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10 July 2018
Cranston Man Admits to Social Security Fraud, Opioid Trafficking ChargeRead the Press Release
PROVIDENCE, RI – A Cranston, R.I. man has admitted to collecting thousands of dollars in Social Security Supplemental Security Income (SSI) to which he was not entitled, and attempting to possess a significant quantity of Oxycodone pills with the intent of selling the pills to others.
Raymond Walker, 47, pleaded guilty in U.S. District Court to one count each of Social Security fraud and attempt to possess with the intent to distribute Oxycodone, announced United States Attorney Stephen G. Dambruch, Special Agent in Charge of the Food and Drug Administration Office of Criminal Investigations (FDA-OCI) Jeffrey J. Ebersole, and Scott E. Antolik, Special Agent in Charge of the Social Security Administration Office of Inspector General (SSA-OIG).
According to information presented to the Court, Walker received $500 monthly Supplemental Security Income (SSI) payments. SSI is meant to assist aged, blind, and disabled people who have little to no income. To be eligible, one has to be disabled, unable to engage in substantial gainful activity, and have limited income and resources.
The Social Security Administration takes into account a claimant’s resources and allows an individual to hold up to $2,000 worth of resources. “Income” includes money a claimant receives from work and other sources, such as friends and relatives. The claimant must notify the Social Security Administration of any significant changes in conditions affecting the receipt of benefits, to include work activity, as either an employee or self-employed individual.
According to information presented to the Court, on September 8, 2017, Walker was interviewed by a SSA claims specialist and informed the claims specialist that since July 2015 his only resource was a 1988 vehicle and a bank account with no more than $200 in it at any time. He told the interviewer that he received approximately $200 per month from family members to assist with personal expenses.
However, an investigation by FDA-OCI, SSA-OIG and the United States Attorney’s Office determined that between December 2013 and July 2017, $306,435 was deposited into Walker’s bank account. It was also determined that he owned a 2016 Audi.
As part of the investigation, on October 4, 2017, at the direction of FDA-OCI agents, a cooperating witness met the defendant at his mother’s house in Providence and sold the defendant 2 bottles containing 168 30 mg Oxycodone pills for $5,000. Upon receiving the pills, the defendant emptied the prescription bottles into a bottle of his own. The defendant did not have all the money at once and asked the cooperating witness to return later to receive full payment. When the cooperating witness returned, approximately an hour and a half later, the defendant informed the individual he had already received complaints regarding the strength of the pills.
Indeed, in that hour and a half, agents observed the defendant’s mother’s home and saw numerous individuals stopping in front of the house and engaging with the defendant to purchase the pills.
Walker is scheduled to be sentenced by U.S. District Court Chief Judge William E. Smith on October 26, 2018. Social Security Fraud is punishable by statutory penalties of up to 5 years in federal prison, 3 years supervised release, and a fine of up to $250,000. Attempt to possess with the intent to distribute Oxycodone is punishable by statutory penalties of up to 20 years in federal prison, 3 years supervised release, and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.
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Coffeyville Woman Pleads Guilty in $150,000 Mail FraudRead the Press Release
KANSAS CITY, KAN. – A Coffeyville woman pleaded guilty to stealing $150,000 from a customer at a bank where she worked, U.S. Attorney Stephen McAllister said.
Phyllis Lanning, 61, Coffeyville, Kan., pleaded guilty to one count of mail fraud. She admitted that while she worked for Condon National Bank in Coffeyville, Kan., she created and mailed falsified documents in order to conceal the fact she stole $150,000 from a customer’s account. She diverted legitimate monthly statements to a postal box in Bartlesville, Okla., that she controlled. She prepared counterfeit statements and mailed them to the owner of the account. The theft was discovered after the owner of the account died and family members took control of the account.
Sentencing is set for September 24. She faces a penalty of up to 20 years in federal prison and a fine up to $250,000. McAllister commended the FBI and Assistant U.S. Attorney Alan Metzger for their work on the case.
Clovis Man Pleads Guilty to Distributing and Receiving Child PornographyRead the Press Release
ALBUQUERQUE – Spencer C. Lovato, 26, of Clovis, N.M., pled guilty today in federal court in Albuquerque, N.M., to an indictment charging him with two counts of distributing child pornography and one count of receiving child pornography.
At sentencing, Lovato faces a statutory mandatory minimum penalty of five years and a maximum of 20 years in federal prison. Lovato will also be required to register as a sex offender. Lovato has been in custody since his arrest in April 2017. He will remain detained pending his sentencing hearing, which has yet to be scheduled.
The FBI arrested Lovato in April 2017, on a criminal complaint charging him with child pornography offenses in Dec. 2016, in Curry and San Miguel Counties, N.M. According to the complaint, the investigation leading to Lovato’s arrest began in Dec. 2016, when the FBI received a report about video and image files containing child pornography that were being shared by individuals on an online messaging platform. During the investigation, the FBI obtained two IP addresses, email accounts and telephone account records identifying Lovato as the subscriber of accounts used to distribute and receive child pornography.
Lovato subsequently was charged in a three-count indictment on May 9, 2017, with distributing child pornography on Dec. 27, 2016, in Curry County, and with distributing and receiving child pornography on Jan. 5, 2017, in New Mexico.
During today’s proceedings, Lovato pled guilty to all three counts of the indictment. In entering the guilty plea, Lovato admitted that on Dec. 27, 2016, he sent a message on his phone that included a digital video of a minor involved in sexually explicit conduct. Lovato also admitted that on Jan. 5, 2017, he sent a message and received a message that included digital videos of minors involved in sexually explicit conduct.
This case was investigated by the Santa Fe office of the FBI and the Clovis Police Department. Assistant U.S. Attorney Paul Mysliwiec is prosecuting the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For information about Project Safe Childhood, please visit http://www.justice.gov/psc/. Individuals with information relating to suspected child predators and suspected child abuse are encouraged to contact the Children’s Advocacy Center at (575) 526-3437, or to contact Homeland Security Investigations at 1-866-DHS-2-ICE.
The case also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 86 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Christian County Reserve Deputy Pleads Guilty to Tax FraudRead the Press Release
SPRINGFIELD, Mo. – A reserve deputy sheriff for Christian County, Mo., pleaded guilty in federal court today to tax fraud.
Marty Layne Brickey, 47, of Republic, Mo., pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of failure to pay over to the IRS the payroll taxes he collected from his employees. Under the terms of today’s plea agreement, Brickey has agreed to pay $114,449 in restitution to the IRS and $539,260 in restitution in connection with some investments made to Brickey or his companies.
Brickey has been commissioned as a reserve deputy sheriff in Christian County since 2012. Brickey owned and operated several companies that marketed, promoted and managed software development. Interzone Entertainment, LLC, had offices located in Springfield, Mo., Chicago, Ill., Perth, Australia, Belo Horizonte, Brazil, and in China before it ceased operations in February 2010. Big Collision Games, LLC, had offices in Texas and in Dublin, Ireland. MasterTitle Games, Inc., and Spectacle Games maintained offices in Austin, Texas. Brickey also owned Zoonik USA, Inc., and Studio Avenue, Inc.
By pleading guilty today, Brickey admitted that he voluntarily and intentionally failed to pay over to the IRS $15,031 in payroll taxes tax (including federal income taxes, Medicare and Social Security taxes) that he collected from Interzone employees during the second quarter of 2009. Brickey acknowledged that the total tax loss, including all relevant conduct, is $114,449.
Restitution payments to various investors are related to funds solicited by Brickey to bring a video game to market, which did not come to fruition. Although Brickey will pay restitution to the investors, today’s plea agreement does not constitute any admission of criminal culpability or civil liability on his part, and the government does not allege any criminal culpability with respect to the investments.
