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11 September 2018
Rapid City Man Sentenced for Failure to RegisterRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on September 5, 2018, by U.S. District Judge Roberto A. Lange.
Timothy Red Elk, age 38, was sentenced to 14 months in federal prison, 5 years of Supervised Release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Red Elk was indicted by a federal grand jury on May 15, 2018. He pled guilty on June 27, 2018.
The conviction stems from Red Elk, who is a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of conviction under Federal Law, did knowingly fail to register and updated his registration between March 14, 2018 and March 22, 2018.
This case was investigated by the United States Marshal Service. Assistant U.S. Attorney Jay Miller prosecuted the case.
Red Elk was immediately turned over to the custody of the U.S. Marshals Service.
Philadelphia man admits to drug chargesRead the Press Release
MARTINSBURG, WEST VIRGINIA – Anthony Lamont Lott, of Philadelphia, Pennsylvania, has admitted to a drug charges, United States Attorney Bill Powell announced.
Lott, also known as “Ant,” age 49, pled guilty to one count of “Possession with Intent to Distribute Cocaine Base” and one count of “Possession with Intent to Distribute Methamphetamine.” Lott admitted to distributing cocaine base and methamphetamine in July 2017 and August 2018 in Berkeley County.
Morgan faces up to not less than five years and up to 40 years incarceration and a fine of up to $5,000,000 for the cocaine count, and faces up to 20 years incarceration and a fine of up to $1,000,000 for the methamphetamine count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, and the Martinsburg Police Department investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Pensacola Sex Offender Sentenced to 40 Years for Receipt of Child PornographyRead the Press Release
PENSACOLA, FLORIDA – John William Hall, 61, a registered sex offender residing in Pensacola, was sentenced to 40 years in federal prison yesterday, after pleading guilty on February 22, to receipt of child pornography. The sentence was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
In 2017, Homeland Security Investigations interviewed a teenage girl whose image had appeared in child pornography recovered in Canada. The girl identified herself in the pornographic pictures and told investigators they were taken when she was around 13 or 14 years old. She said some of the photographs had been taken at Hall’s residence in Pensacola.
In June 2017, law enforcement officers seized Hall’s computers and cellular telephones. A review of Hall’s computer revealed numerous images of child pornography, including pornographic images of children under the age of 12. The investigation showed that Hall had also searched for child pornography on a Russian website known for the distribution of child pornography.
U.S. Attorney Canova said: “Thanks to the hard work of our law enforcement partners and prosecutors, this predator will never be able to hurt another child. This 40-year sentence should serve as a warning to those who would victimize vulnerable children.”
“Justice was served in this case, as this predator received what is essentially a life sentence in prison for his crimes against children,” said HSI Tampa Special Agent in Charge James C. Spero.
The case was investigated by the United States Immigration and Customs Enforcement Homeland Security Investigations, Mobile and Pensacola Offices. The case was prosecuted by Assistant United States Attorney Jeffrey M. Tharp.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Pain Management Physician Sentenced to 8 Years in Federal Prison for Central Role in Million Dollar Kickback Scheme and Fraudulent Billing SchemeRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge James K. Bredar sentenced Atif Babar Malik, age 48, of Germantown, Maryland, today to eight years in prison, followed by three years of supervised release. The sentence was imposed for his trial conviction on 26 counts arising from two criminal schemes involving $1.376 million in kickbacks and fraudulently billing, as well as his guilty plea to a conspiracy to defraud the United States of more than $2.1 million in taxes. Chief Judge Bredar also ordered Malik to pay a fine of $75,000; to pay restitution of $175,000; and to forfeit $241,976.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Gordon Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Special Agent in Charge Robert E. Craig, Jr. of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Special Agent in Charge Bret D. Mastronardi, Investigative Operations, U.S. Office of Personnel Management Office of the Inspector General.
According to his plea agreement and the evidence presented to the jury at his 13-day trial, Malik is a physician trained in pain management. Malik and co-defendant, Dr. Sandeep Sherlekar, merged their pain management practices in February 2009 to create Advanced Pain Management Services, LLC (APMS), which had offices in Maryland and New Jersey. In August 2010, APMS began doing business under the name of American Spine Center, LLC (APMS/ASC). Co-defendants Muhammad Ahmad Khan and Vic Wadhwa were respectively the CEO and CFO of APMS/ASC.
The Kickback Scheme
APMS/ASC physicians required patients who were prescribed controlled substances as pain relief medications to submit urine specimens to monitor the levels of pain medication or other narcotics in their bodies. According to evidence presented at trial, in late 2011, Mubtagha Syed, the marketing agent for Accu Reference (which was owned by co-defendant Konstantin Bas), proposed to Khan and Wadhwa that APMS/ASC start referring patients’ urine toxicology specimens to Accu Reference in return for the payment of kickbacks. After Malik and Sherlekar approved the plan, which also came to include back braces from another Bas-controlled company, APMS/ASC began submitting all of its patients’ urine specimens to Accu Reference.
Each month from April 2011 through July 2012, APMS/ASC referred between 700 and 1,300 patient urine specimens to Accu Reference in return for kickbacks. Accu Reference received approximately $4.4 million from claims submitted to Medicare and private insurers for testing the specimens. After deducting its overhead expenses on the testing, Accu Reference split its profits 50/50 with Khan, Wadhwa, Sherlekar, and Malik. (Syed also received a share of Accu Reference’s profits.) From the time the kickback payments commenced in June 2011 until the end of the scheme in August 2012, Bas caused his companies to pay kickbacks totaling $1.376 million to Sherlekar, Malik, Khan and Wadhwa. Khan and Wadhwa deceived Drs. Sherlekar and Malik about the full amount of the kickback payments from Accu Reference, however, and retained more than 60% of the kickback payments for themselves. Drs. Sherlekar and Malik each received approximately $240,000 in kickbacks from the scheme.
The Fraudulent Anesthesia Billing Scheme
In addition, according to evidence presented at trial, from January 2010 through the summer of 2012, APMS/ASC fraudulently submitted bills to Medicare and private insurers using a billing code that represented that two separate physicians had provided the nerve block and the anesthesia, when in fact, only one physician performed both. As a result of this fraudulent “upcoding,” APMS/ASC received a higher level of reimbursement from insurers. For example, on January 3, 2012, Dr. Sherlekar provided both spinal injections and anesthesia to a large number of patients at APMS/ASC’s Frederick office. However, he texted Dr. Malik that “I am using your name today as surgeon as we have 34 procedures here [in Frederick] and 20 in Waldorf,” to which Malik responded “ok.” Malik was seeing patients at his office in Hackettstown, New Jersey that day.
The Tax Evasion Scheme
On June 25, 2018, Malik pleaded guilty to conspiring to defraud the IRS. Malik admitted that from 2009 through 2012, he underreported his taxable income by approximately $3,374,997, resulting in additional taxes owed of $1,157,712. Malik failed to report as income the kickback payments received from Accu Reference; he did not report and instead pocketed large amounts of the cash payments received by the practice from patients; and he used the services of a corrupt New Jersey accountant to fraudulently overstate APMS/ASC’s business expenses on its corporate tax returns and to understate the income received from the company.
Co-Defendants:
Sandeep Sherlekar, age 52, of Germantown, Maryland, died before his scheduled initial appearance and arraignment. The charges were dismissed after his death.
Konstantin Bas, age 41, of Brooklyn, New York, pleaded guilty to conspiring to violate the
Anti-Kickback Act. Scheduled to be sentenced on September 12, 2018 at 10:00 a.m.Mubtagha Shah Syed, age 50, of Jersey City, New Jersey; pleaded guilty to conspiring to violate the Anti-Kickback Act. Scheduled to be sentenced on September 12, 2018 at 2:15 p.m.
Vic Wadhwa, 41, of Frederick, Maryland, pleaded guilty to violating the Anti-Kickback Act.
Scheduled to be sentenced on September 26, 2018 at 4:00 p.m.Muhammad Ahmad Khan, age 44, charged with the kickbacks conspiracy and conspiracy to defraud the United States. He is a fugitive.
United States Attorney Robert K. Hur commended the FBI, the Department of Health and Human Services – Office of the Inspector General, IRS - Criminal Investigation, the Defense Criminal Investigative Service, and the Office of Personnel Management – Office of the Inspector General for their work on the investigation. Mr. Hur also thanked Assistant U.S. Attorneys Jefferson M. Gray and Sean R. Delaney, who prosecuted the case against Dr. Malik.
Owner of Milton Roofing Business Sentenced for Failing to Report $2.1 Million in Business ReceiptsRead the Press Release
BOSTON – The owner of George H. Richard & Son Roofing in Milton, Mass., was sentenced today in federal court in Boston for filing a false tax return which failed to disclose substantial business receipts.
Harry S. Richard, 68, was sentenced by U.S. District Judge Nathaniel M. Gorton to one year and one day in prison, one year of supervised release and ordered to pay restitution of $353,246. In May 2018, Richard pleaded guilty to one count of filing a false individual tax return.
Richard owned and operated Richard Roofing, a business established by his great-grandfather in 1865. From 2010 through 2013, Richard deposited the bulk of the payments he received for roofing services into his personal bank accounts and failed to disclose those receipts to his tax return preparer or on his tax returns. Many of the checks he received from his customers were made payable to Richard personally, at his direction. Over the course of four years, Richard failed to report more than $2.1 million in business receipts on his tax returns, and thereby avoided paying taxes totaling about $353,246.
United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement. Assistant U.S. Attorney Mark J. Balthazard of Lelling’s Economic Crimes Unit prosecuted the case.
Nigerian Man Sentenced to 5 Years in Prison for Participating in Business Email Compromise ScamsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that ONYEKACHI EMMANUEL OPARA was sentenced today in Manhattan federal court to 60 months in prison based upon OPARA’s participation in fraudulent business email compromise scams that targeted thousands of victims in the United States and around the world. Through these scams, OPARA and his co-conspirators attempted to defraud victims of over $25 million. On April 11, 2018, OPARA pled guilty to conspiracy to commit wire fraud and wire fraud before U.S. District Judge Paul A. Crotty, who imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “From halfway around the world, Onyekachi Emmanuel Opara ran a global email scam business that victimized thousands of people out of millions of dollars. The global reach of our Office and the FBI ensured that Opara will serve time in the United States for his crimes.”
According to the allegations in the Indictment to which OPARA pled guilty and statements made at the plea and sentencing proceedings:
Between 2014 and 2016, OPARA and his co-defendant, David Chukwuneke Adindu (“Adindu”), participated in multiple business email compromise (“BEC”) scams that targeted thousands of victims around the world, including in the United States, the United Kingdom, Australia, Switzerland, Sweden, New Zealand, and Singapore. OPARA sent bogus emails to employees of the victim companies directing that funds be transferred to specified bank accounts. The emails purported to be from supervisors at those companies or from third party vendors with whom the companies did business. In reality, the emails were either sent from email accounts with domain names very similar to those of the companies and vendors, or the metadata for the emails was modified to make it appear as if the emails had been sent from legitimate email addresses. After victims transferred the funds as directed in the bogus emails, the funds were quickly withdrawn or transferred to other bank accounts controlled by scheme participants. In total, the BEC scam participants attempted to steal more than $25 million from victims around the world.
