detect, and that sentences of incarceration in these types of cases are especially warranted as a general deterrence to the public. As stated by Judge Burgess “people need to understand that there are serious consequences to committing this type of fraud beyond simply paying the money back.”
This case was investigated by the state of Alaska Medicaid Fraud Control Unit and the Federal Bureau of Investigation (FBI). The case was prosecuted by Assistant U.S. Attorney Joseph Bottini.
Anchorage Hip-Hop Impresario Sentenced to 87 MonthsRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that Rico Paris Gillespie, a/k/a “Rico G The Mayor,” 31, of Anchorage, was sentenced yesterday by U.S. District Judge Sharon L. Gleason, to serve 87 months in prison, followed by four years of supervised release, for his conviction of distribution of methamphetamine.
According to court documents, on three separate occasions in April and May of 2017, Gillespie sold methamphetamine in Anchorage. In May 2017, Gillespie’s house and vehicle were searched by law enforcement officers. During the search, officers found methamphetamine, heroin, and fentanyl packaged for sale, as well as three digital scales inside Gillespie’s house. In a vehicle Gillespie was seen driving prior to the search of the house, law enforcement officers found a loaded Taurus 9mm firearm with a round in the chamber underneath the driver’s seat.
Gillespie styled himself as a local hip-hop performer known by the moniker, “Rico G The Mayor.” Gillespie has posted many videos online where his lyrics and videos depict a glamorous lifestyle funded by drug trafficking and other illegal activities.
Before imposing a sentence, Judge Gleason commented that she was particularly troubled that Gillespie dealt drugs out of the same home that he shared with young children. She was also concerned that Gillespie was a “for profit” drug trafficker and did not appear to have an addiction to the drugs he was selling in the community. At the sentencing hearing, the record was clear that Mr. Gillespie’s last verified employment was in 2014.
The Drug Enforcement Administration (DEA), the Alaska State Troopers (AST), and the Anchorage Police Department (APD) conducted the investigation leading to the successful prosecution of this case. This case was prosecuted by Assistant U.S. Attorney Kelly Cavanaugh.