Under federal statutes, Brickey is subject to a sentence of up to five years 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. Attorneys Patrick Carney and Casey Clark. It was investigated by IRS-Criminal Investigation and the FBI.
Charlotte Man and His Wife Plead Guilty to Sex Trafficking Three MinorsRead the Press Release
CHARLOTTE, N.C. – Zerrell Ross Fuentes, 24, and his wife, Brianna Leshay Wright, 25, both of Charlotte, appeared in federal court today and pleaded guilty to sex trafficking three minor victims, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
According to filed plea documents and statements made in court, between April 28, 2016 and May 8, 2016, Fuentes, his wife, Brianna Wright, and his mother and indicted co-conspirator, Tanya Marie Fuentes, engaged in the sex trafficking of three minor victims. Zerrell Fuentes admitted in court today that, while he was in jail, he recruited three underage victims, via telephone, to engage in prostitution to earn money for his bond. Zerrell Fuentes arranged for Wright to transport the minor victims from Charlotte to Myrtle Beach, S.C., for the purpose of engaging in commercial sex acts.
According to court records, Brianna Wright, accompanied by Tanya Fuentes, drove the three minors from Charlotte to Myrtle Beach. While in Myrtle Beach, Tanya Fuentes paid for lodging, and Brianna Wright’s phone was used to post prostitution advertisements for the minor victims on the Internet. She also provided her own telephone number on the ads, as a means of communication to arrange “dates” between the minors and customers, and transported the victims to and from the arranged prostitution appointments.
Zerrell Fuentes and Brianna Wright remain in custody. A sentencing date has not been set. Tanya Fuentes is charged with conspiracy to commit sex trafficking, sex trafficking of a minor, conspiracy to transport a minor to engage in prostitution, and transportation of a minor to engage in prostitution. Those charges are still pending.
The penalty for sex trafficking related offenses is a mandatory minimum of 10 years and a maximum of life in prison and a $250,000 fine.
In making today’s announcement U.S. Attorney Murray commended the law enforcement agents and officers from Homeland Security Investigations and the Charlotte Mecklenburg Police Department who are members of the FBI’s Human Trafficking Task Force for their investigation. He also thanked the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives for their assistance in this case.
Assistant U.S. Attorney Kimlani Ford, of the U.S. Attorney’s office in Charlotte, is prosecuting the case.
Business Owner Indicted for Failure to Provide IRS with 1.6 Million Dollars in Payroll TaxesRead the Press Release
Matthew D. Krueger, the United States Attorney for the Eastern District of Wisconsin, announced that Susan Wenszell (age 57) of Milwaukee has been charged in an indictment with failing to pay over payroll taxes withheld from the wages of employees of a business she and her husband operated in Milwaukee.
Specifically, the indictment charges that during the period from April 2012 through December 2015 Ms. Wenszell, who is the president and owner of J. Wenszell Enterprises Inc., failed to pay over the payroll taxes withheld from the wages of the employees of the business. During this period, Ms. Wenszell withheld more than 1.6 million dollars in payroll taxes from employee wages and failed to pay those taxes to the IRS. Each of the offenses with which Ms. Wenszell is charged carries a maximum possible penalty of up to 5 years in prison and a fine of up to $250,000, or both.
This matter was investigated by the IRS Criminal Investigation and is being prosecuted by Assistant United States Attorney Matthew L. Jacobs.
The public is cautioned that an indictment is merely the formal method of issuing charges against an individual. A person is presumed innocent until such time, if ever, as the government establishes his or her guilt beyond a reasonable doubt.
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Birmingham Tax Preparer Sentenced to Five Years in PrisonRead the Press Release
BIRMINGHAM – A federal judge on Monday sentenced a Georgia woman to five years in prison for preparing and filing fraudulent tax returns for other people through her Birmingham-area business between 2009 and 2012, announced U.S. Attorney Jay E. Town and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Thomas J. Holloman.
U.S. District Judge R. David Proctor sentenced PATRICE ANDERSON, 38, of Fairburn, Georgia, on 13 tax-related counts. A federal jury convicted Anderson in September for using her Birmingham tax-preparation business, Queen’s Fast Tax, to file returns that she knew contained false information.
“If you steal from the federal government, you will be charged with a federal crime and you will go to a federal prison,” Town said. “Anderson earned every minute of her five years by siphoning away monies belonging to honest taxpayers from the U.S. Treasury.”
“Patrice Anderson’s sentence demonstrates the seriousness of violating our nation’s federal tax laws,” Holloman said. “Anderson must now serve prison time for her criminal actions, and pay restitution to the tax-paying citizens she defrauded. This sentence should send a clear message: schemes that are directed at cheating the U.S. taxpayers have serious consequences and will result in jail time.”
Evidence at trial showed that Anderson filed tax returns claiming refundable credits to which her clients were not entitled so that they could receive much larger refunds from the government than they were eligible to receive. In return, Anderson would charge the clients abnormally high fees – up to $3,000 per fraudulent return – to file their taxes, according to testimony. The court determined that Anderson, who operated Queen’s Fast Tax from 2009 through 2012, had filed tax returns claiming more than $3.6 million in refunds in 2010 and 2011 alone, and that at least half the claimed refunds in those years were fraudulent.
Anderson testified that she only included information provided by clients on the tax returns that she prepared, but the government presented evidence that Anderson’s own 2010, 2011 and 2012 tax returns contained some of the same false items that were characteristic of the fraudulent tax returns she filed for her clients.
IRS-CI investigated the case, which Assistant U.S. Attorneys Xavier O. Carter Sr. and Kathryn McHugh prosecuted.
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Biopharmaceutical Employees Convicted of Insider TradingRead the Press Release
BOSTON – Two employees of Cambridge-based biopharmaceutical companies were convicted today by a federal jury of engaging in an insider trading scheme.
Schultz “Jason” Chan, 54, of Newton, the Director of Biostatistics at a Cambridge-based biopharmaceutical company, was convicted of one count of conspiracy to commit securities fraud and three counts of securities fraud. Songjiang Wang, 54, of Westford, the Director of Statistical Programming at a different biopharmaceutical company, was convicted of one count of conspiracy to commit securities fraud and two count of securities fraud. U.S. District Court Judge Indira Talwani scheduled Chan’s and Wang’s sentencings for Oct. 4 and 5, 2018, respectively.
From August 2013 to September 2015, Wang and Chan, who were friends, conspired to commit securities fraud by trading insider information regarding successful clinical drug trials at their respective companies. Specifically, Wang traded on inside information Chan provided regarding a clinical study conducted by Chan’s employer. In addition, over a period of several months, Wang tipped Chan of clinical trial results of a Phase 3 clinical trial being conducted by his employer. Furthermore, Wang gave Chan cash, which Chan used to purchase stock shares of Wang’s employer. Chan subsequently sold those shares and paid back Wang.
The charge of securities fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $5 million. The charge of conspiracy to commit securities fraud provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, made the announcement today. The United States Attorney’s Office received valuable assistance from the Securities and Exchange Commission. Assistant U.S. Attorney Jordi de Llano Campos, Deputy Chief of Lelling’s Economic Crimes Unit, and Assistant United States Attorney Kriss Basil, also of the Economic Crimes Unit, are prosecuting the case.
Bay Area Methamphetamine Trafficker Sentenced to 25 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — U.S. District Judge John A. Mendez sentenced Donnie Joe Phillips, 65, of Concord, today to 25 years in prison for methamphetamine trafficking, U.S. Attorney McGregor W. Scott announced.