In furtherance of the BEC scams, OPARA created accounts on dating websites and entered into online romantic relationships with individuals in the United States by portraying himself as a young attractive woman named “Barbara.” “Barbara” would then instruct these individuals in the United States to send their money overseas and/or to receive money from BEC scams and forward the proceeds to other scheme participants located overseas. For example, one victim with whom OPARA struck up a romantic relationship sent over $600,000 of the victim’s own money to bank accounts controlled by scheme participants at OPARA’s direction. OPARA also attempted to recruit at least 14 other individuals via dating websites to receive funds from BEC scams into their bank accounts and then transfer the proceeds to overseas bank accounts.
OPARA was arrested on December 22, 2016, in Johannesburg, South Africa, and was extradited to the Southern District of New York on January 26, 2018.
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In addition to the prison term, OPARA, 30, of Lagos, Nigeria, was sentenced to two years of supervised release and was ordered to pay $2.5 million in restitution.
On June 20, 2017, Adindu pled guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit identity theft. On December 14, 2017, Judge Crotty sentenced Adindu to 41 months in prison and ordered him to pay approximately $1.4 million in restitution.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation. Mr. Berman also thanked Oath’s E-Crime Investigations Team, the National Prosecuting Authority for South Africa, the South African Police Service, and the United States Marshals Service. Mr. Berman noted that the investigation is ongoing.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Andrew K. Chan and Daniel Loss are in charge of the prosecution.
New Jersey Man Admits Deleting Former Employer’s Network FilesRead the Press Release
NEWARK, N.J. – A former information technology employee today admitted accessing his former employer’s computer network and deleting files, U.S. Attorney Craig Carpenito announced.
David Campos, 60, of Union, New Jersey, pleaded guilty today before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with fraud and related activity in connection with computers.
According to documents filed in the case and statements made in court:
From 2005 through February 2017, Campos was an employee of and provided information technology services to a business whose corporate offices were located in Jersey City, New Jersey.
After he was no longer employed by the company, Campos accessed its network without authorization on July 25, 2017, July 28, 2017, and August 1, 2017. Each time, he deleted numerous files from the company’s network. Campos acknowledged in the plea agreement that his actions resulted in losses of more than $150,000. The United States reserved the right to argue that Campos’ actions resulted in losses of up to $1.5 million.
The charge to which Campos pleaded guilty carries a maximum potential penalty of 10 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 22, 2019.
U.S. Attorney Carpenito credited and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, with the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel Andrew Kogan and Assistant U.S. Attorney Justin Herring, Chief of the U.S. Attorney’s Office Cybercrime Prevention and Enforcement Unit in Newark.
Defense counsel: Michael Koribanics Esq., Clifton, New Jersey
Milan woman charged in federal court after trying to hire a hitman to kill her former son-in-lawRead the Press Release
A Milan woman was charged in federal court with one count of solicitation to commit a crime of violence.
Sandra Haughawout, 70, was charged via a criminal information filed in U.S. District Court.
Haughawout in May attempted to locate a hire a hitman to kill her former son-in-law. She was willing to pay up to $10,000 to have her former son-in-law killed, according to court documents.
On May 30, an undercover FBI agent posing as a hitman met with Haughawout in Milan. Haughawout said her daughter was having a dispute with the former son-in-law over custody of the children, according to court documents.
Haughawout said she would pay $8,000 up front and an additional $2,000 when the “deed” was done. Haughawout stated the code would be that the undercover agent “had the dog put down,” according to court documents.
Haughawout then has the undercover agent follow her as she identified the former son-in-law’s home and workplace, according to court documents
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Federal Bureau of Investigation. The case is being handled by Assistant U.S. Attorney Tracey Ballard Tangeman.
An information is only a charge and is not evidence of guilt. Defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Mexican Man Sentenced to Prison for Illegally Possessing a GunRead the Press Release
An illegal alien who possessed a firearm was sentenced today, to over one year in federal prison.
Jose Ramirez-Galvan, age 37, a citizen of Mexico illegally present in the United States and residing in Waterloo, Iowa, received the prison term after an April 23, 2018, guilty plea to one count of possession of a firearm by an illegal alien.
In a plea agreement, Ramirez-Galvan admitted he illegally possessed a firearm on February 6, 2018. Ramirez-Galvan was deported from the United States to Mexico in May 2012. In October 2015, Ramirez-Galvan illegally returned to the United States without permission. On February 6, 2018, Ramirez-Galvan was arrested in Waterloo, Iowa. During a search of Ramirez-Galvan’s residence, agents found a .22 caliber revolver under Ramirez-Galvan’s mattress. It is a violation of federal law for aliens unlawfully in the United States to possess firearms.
Ramirez-Galvan was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. Ramirez-Galvan was sentenced to 18 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Ramirez-Galvan is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by Department of Homeland Security, Homeland Security Investigations.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-2007-LRR.
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Mason City Woman to Federal Prison for Meth ConspiracyRead the Press Release
A woman who conspired to distribute methamphetamine in Mason City was sentenced September 10, 2018, to more than 10 years in federal prison.
Brenda Ruehlow, age 38 from Mason City, Iowa, received the prison term after a June 4, 2018 guilty plea to one count of conspiracy to distribute methamphetamine.
At the plea hearing, Ruehlow admitted she and others conspired to distribute methamphetamine in the Mason City area from before January 2017 to April 2017.
On April 21, 2017, a search warrant of Ruhelow’s residence resulted in seizing 444.16 grams of ice methamphetamine along with $5,012 in cash, $500 worth in seized electronics and numerous items of drug paraphernalia.
Ruehlow was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. Ruehlow was sentenced to 121 months’ imprisonment. She must also serve a 5-year term of supervised release after the prison term. A special assessment of $100 was imposed. There is no parole in the federal system.
The case was prosecuted by Assistant United States Attorney Jack Lammers and investigated by the Iowa Division of Narcotics Enforcement, Cerro Gordo County Sheriff’s Office, Central Iowa Drug Task Force, Mid-Iowa Drug Task Force, and Iowa Division of Criminal Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-3011.
Follow us on Twitter @USAO_NDIA.
Man Sentenced for Distribution of Methamphetamine from PrisonRead the Press Release
TULSA, Okla.— United States District Court Judge Claire V. Eagan sentenced Slint Kenneth Tate, 36, Tuesday, to 20 years in prison for conspiracy to distribute methamphetamine.
Tate orchestrated a drug distribution ring from inside a prison using contraband cell phones. The drug ring was involved in the distribution of more than 500 grams of methamphetamine throughout northeastern Oklahoma. Tate utilized individuals from towns in northern Oklahoma to pick up and distribute the methamphetamine. He then stored the profits and associated purchases in Miami, Oklahoma.
“While doing life without parole in the state prison system, Slint Tate continued to pose a significant threat to the general public. His criminal organization - from within the prison walls - trafficked drugs and sponsored violence, facilitated by the use of contraband cell phones,” said U.S. Attorney Trent Shores. “Operation Mama Tried resulted in the dismantling of the Slint Tate organization. The United States Attorney’s Office for the Northern District of Oklahoma stands ready to prosecute contraband cellphone facilitated crimes. Whether you use the contraband phones or provide them, we will hold you accountable.”
Operation Mama Tried is the result of a joint investigation by Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, State of Oklahoma District 13 Task Force, Oklahoma Bureau of Narcotics, Miami Police Department, and Grove Police Department. Assistant U.S. Attorneys Shannon Cozzoni and Catherine Depew prosecuted the case.
Man Convicted of Trafficking MethamphetamineRead the Press Release
RICHMOND, Va. – A federal district court judge convicted a Chesterfield County man following a bench trial today on a charge of possession with intent to distribute methamphetamine.
According to court records and evidence presented at trial, John Jason Morgan, 47, had an outstanding arrest warrant for violating a term of supervised release from a 2006 federal conviction for conspiracy to distribute and possess with intent to distribute 50 grams or more of methamphetamine. When arrested on that warrant in September 2017, Morgan had 4.5 grams of methamphetamine in his pants pocket and more than 19 grams of methamphetamine in a safe in his truck. Along with the sheer quantity of methamphetamine that was much greater than an amount typically possessed for personal use, Morgan had scales, packaging materials and other items that indicated distribution activities.
Morgan faces a minimum of five years a maximum of 40 years in prison when sentenced on December 13. Additionally, Morgan faces up to five years in prison on the federal supervised release violation. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Scott W. Hoernke, Acting Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, and Alfred Durham, Chief of Richmond Police, made the announcement after U.S. District Judge M. Hannah Lauck found Morgan guilty. Assistant U.S. Attorney Olivia L. Norman is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:18-cr-48 and 3:06-cr-494-01.
MS-13 Member Sentenced to 23 Years in Prison for RICO ConspiracyRead the Press Release
BOSTON – A member of MS-13 was sentenced yesterday in federal court in Boston.
German Hernandez Escobar, a/k/a “Terible,” 30, a Salvadoran national, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to 23 years in prison, three years of supervised release and will be subject to deportation upon completion of his sentence. In March 2018, Hernandez Escobar pleaded guilty to RICO conspiracy and conspiracy to distribute marijuana.
According to court documents, Hernandez Escobar was a leader of MS-13’s Everett Loco Salvatrucha (ELS) clique and was previously arrested on a state gun possession charge. After his arrest, Hernandez Escobar was recorded suggesting to other ELS members that a 15-year-old member of the clique had cooperated with the police and that he was arrested as a result. Thereafter, the 15-year-old boy was murdered by MS-13 members in a park in Lawrence. Hernandez Escobar also conspired with other MS-13 members to sell marijuana as a means of raising funds to promote the ELS clique’s criminal activities, including purchasing firearms, and ensured that ELS sent dues regularly to incarcerated MS-13 leaders in El Salvador.
Hernandez Escobar is one of 49 defendants who have been convicted as part of this ongoing prosecution. Sixteen of those defendants have been held responsible for murder. Forty of the 49 convictions, including Hernandez Escobar, were the result of guilty pleas prior to trial. Nine other defendants were convicted after trial.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney Daniel F. Conley; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Gross; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; and Somerville Police Chief David Fallon made the announcement today.
Kauai Robber Sentenced to over 15 Years ImprisonmentRead the Press Release
HONOLULU – Walter Mills, 45, was sentenced today to 188 months imprisonment for robbing both a bank and a pharmacy on Kauai. As part of his sentence, Mills must pay $630 in restitution, and serve 3 years of supervised release following his incarceration.
U.S. Attorney Kenji M. Price stated that, according to court documents and information presented in court, on November 3, 2016, Mills escaped from Kauai Community Correctional Center (KCCC) in Wailua, Hawaii. The following day, Mills engaged in a one-day crime spree beginning at First Hawaiian Bank in Lihue, Hawaii. Mills handed the bank teller a demand note: "This is a robbery I have a gun count all the money in the drawer no die pack or mark money." He received $480 in cash. He then used the cash at a local Kmart store to purchase a BB gun. Thereafter, Mills committed a series of carjackings – brandishing the BB gun and stealing vehicles, regardless if the driver was still inside. During one of the carjackings of an occupied vehicle, Mills demanded the owner to drive him to a pharmacy in Koloa, Hawaii. Once he entered the pharmacy, Mills held the BB gun in the air and demanded Oxycontin pills. He received the pills, fled, and continued on his carjacking spree. Mills was arrested in Hanapepe later that day.
At sentencing, U.S. District Judge Helen Gillmor remarked, "I have to look at the safety of the community. The community is not safe when you are out and about."
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The case was investigated by the Kauai Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the FBI, and prosecuted by Assistant U.S. Attorney Sara D. Ayabe.
KC Man Pleads Guilty to Kidnapping, Torture ConspiracyRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Mo., man pleaded guilty in federal court yesterday to his role in a conspiracy to kidnap and torture an Independence, Mo., man.
Richard M. Phoenix, also known as “Snake,” 76, pleaded guilty before U.S. Chief District Judge Greg Kays to one count of conspiracy to commit kidnapping.
According to today’s plea agreement, Phoenix’s co-conspirators purchased at least 120 pounds of marijuana from a source in Colorado, for which they made more than a dozen trips between Colorado and Kansas City. On Sept. 12, 2016, Phoenix’s co-conspirators kidnapped the victim, a co-conspirator in the drug-trafficking conspiracy and identified in court documents as “C.H.,” because he stole money that was intended for the purchase of marijuana.
Conspirators arrived at the Independence, Mo., residence of the victim’s father, identified as “W.H.,” on Sept. 12, 2016. Conspirators told W.H. to call C.H. and tell him he was being held at gunpoint and that C.H. needed to come to the residence right away. When C.H. arrived at the residence, a co-conspirator pointed a firearm at him and told him to get into his vehicle. While in the vehicle, another co-conspirator struck, punched and choked C.H. as they drove away.
They took C.H. to a co-conspirator’s residence, where they were met by Phoenix. C.H. was taken to the basement, where he was assaulted with fists, a hammer and tin snips/clippers. During the assault, conspirators repeatedly demanded that C.H. disclose where the duffle bag containing the money was located. When co-conspirators left to retrieve the duffle bag, Phoenix held C.H. at gunpoint in the basement until they returned.
Conspirators later drove C.H. to a rural residence near Edwards, Mo. As conspirators drove them to the residence, a co-conspirator continued to strike C.H. with fists and the butt of a firearm. When they arrived at the residence, C.H. was told to call his father and to tell him that he was okay, that he had taken a beating, that he would be home in a couple of days and that he deserved what had happened.
Under federal statutes, Phoenix is subject to a sentence of up to 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.
This case is being prosecuted by Assistant U.S. Attorney Brad K. Kavanaugh. It was investigated by the Independence, Mo., Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Benton County, Mo., Sheriff’s Department, the Missouri State Highway Patrol and the FBI.
Justice Department Reaches Settlement with Nebraska Landlord for Charging Unlawful Lease Termination Fees to U.S. ServicemembersRead the Press Release
The Justice Department today announced that Twin Creek Apartments, LLC (Twin Creek), owner of an apartment complex in Bellevue, Nebraska, adjacent to the Offutt Air Force Base, has agreed to a settlement to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by imposing lease termination charges against 65 servicemembers who had exercised their federal right to terminate their residential leases. The charges ranged from $72 to $1,498 per servicemember. The Department initiated an investigation into the practices of Twin Creek after receiving a referral from a U.S. Air Force Community Legal Services office.
The SCRA provides certain protections to servicemembers who must terminate their residential leases in order to comply with military orders for a permanent change of station, deployment, or retirement. Under the terms of the settlement, Twin Creek must pay a total of $76,516 in damages to the 65 identified servicemembers. Under the agreement, Twin Creek will also pay a civil penalty of $20,000 to the United States. The settlement also prohibits Twin Creek from engaging in future violations of the SCRA.
“The SCRA prohibits landlords from charging members of our armed forces an extra fee when they move due to military orders,” said Acting Assistant Attorney General John Gore. “We appreciate Twin Creek’s cooperation with the Department to reach a settlement. The Justice Department continues to ensure that we are doing all we can to protect the rights of servicemembers, veterans, and their families.”
“This is a just resolution for the former tenants and demonstrates our continuing commitment to protecting our servicemembers,” said Joe Kelly, U.S. Attorney for the District of Nebraska.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and United States Attorney’s Offices. Since 2011, the Department has obtained over $467 million in monetary relief for servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Jefferson City Man Sentenced to 4 Years for Illegal FirearmRead the Press Release
JEFFERSON CITY, Mo. – A Jefferson City, Mo., man was sentenced in federal court on September 10, 2018, for illegally possessing a firearm.
Demetric Antwan Gaines, 33, was sentenced by U.S. District Judge Brian C. Wimes to 4 years in federal prison without parole.
On May 14, 2018, Gaines pleaded guilty to being a felon in possession of a firearm. Gaines admitted that he was in possession of a Kahr Arms 9mm semi-automatic pistol on Aug. 8, 2017. A witness told officers that Gaines pulled a black handgun from his waistband, pointed it at her, and threatened her. Officers later found the Kahr Arms 9mm semi-automatic pistol in a locked closet in Gaines’ residence while serving a state search warrant.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Gaines has two prior felony convictions for second degree robbery.
This case was prosecuted by Assistant United States Attorney Lawrence E. Miller. It was investigated by the Bureau of Alcohol Tobacco Firearms and Explosives and the Jefferson City, Missouri Police Department.
Jefferson City Man Sentenced to 13 Years in Prison for Drug-Trafficking and Firing at SWAT Team MemberRead the Press Release
JEFFERSON CITY, Mo. – A Jefferson City, Mo., man was sentenced in federal court today for drug-trafficking and illegally discharging a firearm.
Ardaris Webb Cheatham, 34 years old, of Jefferson City, was sentenced by U.S. District Judge Brian C. Wimes to 13 years in federal prison without parole.
Cheatham pleaded guilty on Apr. 17, 2018, to possessing marijuana with the intent to distribute and discharging a firearm during and in relation to a drug trafficking crime. Cheatham admitted that as Jefferson City Police Department SWAT Team served and executed a search warrant at Cheatham’s residence, he fired one round at the SWAT Team as he retreated further into the residence. The bullet fired by Cheatham did not strike an officer. He then attempted to escape his residence through a basement door, but officers stationed outside the residence apprehended him. Approximately twenty-seven pounds of marijuana was hidden in various locations within the residence. Officers also found a Beretta .40 caliber pistol.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Jefferson City, Mo., Police Department.
Jackson Man Pleads Guilty under Project EJECT to Illegally Possessing a GunRead the Press Release
Jackson, Miss. – Hendricus Tyronyae Parker, 38, of Jackson, pled guilty Friday before U.S. Chief District Judge Daniel P. Jordan III, to being a felon in possession of a firearm, announced U.S. Attorney Mike Hurst, Special Agent in Charge Christopher Freeze with the Federal Bureau of Investigation, and Special Agent in Charge Dana Nichols with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On June 22, 2018, the Gulf Coast Regional Fugitive Task Force executed a warrant for the arrest of Hendricus Parker at an apartment in Jackson. While inside the apartment, law enforcement discovered Hendricus Parker, a convicted felon, possessed three loaded firearms. Parker admitted all three weapons belonged to him. Parker has three prior felony convictions out of Madison County for drug-related offenses.
Parker will be sentenced on December 7, 2018, by Judge Jordan, and faces a maximum penalty of ten years in prison and a $250,000 fine.
The case is being investigated by the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Kimberly Purdie.
This case is part of Project EJECT, an initiative by the U.S. Attorney’s Office for the Southern District of Mississippi under the U.S. Department of Justice’s Project Safe Neighborhoods (PSN). EJECT is a holistic, multi-disciplinary approach to fighting and reducing violent crime in Jackson through prosecution, prevention, re-entry and awareness. EJECT stands for "Empower Jackson Expel Crime Together." PSN is 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.
Inmate to Serve Another 6 Months for Possessing ContrabandRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania pleaded guilty and was sentenced in federal court to six months in jail on his conviction of possession of contraband in prison, United States Attorney Scott W. Brady announced today.
United States District Judge David S. Cercone imposed the sentence on Joseph Grant Barnhart, 40. The sentence was imposed to run consecutively to the sentence Barnhart is currently serving.
According to information presented to the court, on or about October 31, 2017, Barnhart was in possession of contraband, namely a quantity of buprenorphine while an inmate at the McKean Federal Correctional Institution.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
United States Attorney Brady commended officers of the McKean Federal Correctional Institution for the investigation leading to the successful prosecution of Barnhart.
Houma Man Pleads Guilty to Receiving Child PornographyRead the Press Release
NEW ORLEANS, LOUISIANA – THOMAS BROUSSARD (“BROUSSARD”), age 69, of Houma, Louisiana, pleaded guilty today to receiving child pornography, announced United States Attorney Peter G. Strasser.
According to documents filed in federal court, on January 23, 2018, agents with the Louisiana Bureau of Investigation, U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”), and the Louisiana State Police executed a search warrant and arrested BROUSSARD at his Houma home after finding him in possession of several items, including a laptop computer and thumb drive containing images depicting the sexual victimization of prepubescent children. A subsequent computer forensic search by HSI agents revealed over 11,000 images and 85 videos of prepubescent child pornography.
BROUSSARD faces a mandatory minimum penalty of five (5) years imprisonment up to twenty (20) years, followed by up to a life term of supervised release, and a $250,000.00 fine. BROUSSARD will be sentenced on March 26, 2019, by United States District Court Judge Jay C. Zainey.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
U.S. Attorney Strasser praised the work of the U. S. Department of Homeland Security, Homeland Security Investigations, the Louisiana Bureau of Investigation, the Louisiana State Police, and the Terrebonne Parish Sheriff’s Office in investigating this matter. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Section Chief, Assistant U.S. Attorney Brian M. Klebba.
Heroin Trafficker Sentenced to Federal PrisonRead the Press Release
PROVIDENCE - An Ohio man who admitted in court to his association with an Attleboro, MA, woman and others who supplied him with significant quantities of heroin, which he then sold in Ohio, was sentenced in U.S. District Court in Providence on Monday to 48 months in federal prison on drug trafficking charges.