On February 7, 2018, after a five-day trial, a federal jury found Phillips and his co‑defendant Gordon Owen Miller, 60, of Clayton, guilty of conspiracy to distribute methamphetamine. Miller was found guilty of two counts of distribution and two counts of possession with intent to distribute methamphetamine. Phillips was found guilty of eight counts of distribution and two counts of possession with intent to distribute methamphetamine.
According to evidence produced at trial, between June 2014 and February 2015, Phillips and Miller supplied methamphetamine to co-defendant Phyliss Mosher, 51, of Vallejo, who supplied it to an undercover agent. The drug deals took place in Solano and Yolo Counties. On January 25, 2018, Mosher was sentenced to 15 years in prison after she pleaded guilty to the methamphetamine trafficking conspiracy on May 9, 2017. On May 15, 2018, Miller was sentenced to 20 years in prison.
This case was the product of an investigation by the Drug Enforcement Administration, the El Dorado County Sheriff’s Office, the El Dorado County District Attorney’s Office, the California Highway Patrol, the Vallejo Police Department, and the California Department of Corrections and Rehabilitation. Assistant U.S. Attorneys Jason Hitt and Jill Thomas prosecuted the case.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Baltimore Felon Sentenced to 10 Years in Federal Prison after Pleading Guilty to Illegal Possession of a FirearmRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Antoine Benjamin, age 26, of Baltimore, today to 10 years in prison, followed by three years of supervised release, for being a felon in possession of a firearm.
The sentence and guilty plea were announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Baltimore Field Division; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Interim Police Commissioner Gary Tuggle, of the Baltimore Police Department; Baltimore City State’s Attorney Marilyn Mosby; and Maryland Attorney General Brian Frosh.
According to his plea agreement, on October 23, 2016, a Baltimore Police officer in the 2700 block of Edmondson Avenue saw Benjamin engaging in behavior which made the officer believe he might be engaged in criminal activity. The officer approached Benjamin, who ran away. The officer, assisted by other Baltimore Police officers, pursued Benjamin for several blocks. During the pursuit, the officers saw Benjamin reaching into the front of his pants, as if to retrieve an item. Benjamin ran through a back alley and turned back toward Edmondson Avenue, where he was eventually apprehended by officers. Benjamin was detained on the ground and during a pat down, an officer felt what he believed to be a handgun. The officer recovered a semi-automatic .380-caliber handgun with an obliterated serial number, and seven rounds in the magazine and one round in the chamber.
Benjamin had several previous felony convictions and was prohibited from possessing a firearm or ammunition.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
United States Attorney Robert K. Hur commended the ATF, the FBI, the Baltimore Police Department, the Office of the State’s Attorney for Baltimore City, and the Maryland Attorney General’s Office for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Michael C. Hanlon and Joan C. Mathias, who prosecuted the case.
Armed Career Criminal Sentenced to 15 Years for Hobbs Act Robbery and Gun ChargesRead the Press Release
CHARLOTTE, N.C. – Ronteeni Pak Belk, 40, of Charlotte, N.C., was sentenced to 180 months in prison on Hobbs Act robbery and felon in possession of a firearm charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn, Jr. also ordered Belk to serve three years under court supervision after he is released from prison.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD) join U.S. Attorney Murray in making today’s announcement.
On March 13, 2017, Belk robbed at gun point the Cash America Pawn located at 5200 North Tryon Street in Charlotte. According to filed court documents and statements made in court, at approximately 9:00 a.m., Belk entered the store, pointed a silver handgun at employees, and demanded money. A female employee complied and gave Belk cash from the store’s cash registers. Court records show that Belk also demanded personal items from the individuals inside the store. The same female employee and a customer gave Belk their wallets. Belk then fired a shot into the ground and left the scene. Soon after Belk left the store, the female employee called 911 to report the robbery.
According to court records, CMPD officers located Belk driving a black Hyundai Elantra and began to follow him. Belk attempted to evade the officers, and eventually crashed his vehicle at N. Graham Street and W. Sugar Creek Road. Belk fled the scene on foot and was apprehended shortly thereafter in a wooded lot in the 5700 block of N. Graham Street. At the scene, officers recovered a chrome Raven Arms .25 caliber pistol and four live rounds, a glove, and the store employee’s wallet. The cash from the store’s register was recovered near the intersection where Belk had crashed his vehicle.
At the time of the offense, Belk was a convicted felon and was prohibited from possessing a firearm. Court records indicate that due to Belk’s prior criminal convictions for robbery with a dangerous weapon, he qualified for a sentencing enhancement as an armed career criminal.
Belk is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Murray thanked the FBI and CMPD for leading the investigation.
Assistant United States Attorney William Bozin, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Area Man Found Guilty of Sexually Abusing His Cousin, Beginning When She Was 12 Years OldRead the Press Release
WASHINGTON – An area man, 32, was found guilty today of first-degree sexual abuse, first-degree child sexual abuse, and other charges for sexually abusing his cousin, beginning when she was 12 and continuing until she was 14, announced U.S. Attorney Jessie K. Liu.
The defendant, who is not identified here to protect the privacy of the victim, recently lived in both Silver Spring, Md., and Alexandria, Va. He was found guilty by a jury following a trial in the Superior Court of the District of Columbia. The Honorable Ronna L. Beck ordered that he be held without bond until sentencing on Nov. 2, 2018. He faces up to decades in prison.
According to the government’s evidence at trial, the victim and her younger sister would spend weekends at the Northeast Washington home of their adult sister. The man lived in that same home and, before his abuse became known, and was beloved by the victim’s parents and her adult siblings, who viewed him like a son or brother, rather than as a nephew and cousin.
In the summer of 2014, when the victim was 12 years old, the defendant began sexually abusing her during her weekend visits. The nature of his abuse escalated over time, and each time he abused the girl, he told her not to tell anyone about what he was doing. He also told her that if she told, nobody would believe her, and that she would be the one to get in trouble, not him. The victim confided in her 10-year old sister when the abuse began, but the younger sister did not understand the sexual abuse, and therefore, did not believe the victim and told her so. This caused the victim to fear that just as the defendant had warned, nobody would believe her if she told. Thus, she kept the abuse bottled up inside for the next couple of years.
In early 2017, however, the victim began refusing to visit her adult sister’s home. The victim’s mother and her adult sister found that odd. After church one Sunday in April 2017, the older sister began pressing the victim as to why she had quit coming over to the sister’s home on weekends. It was at that point that the victim finally reported the sexual abuse to which the defendant had been subjecting her. Contrary to the defendant’s threats that no one would believe the victim, the victim’s family immediately reported the abuse to the Metropolitan Police Department (MPD), and the defendant was later arrested.
In announcing the verdict, U.S. Attorney Liu praised the work of members of the Youth and Family Services Division of the Metropolitan Police Department. She also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney John Mannarino, Deputy Chief of the Appellate Section; Paralegal Specialists Brenda C. Williams and Tiffany Jones; Victim/Witness Advocates Juanita Harris, Elsa Maltese and Karen Giannakoulias; Litigation Technology Specialists Anisha Bhatia and Jeanie Latimore-Brown, and Interns Megan Hughes, John Bedecarre, Marianne Aguilar, Demia Lee, and Leon Stern. Finally, U.S. Attorney Liu commended the work of Assistant U.S. Attorneys Jennifer B. Loeb and Peter V. Taylor, who investigated and prosecuted this case.