Michael Miller, 39, of Cincinnati, Ohio, and his drug trafficking, came to the attention of law enforcement during a Rhode Island State Police High Intensity Drug Trafficking Area Task Force (HIDTA) and Homeland Security Investigations (HSI) investigation into the Attleboro woman’s drug trafficking activities. The investigation determined that Miller’s association with Olga Lidia Sandoval, 40, of Attleboro, came as the result of Miller’s friendship with one of Sandoval’s brothers, who was shipping significant quantities of heroin to Olga Sandoval from Guatemala through Mexico and into Rhode Island.
Some of the heroin imported by Olga Sandoval was provided to Miller, which he then resold in Ohio. A significant share of the proceeds from the sale of the heroin were paid to the Sandoval brothers in Guatemala.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Miller to serve 3 years supervised release upon completion of his prison sentence. Miller pled guilty on May 10, 2018, to conspiracy to distribute heroin and use of a communication facility (cell phone) in the commission of a felony under the Controlled Substance Act.
As stipulated in a plea agreement filed with the Court, the government and the defense recommended the court impose a sentence of 48 months incarceration. The U.S. Sentencing Guideline imprisonment range in this matter is 87-108 months.
Miller’s sentence is announced by United States Attorney Stephen G. Dambruch; Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police; and Homeland Security Investigations Special Agent in Charge Peter C. Fitzhugh.
Olga Lidia Sandoval pleaded guilty on May 1, 2017, to conspiracy to possess with the intent to distribute one kilogram or more of heroin and possession with the intent to distribute one kilogram or more of heroin. She was sentenced on June 29, 2017, to 84 months in federal prison.
Sandoval’s co-defendants, Jose Luis Amparo Nova, 35, of North Providence, pleaded guilty on January 16, 2017, to conspiracy to possess with the intent to distribute one kilogram or more of heroin and possession with the intent to distribute one kilogram or more of heroin. He was sentenced on July 14, 2017 to 48 months in federal prison. Ivan K. Alvarado, 39, of Spring Valley, NY, pleaded guilty on August 11, 2017, to conspiracy to possession with intent to distribute 100 grams or more of heroin and possession with intent to distribute 100 grams or more of heroin. He was sentenced on October 27, 2017, to 36 months in federal prison.
The cases were prosecuted by Assistant U.S. Attorney Ronald R. Gendron.
United States Attorney Stephen G. Dambruch acknowledges and thanks Drug Enforcement Administration for their assistance in the investigations of these matters.
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Hartford Man Pleads Guilty to Federal Drug and Gun ChargesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that DAQUAN PATTERSON-GREENE, 22, of Hartford, pleaded guilty today before U.S. District Judge Alvin W. Thompson in Hartford to drug and firearm charges.
According to court documents and statements made in court, on September 7, 2017, PATTERSON-GREENE led Hartford Police officers on a foot chase in Hartford’s North End. During the chase, PATTERSON-GREENE discarded a loaded Glock 22 .40 caliber semi-automatic pistol, a firearm magazine containing 15 rounds of .40 caliber ammunition, and an orange backpack.
Officers apprehended PATTERSON-GREENE on Vineland Terrace and recovered the discarded pistol, ammunition and backpack. A search of PATTERSON-GREENE’s person revealed $252 in cash and small amount of marijuana. A search of the backpack revealed approximately 13 ounces of marijuana, 13 zip lock bags containing marijuana, a knotted plastic bag containing several pieces of a substance that field-tested positive for the presence of MDMA (ecstasy), a digital scale, and a box of sandwich bags.
Subsequent analysis of the suspected MDMA identified it as N-Ethylpentylone, which is a controlled analogue of MDMA.
PATTERSON-GREENE’s criminal history includes felony convictions for first-degree assault and possession of a pistol without a permit. In addition, he was on state probation at the time of his arrest.
PATTERSON-GREENE pleaded guilty to one count of possession of marijuana with the intent to distribute, an offense that carries a maximum term of imprisonment of five years, and one count of possession of a firearm in furtherance of a drug trafficking crime, an offense that carries a mandatory consecutive term of imprisonment of five years.
Under the terms of a binding plea agreement, if accepted by the court, the parties have agreed that a term of imprisonment of 96 months is an appropriate sentence in this case.
Judge Thompson scheduled sentencing for December 4, 2018.
PATTERSON-GREENE has been detained since his arrest on September 7, 2017.
This matter is being investigated by the Hartford Police Department and the FBI’s Northern Connecticut Violent Crimes Gang Task Force. The case is being prosecuted by Assistant U.S. Attorney Michael J. Gustafson and Special Assistant U.S. Attorney John F. Fahey of the Hartford State’s Attorney’s Office.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
Guatemalan Man Sentenced for Immigration OffenseRead the Press Release
NEW ORLEANS, LOUISIANA – United States Attorney Peter G. Strasser announced that NERI OSBELI ARGUETA-CHUN, age 25, a native of Guatemala, was sentenced today after previously pleading guilty to a one-count indictment for illegal reentry of a removed alien.
United States District Court Judge Jay C. Zainey sentenced ARGUETA-CHUN to time served(2 months of imprisonment), followed by 1 year of supervised release, and a $100 special assessment fee. The defendant will be surrendered to the custody of Immigration and Customs Enforcement for removal proceedings.
According to court documents, on July 19, 2018, ARGUETA-CHUN was found in the United States after having been previously removed from the United States on March 30, 2016.
U.S. Attorney Strasser praised the work of Immigration and Customs Enforcement agents in investigating this matter. Assistant United States Attorney Jon Maestri is in charge of the prosecution.
Grand Jury Returns Criminal Immigration IndictmentsRead the Press Release
WICHITA, KAN. – A federal grand jury today returned a series of criminal indictments in separate cases charging defendants with unlawfully re-entering the United States after being deported, U.S. Attorney Stephen McAllister said.
Jose Rafael Gutierrez-Yanez, 27, a citizen of Mexico, was charged with one count of unlawfully re-entering the United States after being deported. The indictment alleges he has been deported four times. He was found in March 2018 in Sumner County, Kan.
If convicted, he faces up to 10 years in federal prison. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Debra Barnett is prosecuting.
Cruz Diaz-Carballo, 34, who is not a U.S. citizen, is charged with unlawfully re-entering the United States after being deported. The indictment alleges he was deported three times. He was found Aug. 13, 2018, in Johnson County, Kan.
If convicted, he faces up to two years in federal prison. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
Otilio Benitez-Acquirre, 39, who is not a U.S. citizen, is charged with unlawfully re-entering the United States after being deported. The indictment alleges he was deported two times. He was found Aug. 7, 2018, in Johnson County, Kan.
If convicted, he faces up to two years in federal prison. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
Jose Fernandez-Casas, 45, a citizen of Mexico, was charged with one count of unlawfully re-entering the United States after being deported. He was found in August 2018 in Pratt County, Kan.
If convicted, he faces up to two years in federal prison. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Debra Barnett is prosecuting.
Roberto Sanchez-Salas, 49, a citizen of Mexico, was charged with one count of unlawfully re-entering the United States after being deported. He was found in September 2018 in Ellis County, Kan.
If convicted, he faces up to two years in federal prison. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Debra Barnett is prosecuting.
OTHER INDICTMENTS
Six men from Mexico were charged with drug trafficking. The indictment alleges the men conspired to distribute hundreds of pounds of marijuana. They were arrested Aug. 23, 2018, in Shawnee County, Kan.
The following defendants are charged with one count of conspiracy and one count of possession with intent to distribute marijuana:
Rene Josefat Yanez Coronado, 31, Hermosillo, Mexico.
Cesar Ignacio Valencia Casillas, 19, Hermosillo, Mexico.
Carlos Gabriel Rubal Nieblas, 20, Hermosillo, Mexico.
Angel Joel Gallegos Oviedo, 23, Hermosillo, Mexico.
Eduardo Antonio Mijangos Loustaunau, 18, Hermosillo, Mexico.
Jesus Antonio Mijangos Loustaunau, 26, Lopes Del Castillo, Mexico.
If convicted, they face a penalty of not less than five years and not more than 40 years and a fine up to $5 million on each count. The Kansas Highway Patrol and the Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Skip Jacobs is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Georgia Man Sentenced for Compromising U.S. Army Computer ProgramRead the Press Release
GREENVILLE – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that today, Senior United States District Judge Malcom J. Howard, sentenced MITTESH DAS, 49, of Atlanta, Georgia, to 24 months of imprisonment followed by 3 years of supervised release and ordered to pay 1.5 million dollars in restitution.
On September 20, 2017, a federal jury found DAS guilty of knowingly transmitting malicious code with the intent to cause damage to a U.S. Army computer used in furtherance of national security.
A Grand Jury in the Eastern District of North Carolina indicted DAS on April 5, 2016 for conduct that occurred in 2014.
In November of 2014, a national level computer program responsible for handling pay and personnel actions for nearly 200,000 U.S. Army reservists began experiencing unusual issues. Five of the servers associated with the program are located at Ft. Bragg, North Carolina. Standard internal troubleshooting uncovered suspicious code that led to an investigation by the Army’s Criminal Investigation Command (CID). The investigation revealed that in 2012, due to DAS’s vast experience with the system, the contracted company responsible for oversight of the computer system had subcontracted with DAS to assume lead responsibility for the system. However, the contract was subsequently re-bid and awarded to a different company with a hand-over date of November 24, 2014. The investigation revealed that DAS inserted malicious code - commonly referred to as a “logic bomb” – in the days leading up to the contract changeover and that the progressively destructive nature of this code began taking effect the day after the changeover.
The damage had to be corrected through removal of the malicious code, restoration of all information and features, and a thorough review of the entire system to locate any further malicious code, amounting to a total labor cost to the U.S. Army of approximately $2.6 million.
The case was investigated by U.S. Army Criminal Investigation Command, which received assistance from the Department of Homeland Security and the Johns Creek, Georgia, Police Department. Assistant United States Attorney Jason Kellhofer represented the government in this case.
"Mr. Das exploited his position as a cleared defense contractor to sabotage the U.S. Army Reserve's personnel system and disrupt pay to our nation's Soldiers," said Director Daniel Andrews of the Computer Crime Investigative Unit, U.S. Army Criminal Investigation Command. "Cybercrime and insider threats present significant challenges to national security and military operations, and today's sentencing serves as a stark reminder that we will continue to preserve strategic readiness by bringing violators to justice."
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina remarked that, “We are strong supporters of the brave work accomplished by the United States Army Reserve Command and are honored to have been able to hold this criminal accountable for the harmful attack on what is much more than just a computer system. The cyber attack in this instance directly affected thousands of Army reservists. Such conduct will be prosecuted to the fullest extent of the law by this office.”
FourWinds C.E.O. Stanley Bates Sentenced to 15 Years in Federal PrisonRead the Press Release
In San Antonio today, a federal judge sentenced former FourWinds Chief Executive Officer Stanley P. Bates to
15 years in federal prison, announced U.S. Attorney John F. Bash, Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division, and Internal Revenue Service-Criminal Investigation Special Agent in Charge D. Richard Goss, Houston Field Office.
In addition to the prison term, Senior U.S. District Judge David A. Ezra ordered that Bates pay $6,345,414 million restitution and be placed on supervised release for a period of three years after completing his prison term.
“Today Mr. Bates received a just punishment for the fraudulent scheme he orchestrated. Like all such schemes, the FourWinds plot, stripped to its core, was simply an effort to steal money belonging to other people,” stated U.S. Attorney Bash.
On January 8, 2018, Bates pleaded guilty to eight separate federal charges including securities fraud and money laundering stemming from a Ponzi scheme that defrauded investors out of millions of dollars. In February, a jury found Bates’s co-defendants, former District 19 Texas State Senator Carlos Uresti and FourWinds Logistics, Inc., (FourWinds) consultant Gary L. Cain, guilty on all charges for their roles in the scheme. In June, Judge Ezra sentenced Uresti and Cain to 12 years in federal prison and 68 months in federal prison, respectively. Judge Ezra also ordered that Uresti and Cain pay, jointly and severally, over $6.3 million in restitution.
Evidence presented during trial revealed that from February 2014 to December 2015, the defendants developed an investment Ponzi scheme to buy and sell hydraulic fracturing (fracking) sand for oil production. Evidence showed that the defendants made false statements and representations while soliciting investors in FourWinds. Collected funds were then used to pay earlier investors and for personal expenses including gifts, travel, luxury automobiles, controlled substances, and to hire prostitutes. Evidence and testimony also revealed that Uresti, Cain and Bates engaged in money laundering with the proceeds of wire fraud.
The FBI’s Public Corruption Task Force is conducting this investigation. The Task Force is comprised of investigators from the FBI, IRS-CI, Texas Department of Public Safety (DPS) and the Peace Corps-Office of Inspector General. Assistant U.S. Joseph E. Blackwell, William R. Harris, Mark Roomberg, Erica Giese and Sean O’Connell are prosecuting this case on behalf of the Government.
Former Tennessee Constable Sentenced to 10 Years for Illegally Distributing Opioids in KentuckyRead the Press Release
PIKEVILLE, Ky. — Bobby Roy Justice, 67, of Dandridge, Tennessee, and formerly of Pikeville, was sentenced yesterday to 10 years in federal prison, by Chief United States District Judge Karen K. Caldwell, for conspiring to distribute oxycodone pills. Justice was also ordered to pay a $60,000 fine.
A federal investigation into Justice revealed that, over a five-year period, Justice imported over 90,000 oxycodone pills, from suppliers in Florida, to the Pike County area for distribution. During one of the trips, the Kentucky State Police found Justice in possession of hundreds of pills and a firearm. Justice also used others to distribute pills on his behalf. Justice pled guilty to the charges against him in May of 2018.
Prior to his indictment, Justice was serving as a constable in Dandridge, Tennessee. He has since resigned that post.
Under federal law, Justice must serve 85 percent of his prison sentence, and, upon release, will be under the supervision of the United States Probation Office for three years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Chris Evans, Special Agent in Charge, Drug Enforcement Administration; Amy Hess, Special Agent in Charge of the FBI; Richard Sanders, Kentucky State Police Commissioner, Derrick House, Chief of the London Police Department; and Carson Williams, Chief of the Dandridge Police Department jointly made the announcement. The United States was represented by Assistant United States Attorney Andrew H. Trimble.
Former Nike Salesman Sentenced to 13 Months in Prison for Selling Discounted Merchandise to Own CompaniesRead the Press Release
PORTLAND, Ore. – David Reichert, 51, of St. Louis, Missouri, was sentenced today to 13 months in federal prison for using his position as a Nike salesman to procure heavily-discounted Nike-brand merchandise for resale by two companies he co-owned with a business partner.
According to court documents, as a Nike Inc. salesman and wholesale account executive, Reichert sold licensed apparel—Nike-brand clothes and accessories emblazoned with team names and logos—to retailers throughout the Midwest. Reichert was authorized to give discounts to his customers on the listed wholesale prices of various merchandise. Such discounts rarely totaled more than 20% for even the largest and most important customers.
In 2008, Reichert and a business partner bought a sportswear retailer in the St. Louis area called Fan-a-Mania, Inc. and incorporated a second called JJL Sports Inc. Fan-a-Mania was a longtime Nike customer whose wholesale account was managed by Reichert. Reichert managed the wholesale accounts of both companies without disclosing his ownership interests to his superiors at Nike. By 2012, Reichert was giving extraordinary and unauthorized discounts averaging more than 57% to both companies—and thus to himself.
Reichert’s discounts for his own companies were nearly three times the discounts extended to any of the 25 other wholesale accounts he managed for Nike. In total, Reichert’s embezzlement of licensed Nike-brand merchandise cost the company more than $769,000. In imposing sentence, Senior U.S. District Judge Robert E. Jones emphasized the greed underlying Reichert’s conduct and ordered him to pay full restitution to Nike.
Reichert previously pleaded guilty to two counts of wire fraud on April 25, 2018.
Nike Inc. extensively investigated these crimes before reporting them to the FBI. The FBI then independently investigated the matter. It was prosecuted by Ryan W. Bounds, Assistant U.S. Attorney for the District of Oregon.
Former Museum Business Manager Sentenced for Wire FraudRead the Press Release
BOSTON – The former business manager of a local museum was sentenced yesterday in federal court in Worcester for embezzling funds from the museum that employed her.
Jennifer Delorey McNamara, 36, of Clinton, was sentenced by U.S. District Court Judge Timothy S. Hillman to 20 months in prison, three years of supervised release, and ordered to pay restitution of $754,000. In April 2018, McNamara pleaded guilty to wire fraud.
McNamara began working for the Museum of Russian Icons on a part-time basis in mid-2010. In 2012, the Museum promoted McNamara to full-time Business Manager. From approximately 2012 through October 2015, McNamara embezzled hundreds of thousands of dollars from the Museum by, amongst other means, failing to deposit cash received by the Museum into the Museum bank account and by repeatedly issuing unauthorized payments to herself from the Museum and depositing those payments into her personal account.
The Museum referred the matter to federal authorities when it became aware of the scope of McNamara’s theft and cooperated with federal investigators throughout the resulting investigation.
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. Assistant U.S. Attorney Greg A. Friedholm, Chief of Lelling’s Worcester Branch Office, prosecuted the case.
Former Fayette County Horse Farm Manager Pleads Guilty in Fraud SchemeRead the Press Release
Memphis, TN – A local man has pleaded guilty plea to a one count criminal information charging him with wire fraud in connection with the theft of approximately $810,000 from his former employer, Masterson Farms and Kenneth Masterson. D. Michael Dunavant, United States Attorney for the Western District of Tennessee announced the guilty plea announced today.
According to the information presented in court, Zachary M. Baker, 32, was hired to manage Masterson Farms a horse-breeding farm located in Somerville, Tennessee. Beginning in January 2013, Baker began stealing from Masterson Farms by writing checks payable to himself, Zigadoo Money clips, a band he managed, and another individual identified as "E.L.M." Baker also stole funds by making online payments on his personal credit card accounts with funds transferred from the Masterson Farms bank accounts. Between January 2013, and April 9, 2018, the information alleged that Baker stole over $810,000.
U.S. Attorney D. Michael Dunavant said, "Financial fraud can happen anywhere, and can be devastating to local businesses. The defendant used his position of trust and authority to steal proceeds for his personal benefit, and his dishonesty has been exposed. Wherever fraud occurs in the Western District of Tennessee, this office will be prepared to hold offenders accountable."
Baker faces up to 20 years’ imprisonment; a $250,000 fine and 3 years supervised release on the wire fraud charge.
Baker is scheduled to be sentenced before United States District Court Judge Sheryl H. Lipman on December 20, 2018, at 9:00 a.m.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Carroll L. André III is prosecuting this case on the government’s behalf.
Former Executive of Loyal Bank Ltd Pleads Guilty to Conspiring to Defraud the United States by Failing to Comply with Foreign Account Tax Compliance Act (FATCA)Read the Press Release
Earlier today in federal court in Brooklyn, Adrian Baron, the former Chief Business Officer and former Chief Executive Officer of Loyal Bank Ltd, an off-shore bank with offices in Budapest, Hungary and Saint Vincent and the Grenadines, pleaded guilty to conspiring to defraud the United States by failing to comply with the Foreign Account Tax Compliance Act (FATCA). Baron was extradited to the United States from Hungary in July 2018. The guilty plea was entered before United States District Judge Kiyo A. Matsumoto.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the guilty plea. Mr. Donoghue thanked the U.S. Securities and Exchange Commission (SEC), both the New York Regional Office and the Washington, D.C. Office; the City of London Police; the U.K.’s Financial Conduct Authority and the Hungarian National Bureau of Investigation for their significant cooperation and assistance during the investigation.
FATCA is a federal law enacted in 2010 that requires foreign financial institutions to identify their U.S. customers and report information (FATCA Information) about financial accounts held by U.S. taxpayers either directly or through a foreign entity. FATCA’s primary aim is to prevent U.S. taxpayers from using foreign accounts to facilitate the commission of federal tax offenses.
According to court documents, in June 2017, an undercover agent met with Baron and explained that he was a U.S. citizen involved in stock manipulation schemes and was interested in opening multiple corporate bank accounts at Loyal Bank. The undercover agent informed Baron that he did not want to appear on any of the account opening documents for his bank accounts at Loyal Bank, even though he would be the true owner of the accounts. Baron responded that Loyal Bank could open such accounts and provide debit cards linked to them.
In July 2017, the undercover agent again met with Baron and described how his stock manipulation scheme operated, including the need to circumvent the IRS’s reporting requirements under FATCA. During the meeting, Baron stated that Loyal Bank would not submit a FATCA declaration to regulators unless the paperwork indicated “obvious” U.S. involvement. Subsequently, in July and August 2017, Loyal Bank opened multiple bank accounts for the undercover agent. At no time did Baron or Loyal Bank request or collect FATCA Information from the undercover agent.
Baron’s guilty plea represents the first-ever conviction for failing to comply with FATCA. When sentenced, Baron faces a maximum of five years in prison.
Baron is the second defendant to plead guilty in this case. On July 26, 2018, Arvinsingh Canaye, formerly the General Manager of Beaufort Management Services Ltd. in Mauritius, pleaded guilty to conspiracy to commit money laundering.