Antlers Man Sentenced to 30 Months for Possession of Firearm, AmmunitionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Charles Allen Bailey, age 50, of Antlers, Oklahoma was sentenced to 30 months imprisonment and 3 years supervised release for Felon In Possession Of Firearm & Ammunition, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2). The charge arose from an investigation by the Oklahoma Bureau of Narcotics and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Indictment alleged that on or about July 18, 2017, within the Eastern District of Oklahoma, the defendant, Charles Allen Bailey, having been convicted of a crime punishable by imprisonment for a term exceeding one year, knowingly possessed in and affecting commerce a firearm and ammunition which have been shipped and transported in interstate commerce.
United States Attorney Brian J. Kuester said, “Working with local, state, tribal, and federal law enforcement agencies to combat violent crime is a priority of the Department of Justice and U.S. Attorney’s Offices. One of the federal laws available to us to carry out that priority prohibits convicted felons from possessing firearms. The defendant in this case violated that federal law and is being held accountable accordingly. This joint effort by agents from the OBN, ATF and members of this office is an example of interagency team work that occurs on a daily basis in the Eastern District of Oklahoma and across the country. When agencies work together, the public benefits.”
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Kristin Harrington represented the United States. The defendant will remain in custody pending transportation to the designated federal facility at which the non-paroleable sentence will be served.
Altoona Woman Charged with Illegally Using Her Son’s Social Security BenefitsRead the Press Release
JOHNSTOWN, Pa. - A Blair County resident has been indicted by a federal grand jury in Johnstown on a charge of conversion of government funds, United States Attorney Scott W. Brady announced today.
The indictment named Delores Ann Clouser, 68, of Altoona, Pa.
According to the indictment presented to the court, from May 1, 2015, to March 1, 2017, Clouser did receive and convert falsely to her own use a total of $16,865, which represents approximately 23 separate Social Security Administration benefit payments made to her as representative payee for her son, to which she was not entitled.
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 would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Social Security Administration, Office of Inspector General, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Albuquerque Woman Pleads Guilty to Federal Fraud, Identity Theft and Theft of Mail ChargesRead the Press Release
ALBUQUERQUE – Ericka Chavez, 22, of Albuquerque, N.M., pled guilty today in federal court to bank fraud, identify theft and theft of mail charges.
U.S. Postal Inspectors arrested Chavez on March 21, 2018, on a criminal complaint charging her with theft of mail. The complaint alleged that in Oct. 2017 and Feb. 2018, mail boxes at two Albuquerque-area apartment complexes were broken into and mail was stolen. The U.S. Postal Inspection Service initiated an investigation into the scheme after receiving complaints that checks stolen from the mail boxes had been altered and used to pay for memberships to Albuquerque stores.
Chavez was subsequently charged in a 19-count indictment on April 10, 2018, with three counts of theft of mail, eight counts of bank fraud and eight counts of aggravated identity theft. According to the indictment, Chavez committed the offenses from Oct. 2017 through March 2018, in Bernalillo County, N.M., by stealing mail from cluster mailboxes located in apartment complexes. The mail stolen included checkbooks, checks, and personal identifiers of victims, which Chavez used to commit further crimes.
During today’s proceedings, Chavez pled guilty one count of theft of mail, one count of bank fraud and one count of aggravated identity theft. In entering the guilty plea, Chavez admitted that on Nov. 5, 2017, she pried open a mailbox at an apartment complex in southeast Albuquerque and stole mail from inside the mailbox. Chavez also admitted that on Oct. 24, 2017, she executed a scheme to defraud the Bank of Albuquerque by writing a check to an Albuquerque store that was drawn on an account at Bank of Albuquerque in the name of a victim and also fraudulently signed the check with the victim’s name. Chavez acknowledged that she used the victim’s name, address and bank account number without the victim’s permission in order to defraud the bank, the store and the victim.
Chavez has been in federal custody since her arrest and remains detained pending her sentencing hearing, which has yet to be scheduled. At sentencing, Chavez faces a maximum penalty of 30 years in federal prison including a mandatory term of imprisonment of two years on the aggravated identity theft charge, which must be served consecutive to any other sentence imposed on the other charges.
The U.S. Postal Inspection Service investigated this case, which was prosecuted by Assistant U.S. Attorney Jeremy Pena.
9 July 2018
“Bitcoin Maven” Sentenced to One Year in Federal Prison in Bitcoin Money Laundering CaseRead the Press Release
LOS ANGELES, California - The so-called “Bitcoin Maven,” who admitted to operating an unlicensed bitcoin-for-cash exchange business and laundering bitcoin that was represented to be proceeds of narcotics activity, was sentenced today to 12 months and one day in federal prison, three years of supervised release, and a fine of $20,000.
Theresa Lynn Tetley, 50, of Southern California, a former stockbroker and real estate investor, was sentenced by United States District Judge Manuel L. Real for conducting an illegal business and engaging in unlawful monetary transactions involving bitcoins. Tetley was also ordered to forfeit 40 Bitcoin, $292,264.00 in cash, and 25 assorted gold bars that were the proceeds of her illegal activity.
Tetley pleaded guilty to one count of operating an unlicensed money transmitting business and one count of money laundering.
The government’s case against Tetley is the first of this kind charged in the Central District of California. According to court documents, Tetley offered bitcoin-for-cash exchange services without registering as a money services business with the Financial Crimes Enforcement Network (FinCEN), and without implementing anti money-laundering mechanisms such as customer due diligence and reporting certain transactions required for these types of businesses. Tetley advertised on localbitcoins.com and exchanged, in total, between $6 and $9.5 million for customers across the country, charging rates higher than institutions that were registered with FinCEN.
As a result of operating this unregistered business, Tetley facilitated laundering for one individual who is suspected of receiving bitcoin from unlawful activity, such as sales of drugs on the dark web. In the course of her business, Tetley also conducted an exchange of bitcoin-for-cash for an undercover agent who represented that his bitcoin were the proceeds of narcotics trafficking.
According to sentencing documents, the government argued that “[i]n light of the growth of the dark web and the use of digital currency, unlicensed exchangers provide an avenue of laundering for those who use digital currency for illicit purposes.” The government asserted that Tetley’s business “fueled a black-market financial system” that “purposely and deliberately existed outside of the regulated bank industry.”
The investigation into Tetley was conducted by the Drug Enforcement Administration and IRS Criminal Investigation.
The case is being prosecuted by Assistant United States Attorney Puneet V. Kakkar of the Organized Crime Drug Enforcement Task Force Section.
Woman Sentenced in North Mississippi for Student Loan FraudRead the Press Release
OXFORD, MS. William C. Lamar, U.S. Attorney for the Northern District of Mississippi, together with Neil Sanchez, Special Agent in Charge of the U.S. Department of Education Office of Inspector General, Southern Region Office, announced today that a Memphis, Tennessee woman has been sentenced to prison for her role in a scheme to fraudulently obtain student aid.
Lakeisha Arterberry, 32, of Memphis, Tennessee, formerly of Greenwood, Mississippi, was sentenced on July 5, 2018, by U.S. District Judge Debra M. Brown, following her plea of guilty on January 25, 2018, to one count of conspiracy to commit fraud in relation to student aid provided by the U.S. Department of Education. The charge stems from a series of fraudulent applications submitted by Arterberry to the U.S. Department of Education for federal student aid. Each of the fraudulent submissions sought federal student aid for individuals who were enrolled in online classes but who had no intention of completing the coursework or seeking a degree.
Judge Brown ordered Arterberry to serve a total of 18 months in prison, followed by 3 years of supervised release. She was also ordered to pay restitution in the amount of $249,000. Arterberry is scheduled to report to prison on August 27, 2018.
“Federal student aid exists so that individuals can pursue and make their dream of a higher education a reality. As the law enforcement arm of the U.S. Department of Education, ensuring that those who steal student aid or game the system for their own selfish purposes are stopped and held accountable for their criminal actions is a big part of our mission,” said Neil Sanchez, Special Agent in Charge of the U.S. Department of Education Office of Inspector General's Southern Region Office. "That’s why I’m proud of the work of OIG special agents and our law enforcement colleagues for holding Lakeisha Arterberry accountable for her criminal actions.”
Following the sentence, U.S. Attorney William C. Lamar remarked: “The United States Attorney’s Office is committed to holding those individuals who seek to profit from their fraudulent schemes accountable for their illegal activities. The punishment imposed upon Lakeisha Arterberry reinforces the message that federal courts view her actions as serious crimes which warrant significant punishment.”
This case was investigated by the Department of Education, Office of Inspector General and prosecuted by AUSA Robert Mims.
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Warm Springs Man Sentenced to 25 Years in Federal Prison for Molesting Minor VictimRead the Press Release
PORTLAND, Ore. – Lawren John Slockish, 36, of Warm Springs, Oregon, was sentenced today to 300 months in federal prison for molesting an 11-year-old girl.
“Sexual abuse of children casts a lifelong shadow on the health of the victims. The Warm Springs Multi-Disciplinary Child Abuse Team brings together tribal police and prosecutors, Child Protective Services, the Indian Health Service, and federal law enforcement authorities to collaboratively investigate these cases in a thorough, compassionate manner ensuring justice for these vulnerable victims” said Billy J. Williams, U.S. Attorney for the District of Oregon.
“This victim showed great courage by coming forward to disclose the abuse, and for that we are very grateful. Her strength will allow us - law enforcement, the community and her family - to keep other children safe,” said Steve Goldman, Assistant Special Agent in Charge of the FBI in Oregon. “The FBI, working with our tribal partners, will do everything to bring justice for the victim with a long-term goal of identifying and addressing child sexual abuse within our community.”
According to court documents, both Slockish and the minor victim are members of the Warm Springs Tribe. One day following the abuse, the child disclosed to her mother that Slockish had touched her breasts and tried to anally sodomize her. The minor victim’s mother notified the Warm Springs police. The child told Warm Springs police officers that the assault was not the first time the defendant had molested her and that he had done so in a similar manner approximately one year prior.
Slockish previously pleaded guilty to one count of abusive sexual contact with a child on January 19, 2017. Upon completion of his prison sentence, Slockish will be on supervised release for life.
The FBI investigated this case with the assistance of the Warm Springs Tribal Police Department. It was prosecuted by Paul T. Maloney, Assistant U.S. Attorney for the District of Oregon.
On March 3, 1994, the FBI initiated “Operation Safe Trails” with the Navajo Department of Law Enforcement in Flagstaff, Arizona. The operation, which would later evolve into the Safe Trails Task Force (STTF) Program, unites FBI and other federal, state, local, and tribal law enforcement agencies in a collaborative effort to combat the growth of crime in Indian Country. STTFs allow participating agencies to combine limited resources and increase investigative coordination in Indian Country to target violent crime, drugs, gangs, and gaming violations.
Upper Peninsula Crystal Meth Dealers ImprisonedRead the Press Release
MARQUETTE, MICHIGAN — U.S. Attorney Andrew Birge announced today that several crystal methamphetamine dealers from the western part of the Upper Peninsula received long prison terms. The Honorable Paul L. Maloney, U.S. District Judge, issued the following sentences:
• Patrick Joseph Sievers, age 36, formerly of Ironwood, Michigan, sentenced to 264 months (22 years) in federal prison, followed by 8 years of supervised release;
• Kathryn Maria Hellen, age 27, formerly of Ironwood, Michigan, sentenced to 120 months (10 years) in federal prison, followed by 5 years of supervised release;
• Jennifer Elizabeth Smith, age 29, formerly of Ontonagon, Michigan, sentenced to 46 months in federal prison, followed by 3 years of supervised release; and
• Dion Roy Jolliff, age 43, formerly of Ontonagon, Michigan, sentenced to 42 months in federal prison, followed by 3 years of supervised release.
During the sentencing, the government’s attorney, Assistant U.S. Attorney Maarten Vermaat, noted that the Upper Peninsula Substance Enforcement Team (UPSET) has seen crystal methamphetamine ("meth") – a very pure form of the drug – emerge as one of the most commonly trafficked illegal drugs in the area. In addition, the government said that crystal meth dealers are frequently arming themselves for protection.
This case was no exception. Evidence obtained by UPSET showed that Sievers started selling crystal meth in Gogebic, Ontonagon and Houghton Counties in 2016. By the time of his arrest in March 2017, he had sold, by conservative estimates, between 1.5 and 4.5 kilograms of the drug. When UPSET detectives executed a search warrant at Sievers’ camp in Ontonagon, MI on March 30, 2017, they found what Judge Maloney later described as a "drug bunker" – complete with firearms loaded and readily available, motion detectors guarding the approaches to the camp, hidden safes, and a video surveillance system monitoring the doors. Sievers was arrested that same day in Ironwood. Detectives searched his truck and found 215 grams (about 8 ounces) of highly pure crystal meth and a loaded Glock .40 caliber handgun.
Jennifer Smith was arrested after she sold crystal meth on Sievers’ behalf in Ontonagon.
After Sievers’ arrest, UPSET shifted its investigation to other meth dealers in the area. UPSET purchased meth from Dion Jolliff on several occasions. Then Jolliff was found asleep at the wheel of a van owned by Hellen in the middle of an intersection in Ontonagon. Meth and drug paraphernalia were found in the van. Jolliff was arrested.
Hellen, who was previously in a relationship with Sievers, was the last person arrested in this case. Despite her awareness of the arrests of Sievers, Smith and Jolliff, she continued selling crystal meth. In October 2017, police searched her rental house in Ontonagon and found another 8 ounces of crystal meth and a loaded .357 caliber handgun. She was arrested and admitted making several trips to Wausau, Wisconsin to obtain multiple ounces of crystal meth per trip.
Lieutenant Tim Sholander, the UPSET commander, noted that UPSET "was created to reduce the amount of dangerous drugs that destroy our communities in the Upper Peninsula." Lt. Sholander also noted that the detectives assigned to UPSET’s western U.P. team were working to ensure that crystal meth traffickers "were brought to justice for their part in flooding the western part of the Upper Peninsula with crystal meth."
Michigan State Police Troopers and law enforcement officers from the Gogebic Iron-Area Narcotics Team assisted the UPSET investigation. The U.S. Drug Enforcement Administration (DEA) forensic laboratory conducted analysis of the substances seized in this case. The case was prosecuted by Assistant U.S. Attorney Maarten Vermaat.
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U.S. Attorney to Open Human Trafficking Conference in ManhattanRead the Press Release
MANHATTAN, KAN. – U.S. Attorney Stephen McAllister will open the 2018 Human Trafficking Conference July 10 in Manhattan, Kan.
McAllister will speak at 8 a.m. Tuesday at the Manhattan Conference Center, 410 S. 3rd Street in Manhattan, to begin the two-day event. About 200 victim service providers, prosecutors, healthcare professionals, educators and law enforcement officers from across the state are registered to attend. The U.S. Attorney’s office is co-sponsoring the event with the Kansas Attorney General’s Office, the Riley County Attorney’s Office, the Kansas Law Enforcement Training Center and the Wichita State Midwest Criminal Justice Institute.
“What we all have in common is our desire to prevent human trafficking, to prosecute traffickers and to help survivors reclaim their lives and their freedom,” McAllister said.