The case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn M. Kasulis, Michael T. Keilty and David Gopstein are in charge of the prosecution. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.The Defendant:
ADRIAN BARON
Age: 63
Residence: Budapest, HungaryE.D.N.Y. Docket No. 18-CR-102 (S-1) (KAM)
Former Erie Store Owner Sentenced to Prison, Ordered to Pay more than $1.7M in Restitution for Food Stamp FraudRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, has been sentenced in federal court to 21 months in jail and ordered to make $1,739,676.71 in restitution on his conviction of conspiracy to defraud the United States, United States Attorney Scott W. Brady announced today.
United States District Judge David S. Cercone imposed the sentence on Nureden Jibul, 34.
Nureden Jibul and two co-defendants were all engaged in food stamp fraud primarily involving exchanging food stamps for cash. Nureden also enlisted another co-defendant to submit a fraudulent application for a food stamp license so that the food stamp terminals in use at the convenience stores owned and operated by Nuerden Jibul and a co-defendant would not be in their names. Nureden and his co-defendants then used the food stamp terminals at locations where they were not authorized.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
United States Attorney Brady commended the United States Department of Agriculture, Office of Inspector General, the Erie Police Department, the Department of Homeland Security Investigations and the Internal Revenue Service, Criminal Investigation for the investigation leading to the successful prosecution of Jibul.
Former East Chicago Councilman Sentenced to 20 Years in PrisonRead the Press Release
HAMMOND –Robert Battle, age 45, of East Chicago, Indiana, was sentenced by U.S. District Court Judge Philip P. Simon on his guilty plea of discharging a firearm in relation to a drug trafficking crime, causing death of another person, announced U.S. Attorney Kirsch.
Battle was sentenced to 240 months in prison followed by 2 years of supervised release.
U.S. Attorney Kirsch said, “Mr. Battle was a drug dealer, while at the same time serving as a public official. He was elected to uphold the law and instead conspired to break it. Today’s sentence reflects the seriousness of his offense and should be a warning to others who want to engage in these type of violent crimes.”
According to documents filed in the case, in or around April 2015 agents began investigating Battle in relation to drug trafficking activities. During the investigation, agents received information that Reimundo Camarillo was supplying Battle, a sitting East Chicago Councilman, with large quantities of drugs. In September 2015, agents determined Battle may have had a load of drugs and conducted a traffic stop seizing a quantity of drugs and cash. Working with agents, Battle then attempted to make a controlled delivery to Camarillo who did not show after Battle’s arrest. On October 12, 2015 Battle and Camarillo had an argument outside of Battle’s residence where Battle shot Camarillo in the back, killing him.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; East Chicago Police Department; and Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys David J. Nozick and Thomas M. McGrath.
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Former Director of Detroit Technology Office Sentenced to Prison for BriberyRead the Press Release
The former Director of the City of Detroit’s Office of Departmental Technology Services (DTS) was sentenced today to 20 months in prison, to be followed by two years of supervised release, for accepting more than $29,500 in bribe payments from two information technology companies providing services and personnel to the City of Detroit.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Division made the announcement.
Charles L. Dodd, 48, of Canton, Michigan, previously pleaded guilty in the U.S. District Court for the Eastern District of Michigan to one count of federal program bribery. U.S. District Judge Robert H. Cleland of the Eastern District of Michigan presided over the sentencing.
According to admissions made in connection with his plea, Dodd held numerous supervisory positions with the City of Detroit, culminating with his appointment as Director of DTS in 2014. In those positions, Dodd exercised supervisory authority over a staff of dozens of city employees and contractors, and held substantial influence over the administration of multi-million-dollar contracts between the City of Detroit and private information technology companies.
Dodd admitted that between 2009 and 2016, he accepted cash payments totaling more than $15,000 and a trip to North Carolina, among other things of value, from Parimal D. Mehta, 55, of Northville, Michigan, who was then the president and chief executive officer of an information technology company. During that same time period, Dodd also accepted more than $14,500 in cash payments from the chief executive officer and an employee of another information technology company. In return for these cash payments and other things of value, Dodd agreed to provide preferential treatment to the companies, he admitted.
This case was investigated by the FBI’s Detroit Division. Trial Attorneys Robert J. Heberle and James I. Pearce of the Criminal Division’s Public Integrity Section prosecuted the case.
Former Crop Insurance Agent Sentenced to 60 Months for Crop Insurance FraudRead the Press Release
LEXINGTON, Ky. – Debra Muse, 63, of Wallingford, Ky., was sentenced today to 60 months in federal prison, by United States District Judge Joseph M. Hood, for conspiracy to commit crop insurance fraud and crop insurance fraud. Muse was also ordered to pay $1,656,275 in restitution.
Muse pleaded guilty on April 16, 2018, and admitted to urging and assisting co-conspiring farmers to file false tobacco crop insurance claims with the Federal Crop Insurance Corporation (“FCIC”), with the intent to help the farmers obtain crop insurance proceeds to which they were not entitled. These crop insurance claims contained falsified reports of tobacco production. Muse, a crop insurance agent and employee at Clay’s Tobacco Warehouse during the period in question, admitted that she created multiple false documents, including Clay’s Tobacco Warehouse sale bills and shipping reports, to help farmers hide their crop production from their insurance adjusters and falsify the quality of the tobacco. These documents, which misrepresented the volume and quality of the farmers’ crop production, led to inflated payments from the farmers’ crop insurers, which are reinsured by the federal government.
Judge Hood found that, as a result of Muse’s fraud, she caused the federal government to pay out $5,917,515 in crop insurance indemnity payments to agricultural producers to which they were not entitled. The agricultural producers included Muse’s clients and the clients of other insurance agents, who used falsified documents Muse created in filing their own fraudulent insurance claims.
“Protecting limited public resources and the integrity of our public insurance programs are priorities for our Office and the Department of Justice,” stated United States Attorney Robert M. Duncan, Jr. “The Defendant’s participation in this unlawful scheme to falsify documents resulted in significant losses to the FCIC. Her participation was instrumental to the scheme’s success and her criminal conduct harmed the integrity of the crop insurance system. We will continue to prioritize similar efforts to prosecute those who prey on public programs and appropriate taxpayer funds.
Under federal law, Muse must serve 85 percent of her prison sentence; upon her release, she will be under the supervision of the United States Probation Office for five years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Karen Citizen-Wilcox, Special Agent in Charge, United States Department of Agriculture Office of Inspector General; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; Christopher Altemus, Special Agent in Charge, Internal Revenue Service-Criminal Investigation; and Dwayne Depp, Director, Kentucky Department of Insurance Fraud Investigation Division, jointly announced the sentence. Assistant United States Attorneys Kathryn M. Anderson and Erin M. Roth represented the United States.
Five Western Slope Defendants Sentenced for Various Roles in Methamphetamine and Cocaine Drug TraffickingRead the Press Release
DENVER – Five defendants have been ordered in the past 48 hours to serve prison sentences for their respective roles in the distribution of methamphetamine and cocaine, U.S. Attorney Bob Troyer and DEA Denver Division Special Agent in Charge William T. McDermott announced. Four remaining defendants have sentencing hearings pending.
Colorado Chief U.S. District Court Judge Marcia S. Krieger, sitting in Grand Junction on September 10 and September 11th, 2018, sentenced:
- Sean Herrera, age 46, to serve 96 months in federal prison, followed by 5 years on supervised release;
- Sergio Gonzalez-Lomeli, age 23, to serve 60 months in federal prison, followed by 4 years on supervised release;
- Brandon Latgiue, age 40, to serve 9 months in federal prison, followed by 3 years on supervised release;
- Ricardo Morales, age 36, to serve 78 months in federal prison, followed by 5 years on supervised release;
- Karinda Sills, age 52, to serve 120 months in federal prison, followed by 5 years on supervised release;
According to court documents, in April 2016, the Glenwood Springs branch of DEA began investigating drug trafficking occurring in Garfield and Mesa Counties. This investigation involved surveillance of targets, controlled purchases of methamphetamine, and wiretaps of telephones and Facebook accounts. The investigation ultimately revealed that Paul Hernandez Contreras was a California source of supply for methamphetamine and cocaine who would bring large quantities of narcotics from California to Colorado. Daniel Tapia-Morales was a distributor for Hernandez Contreras and Tapia-Morales had his own customer base. In addition to drug trafficking, many individuals in the investigation would trade firearms for narcotics. Ultimately, over 3 kilograms of methamphetamine and ½ kilogram of cocaine were seized, as well as firearms and thousands of dollars. The investigation resulted in the indictment of ten individuals, to include the five mentioned above and Tapia-Morales.
Special Agent In Charge Tim McDermott stated, “This case demonstrates the importance of DEA’s relationship with State and Local Task Forces, such as the Two Rivers Drug Enforcement Team (TRIDENT), in order to dismantle and disrupt drug trafficking organizations responsible for poisoning our communities through the sale of methamphetamine, cocaine and firearms.”
This case was investigated by the DEA Denver Division and TRIDENT, including agents in Mesa and Garfield Counties. TRIDENT is a multi-jurisdictional drug task force funded through Federal, State and Local government funding sources. The defendants were prosecuted by Assistant U.S. Attorneys Celeste Rangel and Jeremy Chaffin.
Financial Advisor Pleads Guilty to Money Laundering Charge in Connection with Bribery Scheme Involving Ecuadorian OfficialsRead the Press Release
A U.S.-based financial advisor pleaded guilty today for his role in an international money laundering conspiracy involving the proceeds of a scheme to pay bribes to officials of Ecuador’s state-owned and state-controlled energy company, Empresa Pública de Hidrocarburos del Ecuador (PetroEcuador).
U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Acting Special Agent in Charge Kelly Jackson of IRS Criminal Investigation’s (IRS-CI) Washington, D.C. office made the announcement.
Jose Larrea, 40, a U.S. citizen who lives in Miami, Florida, pleaded guilty in Miami before U.S. District Judge Marcia G. Cooke of the Southern District of Florida to one count of conspiracy to commit money laundering. He is scheduled to be sentenced on Nov. 14, by Judge Cooke.
According to his admissions at the plea hearing, Larrea conspired with his co-defendant, Frank Roberto Chatburn Ripalda (Chatburn), 40, a dual U.S. and Ecuadorian citizen who also lives in Miami, and others to conceal the proceeds of an unlawful scheme, namely to pay bribes to PetroEcuador officials. Larrea admitted to participating in the money laundering scheme by wiring more than $1 million from his own U.S.-based bank account to several U.S.-based bank accounts. Those wire transfers were made to conceal a bribery scheme involving an oil services contractor who made payments to PetroEcuador officials in an effort to retain existing contracts and win new business with PetroEcuador. Larrea further admitted that he created false and back-dated documents on behalf of the oil services contractor.
Larrea is the fourth individual to plead guilty in this case. In addition to Larrea, two former officials of PetroEcuador who received bribe payments and the contractor described above have previously pleaded guilty to date in connection with the government’s ongoing investigations into the PetroEcuador bribery and money laundering schemes.