The keynote speaker on Tuesday morning will be Peter Qualliotine of King County, Washington, where he is director of Men’s Accountability, Organization for Prostitution Services. He will describe his work with men who buy sex in a 10-week sex-buyer intervention program called Stopping Sexual Exploitation: A Program for Men.
In a presentation on the federal response to human trafficking, speakers from the Human Trafficking Unit of the Justice Department’s Civil Rights Division will discuss working with trafficking victims.
There is a $50 charge to attend and participants must register in advance. For more information, call Kim Reese at 316-617-2734.
U.S. Attorney Dunavant Announces Joseph “Joe” Murphy as First Assistant United States Attorney, Western District of TennesseeRead the Press Release
Memphis, TN – United States Attorney Dunavant is pleased to announce the appointment of Joseph "Joe" Murphy as First Assistant United States Attorney, Western District of Tennessee. This position was vacated when Lawrence J. Laurenzi retired in May 2018 after an extensive career with the Department of Justice.
Joe Murphy is a graduate of Lambuth College and the Cecil C. Humphreys School of Law at the University of Memphis. Since 1989 he has served as an Assistant United States Attorney in the Memphis office of the United States Attorney for the Western District of Tennessee. Murphy served as the office’s Criminal Chief, supervising 28 Assistant United States Attorneys who investigate and prosecute criminal cases in the Memphis office and 10 support staff. Prior to being named the office’s Criminal Chief in June of 2011, Murphy served as Chief of the office’s Organized Crime and Drug Enforcement Task Force for three years. In that position he was responsible for supervising a team of attorneys and support personnel who investigated and prosecuted violations of federal drug, money laundering, and firearms laws committed by both individuals and organized criminal groups. Between 1991 and 2007, Murphy served as a line assistant in both the office’s criminal division and drug task force.
U.S. Attorney D. Michael Dunavant said: "With over 29 years’ experience in the United States Attorney’s Office, including service as Criminal Division Chief and OCDETF Chief, Joe Murphy is well prepared to assume the duties of First Assistant United States Attorney. I am pleased to have Joe’s wise counsel, and I am confident that he will lead and manage the office with the highest degree of effectiveness and integrity. I look forward to continuing to work with him to pursue and carry out the priorities of the Department of Justice in the Western District of Tennessee."
During his career with the Justice Department Murphy has tried approximately 125 felony cases to verdict in U.S. District Court. These cases included prosecutions of health care professionals for illegally distributing controlled substances; mail and wire fraud cases; and theft cases involving pension funds and interstate shipments. Murphy has also represented the government in over 200 cases litigated before the United States Court of Appeals for the Sixth Circuit, and he has argued approximately 48 cases before that court.
A Memphis resident, Murphy has been married to Sandy Murphy for 29 years. He has two children, both of whom currently attend graduate school at the University of Memphis. Active in community and legal affairs, Murphy has served on the Executive Committees of the Tennessee Bar Association’s Criminal Justice and Environmental Law Sections, is a member of the Leo Bearman, Sr. Inn of the American Inns of Court, and has served as a volunteer with the Chickasaw Council of the Boy Scouts of America.
Two Juneau Men Sentenced for Federal Firearms OffensesRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that on Friday, July 6, 2018, two Juneau men were sentenced in federal court, in separate cases, for federal firearms offenses.
James V. Drury, 50, of Juneau, was sentenced to serve 72 months in prison, followed by three years of supervised release for theft of firearms and for illegally possessing firearms as a convicted felon. Drury has previous felony convictions with the State of Alaska for burglary and attempted burglary.
According to court documents, Drury burglarized a residence in Ketchikan on May 3, 2016, where he stole two of the homeowner’s firearms – a Model 59/66, 7.62x39 caliber rifle and a Savage Arms, Model 188H, .22 caliber rifle. During the burglary, the homeowner had entered the residence and encountered Drury in possession of the two firearms. During that confrontation, Drury raised one of the rifles, pointed it at the homeowner, and directed him not to move. The homeowner fled the residence to contact police. Drury attempted to conceal the firearms in the backyard of another residence, which were found by the residence owner 11 days later.
Christopher W. Davison, 34, of Juneau, was sentenced to serve 90 months in prison, followed by three years of supervised release for illegally possessing firearms as a convicted felon. Davison has previous felony convictions with the State of Alaska for vehicle theft, criminal mischief, and riot.
According to court documents, on April 20, 2017, law enforcement officers received a report of a man “tweaking hard” and stating to an individual that he “was going to kill everybody” and to remember his name “Chris Davison.” It was reported that Davison was in possession of a firearm described as a sawed-off shotgun. After that incident, a police officer spoke with another witness who stated that he was awoken in the morning and confronted by Davison with what he described as a “MAC-10,” asking the witness to leave the room so he could use the room to have sex with a woman. The next day, Davison was observed at a woman’s residence, but ended up eluding police. Upon Davison’s subsequent arrest, a search of the residence revealed ammunition and a stolen firearm that was a 10/22 Ruger, which is classified as pistol.
The Juneau Police Department (JPD), the Alaska State Troopers (AST), and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) conducted the investigations leading to the successful prosecutions of these cases. These cases were prosecuted by Assistant U.S. Attorney Jack Schmidt.
Two Defendants Arrested for Distribution of Controlled Substances Through Sham Internet PharmacyRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Valerie Nickerson, the Special Agent in Charge of the New Jersey Office of the Drug Enforcement Administration (“DEA”), and Judy Ramos, the Acting Inspector in Charge of the New Jersey Office of the United States Postal Inspection Service (“USPIS”), announced today that EVELIN BRACY and JORGE RODRIGUEZ LOPEZ were arrested and charged in Manhattan federal court with conspiracy to distribute controlled substances, including oxycodone, hydrocodone, and more than 40 grams of the fentanyl analogue U-47700, distribution of controlled substances over the Internet, and conspiracy to commit money laundering, in connection with a large-scale drug distribution operation purporting to be an online pharmacy. BRACY and RODRIGUEZ LOPEZ were both arrested this morning. Both defendants will be presented today before U.S. Magistrate Judge Sarah Netburn.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, Evelin Bracy and Jorge Rodriguez Lopez distributed controlled substances to individuals throughout the United States as part of a drug trafficking organization that sold pharmaceuticals through a website purporting to be an online pharmacy. Bracy and Rodriguez Lopez allegedly conspired to distribute oxycodone, hydrocodone, and a fentanyl analogue, and laundered hundreds of thousands of dollars in narcotics trafficking proceeds. Thanks to the outstanding investigative work of the DEA and USPIS, these two defendants are now facing prosecution.”
DEA Special Agent in Charge Valerie Nickerson said: “The two individuals arrested allegedly have been distributing powerful narcotics not just in New Jersey, but across the United States, based on orders place through a supposed online pharmacy. This very profitable, alleged illegal endeavor has come to an end thanks to the hard work of the men and women of the DEA and the USPIS. Whether on a street corner or in cyberspace we will continue to pursue those pushing these drugs in our communities.”
USPIS Acting Inspector in Charge Judy Ramos said: “Postal Inspectors, federal prosecutors and our law enforcement partners have diligently worked to identify and disrupt the activities of an online pharmacy suspected of peddling illegal pills and money laundering. Postal Inspectors will continue to tirelessly investigate these types of crimes that utilize the U.S. Postal Service to facilitate illicit transactions.”
According to the allegations in the Complaint[[1]] unsealed today in Manhattan federal court:
Law enforcement agents began investigating an online pharmacy website (the “Pharmacy Website”) following an overdose death of a victim in Boise, Idaho, on or about March 17, 2017, whose death was caused by elevated levels of multiple prescription opioids as well as fentanyl. The victim’s computer showed that he had repeatedly ordered painkillers from the Pharmacy Website, and that he had wired thousands of dollars to a bank account in connection with these purchases. Law enforcement subsequently discovered that this bank account was being used by BRACY and RODRIGUEZ LOPEZ. Bank records show that this bank account and several others used by BRACY have received over $750,000 in apparent narcotics proceeds, and that BRACY and RODRIGUEZ LOPEZ have withdrawn hundreds of thousands of dollars in cash from these accounts, and have also used these bank accounts to pay for costs associated with the drug distribution operation, including the costs of shipping controlled substances.
In the course of the investigation, undercover law enforcement agents conducted multiple purchases of controlled substances from the Pharmacy Website, and received instructions to send payment for these drugs to BRACY and RODRIGUEZ LOPEZ. The substances purchased by undercover law enforcement agents included substances that tested positive for oxycodone and hydrocodone.
The investigation has revealed that in some cases customers purchased what they believed to be prescription drugs such as alprazolam or oxycodone from the Pharmacy Website, but instead received pills containing other substances. In the course of the investigation, law enforcement agents seized a package that had been sent to RODRIGUEZ LOPEZ, and recovered over 200 pills weighing over 40 grams. These pills tested positive for U-47700, which is a fentanyl analogue listed on Schedule I.
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BRACY, 34, and RODRIGUEZ LOPEZ, 32, who both reside in New Brunswick, New Jersey, have each been charged with one count of conspiracy to distribute controlled substances including at least 40 grams of the fentanyl analogue U-47700, which carries a maximum sentence of 40 years in prison and a mandatory minimum sentence of five years in prison, one count of distribution of controlled substances over the Internet, which carries a maximum sentence of 40 years in prison and a mandatory minimum sentence of five years in prison, and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the investigative work of the DEA and USPIS in this investigation. He added that the investigation is continuing.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Thane Rehn is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Two Additional Members and Associates of Tennessee Mongols Motorcycle Gang Charged with Crimes Related to Racketeering Conspiracy, Murder, Kidnapping and Drug TraffickingRead the Press Release
A 75-count, third-superseding indictment was returned by a federal grand jury in Nashville, Tennessee on June 29 and unsealed Friday, charging 21 members and associates of the Clarksville, Tennessee chapter of the Mongols Motorcycle Gang with various federal crimes, including racketeering conspiracy, murder in aid of racketeering, attempted murder, kidnapping, robbery, large-scale drug trafficking, and other crimes, announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Don Cochran of the Middle District of Tennessee.
On Jan. 18, a 54-count superseding indictment charged 15 members and associates of the Clarksville Mongols with racketeering conspiracy, murder, drug trafficking and other related crimes. On March 7, a 64-count second-superseding indictment charged four additional defendants with the kidnapping and murder of Stephen Cole, an estranged former member of the Mongols. The indictments detail allegations of violent, criminal activity and drug trafficking in and around the Clarksville area beginning in or about March 2015 and continuing until the return of the indictments.
The latest indictment charges two additional associates of the Clarksville Mongols with drug trafficking conspiracy, money laundering, interstate travel in aid of racketeering, tampering with the grand jury investigation by removing and concealing evidence, false statements to law enforcement, and accessory after the fact for the kidnapping and murder of Stephen Cole. The two additional defendants are Janie Lee, 22, of Owensboro, Kentucky, and Jessie Marie Decker, 33, of Trenton, Kentucky. Lee will have her initial court appearance this afternoon before U.S. Magistrate Judge H. Brent Brennenstuhl in the Western District of Kentucky and Decker will have her initial court appearance this afternoon before U.S. Magistrate Judge Alistair E. Newbern in the Middle District of Tennessee.
This indictment charges Lee with conspiracy to distribute large-scale quantities of methamphetamine, distribution and possession with intent to distribute methamphetamine, interstate travel in aid of racketeering, and money laundering.
Decker is charged along with previously-indicted defendant William Nelper aka “Flip,” 50, of Clarksville, with conspiracy to distribute and possession with intent to distribute marijuana, tampering with the grand jury investigation, and use of a firearm in relation to a drug trafficking crime. Decker is separately charged with making false statements to law enforcement relating to the kidnapping and murder of Cole and as an accessory after the fact to the kidnapping.
The third-superseding indictment also brings additional charges against other previously- indicted defendants. Robert Humiston aka “Bric,” 25, of Dover, is charged with possession of a short-barreled rifle in violation of the National Firearms Act (NFA) and with failure to register the firearm as required by the NFA. Christopher Wilson, 35, of Clarksville, is charged with two counts of being a felon in possession of a firearm, drug trafficking conspiracy and possession with intent to distribute several different controlled substances, possession with intent to distribute methamphetamine, and possession of a firearm in furtherance of a drug trafficking crime.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives; the Clarksville Police Department; the Tennessee Bureau of Investigation; and the Kentucky State Police. Trial Attorney Robert Tully of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Katy Risinger of the Middle District of Tennessee are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Additional Members and Associates of Clarksville Tennessee Mongols Motorcycle Gang Charged with Crimes Related to Racketeering Conspiracy, Murder, Kidnapping and Drug TraffickingRead the Press Release
A 75-count, third-superseding indictment was returned by a federal grand jury in Nashville, Tennessee on June 29 and unsealed Friday, charging 21 members and associates of the Clarksville, Tennessee chapter of the Mongols Motorcycle Gang with various federal crimes, including racketeering conspiracy, murder in aid of racketeering, attempted murder, kidnapping, robbery, large-scale drug trafficking, and other crimes, announced U.S. Attorney Don Cochran of the Middle District of Tennessee and Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division.
On January 18, 2018, a 54-count superseding indictment charged 15 members and associates of the Clarksville Mongols with racketeering conspiracy, murder, drug trafficking and other related crimes. On March 7, 2018, a 64-count second-superseding indictment charged four additional defendants with the kidnapping and murder of Stephen Cole, an estranged former member of the Mongols. The indictments detail allegations of violent, criminal activity and drug trafficking in and around the Clarksville, Tennessee area beginning in or about March 2015 and continuing until the return of the indictments.
The latest indictment charges two additional associates of the Clarksville Mongols with drug trafficking conspiracy, money laundering, interstate travel in aid of racketeering, tampering with the grand jury investigation by removing and concealing evidence, false statements to law enforcement, and accessory after the fact for the kidnapping and murder of Stephen Cole. The two additional defendants are:
Janie Lee, 22, of Owensboro, Kentucky, and Jessie Marie Decker, 33, of Trenton, Kentucky. Lee will have her initial court appearance this afternoon before U.S. Magistrate Judge H. Brent Brennenstuhl in the Western District of Kentucky and Decker will have her initial court appearance this afternoon before U.S. Magistrate Judge Alistair E. Newbern in the Middle District of Tennessee.
This indictment charges Lee with conspiracy to distribute large-scale quantities of methamphetamine, distribution and possession with intent to distribute methamphetamine, interstate travel in aid of racketeering, and money laundering.
Decker is charged along with previously-indicted defendant William Nelper a/k/a “Flip,” with conspiracy to distribute and possession with intent to distribute marijuana, tampering with the grand jury investigation, and use of a firearm in relation to a drug trafficking crime. Decker is separately charged with making false statements to law enforcement relating to the kidnapping and murder of Cole and as an accessory after the fact to the kidnapping.