Chatburn was charged in the same indictment on April 19, with one count of conspiring to violate the Foreign Corrupt Practices Act (FCPA), one count of violating the FCPA, one count of conspiring to commit money laundering and two counts of money laundering. Chatburn has pleaded not guilty, and his trial is currently set for Oct. 15.
All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s International Corruption Squad in Miami and IRS-CI are investigating the case. Assistant Chief Lorinda Laryea and Trial Attorneys David Fuhr and Katherine Raut of the Criminal Division’s Fraud Section, Trial Attorneys Randall Warden and Mary Ann McCarthy of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorneys Karen Rochlin and Nalina Sombuntham of the Southern District of Florida are prosecuting the case.
The U.S. Marshals Service and the Criminal Division’s Office of International Affairs has provided significant assistance by obtaining key evidence in this case, as have public authorities in, among other countries, Ecuador, Panama and the Cayman Islands.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.
Financial Advisor Pleads Guilty to Money Laundering Charge in Connection with Bribery Scheme Involving Ecuadorian OfficialsRead the Press Release
A U.S.-based financial advisor pleaded guilty today for his role in an international money laundering conspiracy involving the proceeds of a scheme to pay bribes to officials of Ecuador’s state-owned and state-controlled energy company, Empresa Pública de Hidrocarburos del Ecuador (PetroEcuador).
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida and Acting Special Agent in Charge Kelly Jackson of IRS Criminal Investigation’s (IRS-CI) Washington, D.C. office made the announcement.
Jose Larrea, 40, a U.S. citizen who lives in Miami, Florida, pleaded guilty in Miami before U.S. District Judge Marcia G. Cooke of the Southern District of Florida to one count of conspiracy to commit money laundering. He is scheduled to be sentenced on Nov. 14, by Judge Cooke.
According to his admissions at the plea hearing, Larrea conspired with his co-defendant, Frank Roberto Chatburn Ripalda (Chatburn), 40, a dual U.S. and Ecuadorian citizen who also lives in Miami, and others to conceal the proceeds of an unlawful scheme, namely to pay bribes to PetroEcuador officials. Larrea admitted to participating in the money laundering scheme by wiring more than $1 million from his own U.S.-based bank account to several U.S.-based bank accounts. Those wire transfers were made to conceal a bribery scheme involving an oil services contractor who made payments to PetroEcuador officials in an effort to retain existing contracts and win new business with PetroEcuador. Larrea further admitted that he created false and back-dated documents on behalf of the oil services contractor.
Larrea is the fourth individual to plead guilty in this case. In addition to Larrea, two former officials of PetroEcuador who received bribe payments and the contractor described above have previously pleaded guilty to date in connection with the government’s ongoing investigations into the PetroEcuador bribery and money laundering schemes.
Chatburn was charged in the same indictment on April 19, with one count of conspiring to violate the Foreign Corrupt Practices Act (FCPA), one count of violating the FCPA, one count of conspiring to commit money laundering and two counts of money laundering. Chatburn has pleaded not guilty, and his trial is currently set for Oct. 15.
All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s International Corruption Squad in Miami and IRS-CI are investigating the case. Assistant Chief Lorinda Laryea and Trial Attorneys David Fuhr and Katherine Raut of the Criminal Division’s Fraud Section, Trial Attorneys Randall Warden and Mary Ann McCarthy of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorneys Karen Rochlin and Nalina Sombuntham of the Southern District of Florida are prosecuting the case.
The U.S. Marshals Service and the Criminal Division’s Office of International Affairs has provided significant assistance by obtaining key evidence in this case, as have public authorities in, among other countries, Ecuador, Panama and the Cayman Islands.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Final Defendant Sentenced in 'Foreclosure Rescue' SchemeRead the Press Release
DALLAS -- The final defendant in a high-profile north Texas “foreclosure rescue” case has been sentenced for his role in the scheme, which swindled nearly a quarter of a million dollars from at least 70 homeowners facing foreclosure, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Real Estate Solutions owner Mark Demetri Stein, 38, of Carrollton, Texas – who pleaded guilty in April to one count of mail fraud – was sentenced to six years in prison and ordered to pay $215,138 in restitution to homeowner victims.
According to documents filed in the case, from Feb. 2012 to Jan. 2013, Stein and three co-conspirators used third parties to contact vulnerable homeowners, offering them an opportunity to get out of their present home loans and receive new, cheaper loans with lower interest and reduced monthly payments.
They lied to desperate homeowners, telling them “investors” were standing by, ready to purchase homeowners’ loans from their original lenders at a greatly reduced price through a “short sale” process, and suggesting homeowners had the legal authority to transfer their deeds to a foreclosure rescue company. Then, although they knew they would not legally own the property, Stein and his co-defendants assured homeowners a foreclosure rescue company could “sell” the property back to the homeowner with a new loan.
There were no investors. The defendants simply pocketed funds collected from these defrauded homeowners.
They issued fraudulent new “loans” requiring hefty down payments, demanded the homeowners sign fraudulent documents, and directed homeowners to start making all future loan payments to them.
As they continued to collect these so-called “mortgage payments,” they instructed homeowners to ignore notices of late- and non-payment from other lenders. In order to further conceal their criminal conduct, they even advised several homeowners file bankruptcy in order to forestall foreclosure.
The three other defendants, Christina Renee Caveny, 37, Richard Bruce Stevens, 53, and Bruce Kevin Hawkins, 54, also pleaded guilty and were sentenced for felony offenses stemming from the scheme. (Caveny was sentenced to 15 months in prison in November 2017. The following month, Hawkins was sentenced to 41 months. Late last month, Stevens was sentenced to 41 months.)
The case was brought as part of the Northern District of Texas’ Bankruptcy Fraud Initiative. Since May 2013, the initiative has prompted a significant increase in the number of felony prosecutions of bankruptcy-related crimes in north Texas. A total of 27 defendants – each prosecuted due to criminal referrals from the United States Trustee’s Office – have been charged and convicted.
The Federal Bureau of Investigation’s Dallas Division conducted the investigation, and Assistant U.S. Attorney David Jarvis prosecuted the case.
Federal Jury Convicts Holly Springs Man on Federal Drug and Firearms ChargesRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that, HOWARD DAVIS, 40, of Holly Springs, NC, was convicted in federal court following a day and a half jury trial before Chief United States District Judge James C. Dever III. The jury found DAVIS guilty of possession with the intent to distribute 28 grams or more of cocaine base, and a quantity of cocaine, both Schedule II controlled substances, possession of a firearm in furtherance of a drug trafficking crime, and felon in possession of a firearm.
The evidence presented at trial established that DAVIS was pulled over for a window tint violation and while the officer was verifying DAVIS’s information, he fled the scene. This resulted in a high-speed chase within a residential neighborhood until DAVIS exited his car and fled on foot into a swamp. The investigation resulted in the seizure of over 28 grams of cocaine base and 178 grams crack cocaine, $67,288.00 and a firearm.
Sentencing is set for December 10, 2018 term of court. DAVIS faces not less than 25 years imprisonment and up to life imprisonment followed by 8 years of supervised release and up to an 8.5 million dollar fine.
The case was investigated by the Holly Springs Police Department and Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). Assistant United States Attorney Gabriel Diaz and Jason Kellhofer prosecuted the case on behalf of the United States.
Federal Grand Jury Indicts Amalia Compound Defendants on Firearms and Conspiracy ChargesRead the Press Release
ALBUQUERQUE – A federal grand jury sitting in Albuquerque, N.M., has indicted Jany Leveille, 35, Siraj Ibn Wahhaj, 40, Hujrah Wahhaj, 37, Subhanah Wahhaj, 35, and Lucas Morton, 40, on firearms and conspiracy charges, announced U.S. Attorney John C. Anderson and Special Agent in Charge James C. Langenberg of the FBI’s Albuquerque Division.
The indictment, which was filed this afternoon, charges the five defendants, residents of a compound in Amalia, in Taos County, N.M., with conspiring knowingly to provide an alien illegally and unlawfully in the United States, possession of firearms and ammunition. The indictment also charges Leveille, a Haitian national illegally and unlawfully in the United States, with possession of firearms and ammunition.
The conspiracy charge alleges that the defendants conspired to provide Leveille, an alien unlawfully in the United States, with firearms and ammunition from at least Nov. 2017 through Aug. 2018. The indictment alleges that, as part of the conspiracy, the defendants transported firearms and ammunition from Georgia to New Mexico in Dec. 2017. The indictment further alleges that, between Dec. 2017 and Aug. 2018, the defendants established a training camp and firing range in Taos County, where they stored firearms and ammunition and engaged in firearms and tactical training as part of their common plan to prepare for violent attacks on government, military, educational, and financial institutions.
The FBI arrested the defendants on Aug. 31, 2018, on a federal criminal complaint that charged Leveille with being an alien unlawfully in possession of firearms and ammunition. The complaint also charged Leveille’s four co-defendants with aiding and abetting her in committing the offense, and with conspiring with her to commit the offense.
The defendants are scheduled to appear in federal court in Albuquerque at 1:00 pm, tomorrow, Sept. 12, 2018, to be arraigned on the indictment and for detention hearings.
If convicted on the conspiracy charge, the five defendants each face a statutory penalty of five years of imprisonment. If convicted on the firearms charge, Leveille faces a statutory maximum penalty of ten years of imprisonment and deportation upon completion of her sentence. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The Albuquerque Division of the FBI investigated the case, with the assistance of the U.S. Department of Homeland Security, the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Taos County Sheriff’s Office, and the 8th Judicial District Attorney’s Office. Assistant U.S. Attorneys George C. Kraehe and Kimberly A. Brawley are prosecuting the case.
Leveille IndictmentFayette County Felon Illegally Possessed 5 Firearms and 4,000 Rounds of AmmoRead the Press Release
PITTSBURGH, PA - A Fayette County resident pleaded guilty in federal court to a violation of the federal firearms laws, United States Attorney Scott W. Brady announced today.
Steven Daniels, age 44, of Wharton Township, pleaded guilty to one count of possession of a firearm by a convicted felon before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that, on January 11, 2018, federal and state law enforcement officers executed a search warrant at Daniels’s residence and recovered five firearms and over 4,000 rounds of ammunition. Based on a prior conviction, Daniels is not permitted to possess a firearm.
Judge Bissoon scheduled sentencing for February 4, 2019, at 10 a.m. The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Adam N. Hallowell is prosecuting this case on behalf of the government.
The Department of Homeland Security – Federal Protective Service conducted the investigation that led to the prosecution of Steven Daniels.
Fargo Man Sentenced to 15 years in Federal Prison for Possession of Child PornographyRead the Press Release
FARGO – United States Attorney Christopher C. Myers announced that on September 10, 2018, Roberto A. Lang, United States District Judge, South Dakota, sitting by designation, sentenced Damian Scott Olvera, age 26, Fargo, ND, on charges of Possession of Materials Containing Child Pornography and Receipt of Materials Containing Child Pornography. Judge Lang sentenced Olvera to serve 15 years in federal prison, to be followed by 15 years supervised release. Olvera was further ordered to pay $200 in special assessments to the Crime Victims’ Fund.
This investigation came to the attention of law enforcement after it received a tip that Olvera had uploaded images to his Gmail account that revealed he was victimizing a minor female. Investigators seized Olvera’s Gmail account and a search of the account resulted in the seizure of multiple files depicting the sexual exploitation of children. Olvera admitted to receiving and possessing child pornography when interviewed by law enforcement.
This case was investigated by the Fargo Police Department, Bureau of Criminal Investigation, and Homeland Security Investigations.
Assistant United States Attorney Jennifer Puhl prosecuted the case.
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Essex County, New Jersey, Couple and Son Charged in Food Stamp SchemeRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, couple and their son have been charged for their respective roles in a food stamps fraud scheme, U.S. Attorney Craig Carpenito announced today.
Juan Perdomo, 59, and his son, Jose Perdomo, 34, both of Newark, are charged by complaint with Supplemental Nutrition Assistance Program (SNAP) benefit fraud and conspiracy to commit wire fraud. The Perdomos and Maria Rodriguez, 58, Juan’s wife and Jose’s mother, were also charged with money laundering conspiracy. All three had their initial court appearances before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to documents filed in this case and statements made in court:
From October 2015 to the present, the defendants managed M&R Supermarket, a small grocery store in Newark, New Jersey, that was authorized to accept benefits provided by SNAP, formerly known as the Food Stamp Program. The program is administered by the U.S. Department of Agriculture. Retail food stores approved for participation in SNAP may sell food in exchange for SNAP benefits. They may not exchange SNAP benefits for cash. While Juan Perdomo and Jose Perdomo run the store, Maria Rodriguez owns the store and is the person registered with SNAP. According to the complaint, M&R Supermarket exchanged more than $5 million in SNAP benefits for cash between 2015 and 2018.
Every SNAP recipient receives an Electronic Benefit Transfer (EBT) card, similar to a debit card, with which to make purchases. Every retailer authorized to accept SNAP benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters a Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction and informs the retailer whether the transaction should be authorized or denied. The amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the amount is credited to the retailer’s designated bank account. In addition to the high volume of SNAP benefits redemptions for M&R Supermarket indicating fraud, law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of an agent working in an undercover capacity who engaged in at least 11 “purchases” at M&R Supermarket where Juan Perdomo or Jose Perdomo exchanged money for SNAP benefits.
The complaint also charges Juan Perdomo, Maria Rodriguez, and Jose Perdomo with conspiring to launder monetary instruments. The bank account of M&R Supermarket, where the store receives SNAP payments, shows numerous cash withdrawals in excess of $10,000 by Juan Perdomo and Maria Rodriguez, as well as several cashed checks in excess of $10,000 by Jose Perdomo.
The counts for SNAP benefit fraud and conspiracy to commit wire fraud against Juan Perdomo and Jose Perdomo carry a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross pecuniary gain/loss. The counts of money laundering against all three defendants carry a maximum penalty of 10 years in prison and a fine of $250,000 or twice the value of the property involved in the transaction.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Agriculture – Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins; U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Brian Michael; IRS-Criminal Investigation, under the direction of Special Agent in Charge John Tafur; and U.S. Secret Service, under the direction of Mark McKevitt, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Leah Gould of the U.S. Attorney’s Office Criminal Division in Newark.
The allegations and charges in the complaint are only accusations and the defendants are considered innocent unless and until proven guilty.
Essex County Man Admits Role in Armed Robbery of Passaic, New Jersey, ClubRead the Press Release
NEWARK, N.J. – An Essex County man today admitted that he participated in a September 2015 gunpoint robbery of a club in Passaic, New Jersey, U.S. Attorney Craig Carpenito announced.
Jimmy Cooper, a/k/a “Flip,” 33, of Irvington, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to a superseding indictment charging him with one count of conspiracy to commit Hobbs Act robbery and one count of Hobbs Act robbery.
According to the indictment, other documents and statements made in court:
In the early morning hours of Sept. 6, 2015, Cooper and two conspirators agreed to rob at gunpoint a club in Passaic. Cooper sent text messages to a conspirator’s phone coordinating the timing of the robbery and discussing how to smuggle the gun into the club. Minutes later, conspirators entered the office of the club, where an employee was alone. They brandished a firearm, threatened to kill the employee, and emptied the contents of an open safe into two purses that were in the office. The robbers ordered the employee to the ground and told him to count to 100 as they lowered the lights and fled in a getaway car stolen by Cooper and one of the robbers less than a week prior. The robbers led the police on a high-speed car chase through Passaic, Newark, and East Orange, New Jersey, abandoning the car in East Orange and fleeing on foot.
The Hobbs Act charges to which Cooper pleaded guilty each carry a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Pursuant to the plea agreement, Cooper faces a sentence of 60 to 70 months in prison. Sentencing is scheduled for Dec. 10, 2018.
Cooper was originally charged with Keontrae Lawrence, a/k/a “Taz,” 30, of South Orange, New Jersey, and Shaheed Blamahsah, a/k/a “Aboo,” 30, of Newark, New Jersey, in November 2016. Both Lawrence and Blamahsah have pleaded guilty for their respective roles in the robbery and have been sentenced to 135 and 150 months in prison, respectively.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and members of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s guilty plea. He also thanked the Passaic County Sheriff’s Office, the Passaic Police Department, and the Newark Police Department for their assistance.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou and Mary E. Toscano of the U.S. Attorney’s Office’s Criminal Division in Newark.
Erie Convenience Store Owner Sentenced to Probation, Ordered to Pay Restitution for Food Stamp Fraud SchemeRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, has been sentenced in federal court to 30 months probation and ordered to make $49,617.00 in restitution on his conviction of theft of government property, United States Attorney Scott W. Brady announced today.
United States District Judge David S. Cercone imposed the sentence on James Hunter, Jr., 39.
According to information presented to the court, from July 2012 to June 2015, Hunter, who was the owner and operator of Melo’s Stop N Shops in Erie, committed food stamp fraud by accepting food stamps and WIC checks for cash or ineligible items such as cigarettes.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
United States Attorney Brady commended the United States Department of Agriculture, Office of Inspector General, Homeland Security Investigations, the Pennsylvania State Police and the Erie Bureau of Police for the investigation leading to the successful prosecution of Hunter.
Eagle Butte Man Indicted on Methamphetamine ChargesRead the Press Release
United States Attorney Ron Parsons announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Conspiracy to Distribute a Controlled Substance and Possession with Intent to Distribute a Controlled Substance.
David Little Wounded, age 35, was indicted on August 13, 2018. He appeared before U.S. Magistrate Judge Mark A. Moreno on September 10, 2018, and plead not guilty to the Indictment.
The maximum penalty upon conviction is up to 40 years in federal prison and/or a $5,000,000 fine, a lifetime of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between April 1, 2016, and August 13, 2018, Little Wounded knowingly and intentionally combined, conspired, confederated, and agreed with persons to knowingly and intentionally distribute and possess with the intent to distribute 50 grams or more of methamphetamine. The Indictment also alleges on or about February 4, 2017, and June 3, 2017, Little Wounded, knowingly and intentionally possessed with the intent to distribute methamphetamine.
The charges are merely accusations and Little Wounded is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force and the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Cameron J. Cook is prosecuting the case.
Little Wounded was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for October 30, 2018.
Dracut Contractor Charged with Bribing Naval Contracting Official in SingaporeRead the Press Release
BOSTON – A Dracut man was arrested today and charged with bribing a United States Navy contracting officer on two occasions in connection with federal construction projects in Singapore.
Hector Sanchez, 52, was charged in an indictment unsealed today with two counts of bribery of a public official. Sanchez made an initial appearance this afternoon in federal court in Boston.
According to the indictment, Sanchez is the President and co-owner of P&S Construction Inc. (P&S), a general contracting corporation headquartered in Chelmsford. It is alleged that Sanchez paid a total of $15,000 to a contracting officer of the Naval Facilities Engineering Command Far East in Singapore (NAVFAC Far East) in exchange for the contracting official’s assistance in circumventing the assessment of liquidated damage against P&S. In recorded conversations between Sanchez and the Naval contracting officer, Sanchez allegedly stated that the liquidated damage assessments would negatively impact P&S’ ability to obtain government contracting work in the future. Subsequently, Sanchez delivered $10,000 in June 2016 and $5,000 in December 2016 to the Naval contracting officer in Singapore while federal agents conducted covert surveillance. During recorded conversations, Sanchez allegedly told the contracting official that P&S was “looking for the LDs [liquidated damages] to go away.” Sanchez also stated, “This is the first time we’re doing something, okay? Let’s keep it up … This is not a onetime deal … This is business.”
The charge of bribery of a federal public official provides for a sentence of no greater than 15 years in prison, three years of supervised release and a fine of $250,000, or three times the monetary equivalent of the bribe, whichever is greater. 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 Leo S. Lamont, Special Agent in Charge, Naval Criminal Investigative Service, Northeast Field Office, made the announcement today. Assistant U.S. Attorney William F. Bloomer of Lelling’s Public Corruption and Special Prosecutions Unit is prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Detroit-Area Podiatrist Sentenced to Prison for Health Care FraudRead the Press Release
A Detroit-area podiatrist was sentenced to 28 months in prison today for his participation in a $1 million scheme involving podiatry services that were billed to Medicare but were never rendered.
Assistant Attorney General Brian A. Benczowski of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Lawrence Young, D.P.M., 70, of Bloomfield Hills, Michigan, was sentenced by U.S. District Judge Judith E. Levy of the Eastern District of Michigan, who also ordered the defendant to serve one year of supervised release following his prison sentence and ordered him to pay $337,907.31 in restitution to HHS and to forfeit the same amount. Young pleaded guilty to one count of health care fraud in January 2018.
As part of his guilty plea, Young admitted that from approximately January 2010 through April 2017, he engaged in a scheme to defraud the Medicare program by causing the submission of false and fraudulent claims to Medicare for the application of an “Unna Boot,” which is a type of medicated dressing typically applied after surgery to control swelling of the leg or foot. Young admitted regularly submitting these claims for reimbursement even though he knew that his patients routinely received nothing more than a non-medicated dressing. The scheme involved the submission of more $1 million in fraudulent claims to Medicare, he admitted.
This case was investigated by the FBI and HHS-OIG. Trial Attorneys Tom Tynan and Steve Scott of the Criminal Division’s Fraud Section are prosecuting the case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.