The third-superseding indictment also brings additional charges against other previously- indicted defendants. Robert Humiston a/k/a “Bric,” is charged with possession of a short-barreled rifle in violation of the National Firearms Act (NFA) and with failure to register the firearm as required by the NFA. Christopher Wilson is charged with two counts of being a felon in possession of a firearm, drug trafficking conspiracy and possession with intent to distribute several different controlled substances, possession with intent to distribute methamphetamine, and use of a firearm in relation to a drug trafficking crime.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives; the Clarksville Police Department; the Tennessee Bureau of Investigation; and the Kentucky State Police. Assistant U.S. Attorney Katy Risinger of the Middle District of Tennessee and Trial Attorney Robert Tully of the DOJ Organized Crime and Gang Section are prosecuting the case.
An indictment is merely an accusation and all defendants are presumed innocent unless and until proven guilty in a court of law.
Timothy Downs, Former Chief of Lake County Sheriff’s Department and William Szarmach, Owner of CSA Towing SentencedRead the Press Release
HAMMOND – Timothy Downs, 67, of Monticello, Indiana and William Szarmach, 61, of Hobart, Indiana were sentenced before District Court Judge James T. Moody on their plea of guilty to honest services wire fraud, announced U.S. Attorney Kirsch.
U.S. Attorney Kirsch said, “Public corruption is a top priority of my office. Mr. Downs and Mr. Szarmach’s immediate cooperation was instrumental in the prosecution of former Sheriff John Buncich and the court’s sentence reflects these acts. For those involved in public corruption, my office has a team of investigators that are working on investigating all leads related to all acts of public corruption. I encourage anyone with information about such possible corruption to report it to me or to the FBI. Citizens demand, and in fact deserve, honest public service from their elected and appointed officials.”
Downs was sentenced to 2 years probation and ordered to pay a fine of $6000.
Szarmach, who in addition to honest services wire fraud also entered a plea of guilty to bribery, was also sentenced to 2 years probation and ordered to pay restitution to the IRS.
According to documents in this case, from February 2014 continuing into October 2016, Buncich, Downs and Szarmach devised a scheme to deprive the citizens of Lake County of their right to the honest services of the sheriff’s office. The scheme was designed to enrich Buncich personally and his campaign committee, known as Buncich Boosters. The documents detail a number of checks and cash payments, often collected by Downs, from Szarmach and an Individual A in exchange for Buncich awarding county towing business and towing in the City of Gary for ordinance violations. Individual A is the owner of a tow truck business who voluntarily came forward and cooperated with the United States during the course of this investigation.
This case was being investigated by the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation Division; and the Department of Labor, Office of Inspector General. This case will be handled by Assistant U.S. Attorney Philip C. Benson.
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South Bend Woman Sentenced to 60 Months in PrisonRead the Press Release
SOUTH BEND – Tiffany Gadson, age 34, of South Bend, Indiana was sentenced before District Court Judge Robert L. Miller, Jr. for possessing cocaine with the intent to deliver, announced U.S. Attorney Kirsch.
Gadson was sentenced to 60 months in prison followed by 4 years of supervised release.
According to documents in this case, on or about November 13, 2017 officers conducted a traffic stop on Gadson who was in possession over 28 grams of a rocklike substance that contained a cocaine base.
This case was investigated by the Drug Enforcement Administration (DEA) with assistance from the Michigan City Police Department and LaPorte County Drug Task Force. The case was handled by Assistant U.S. Attorney Frank Schaffer.
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Solano County Woman Sentenced to over 2 Years in Prison for Conspiracy and Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — Michelle Louise Travis, 53, of Suisun City, was sentenced today by U.S. District Judge Kimberly J. Mueller to two years and three months in prison for conspiracy to commit wire fraud and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.
According to court documents, in 2013, Travis and co-defendant Pamela Dawn Pierson used identity theft victims’ personal identifying information to file fraudulent tax returns in order to obtain income tax refunds to which they were not entitled. As part of their scheme, Travis and Pierson obtained and shared lists of personal identifying information, which included identity theft victims’ names and social security numbers. Travis and Pierson submitted a total of $66,022 in fraudulent claims to the Internal Revenue Service.
This case was the product of an investigation by the IRS Criminal Investigation, the Federal Bureau of Investigation, and the Fairfield Police Department. Assistant U.S. Attorney Brian A. Fogerty prosecuted the case.
On March 14, 2018, Judge Mueller sentenced Pierson to two years and three months in prison.
Settlement to Speed Cleanup at Superfund Fund Site AnnouncedRead the Press Release
WASHINGTON – The U.S. Department of Justice, the U.S. Environmental Protection Agency (EPA), and the Rhode Island Department of Environmental Management (RIDEM) announced today that two subsidiaries of Stanley Black & Decker Inc.—Emhart Industries Inc. and Black & Decker Inc.—have agreed to clean up dioxin contaminated sediment and soil at the Centredale Manor Restoration Project Superfund Site in North Providence and Johnston, Rhode Island.
“We are pleased to reach a resolution through collaborative work with the responsible parties, EPA, and other stakeholders,” said Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division. “Today’s settlement ends protracted litigation and allows for important work to get underway to restore a healthy environment for citizens living in and around the Centredale Manor Site and the Woonasquatucket River.”
“This settlement demonstrates the tremendous progress we are achieving working with responsible parties, states, and our federal partners to expedite sites through the entire Superfund remediation process,” said EPA Acting Administrator Andrew Wheeler. “The Centredale Manor Site has been on the National Priorities List for 18 years; we are taking charge and ensuring the Agency makes good on its promise to clean it up for the betterment of the environment and those communities affected.”
“Successfully concluding this settlement paves the way for EPA to make good on our commitment to aggressively pursue cleaning up the Centredale Manor Superfund Site,” said EPA New England Regional Administrator Alexandra Dunn. “We are excited to get to work on the cleanup at this site, and get it closer to the goal of being fully utilized by the North Providence and Johnston communities.”
“We are pleased that the collective efforts of the State of Rhode Island, EPA, and DOJ in these negotiations have concluded in this major milestone toward the cleanup of the Centredale Manor Restoration Superfund site and are consistent with our long-standing efforts to make the polluter pay,” said RIDEM Director Janet Coit. “The settlement will speed up a remedy that protects public health and the river environment, and moves us closer to the day that we can reclaim recreational uses of this beautiful river resource.”
The settlement, which includes cleanup work in the Woonasquatucket River (River) and bordering residential and commercial properties along the River, requires the companies to perform the remedy selected by EPA for the Site in 2012, which is estimated to cost approximately $100 million, and resolves longstanding litigation.
The cleanup remedy includes excavation of contaminated sediment and floodplain soil from the Woonasquatucket River, including from adjacent residential properties. Once the cleanup remedy is completed, full access to the Woonasquatucket River should be restored for local citizens. The cleanup will be a step toward the State’s goal of a fishable and swimmable river. The work will also include upgrading caps over contaminated soil in the peninsula area of the Site that currently house two high-rise apartment buildings. The settlement also ensures that the long-term monitoring and maintenance of the site, as directed in the remedy, will be implemented to ensure that public health is protected.
Under the settlement, Emhart and Black & Decker will reimburse EPA for approximately $42 million in past costs incurred at the Site. The companies will also reimburse EPA and the State of Rhode Island for future costs incurred by those agencies in overseeing the work required by the settlement. The settlement will also include payments on behalf of two federal agencies to resolve claims against those agencies. These payments, along with prior settlements related to the Site, will result in a 100 percent recovery for the United States of its past and future response costs related to the Site.
Litigation related to the Site has been ongoing for nearly eight years. While the Federal District Court found Black & Decker and Emhart to be liable for their hazardous waste and responsible to conduct the cleanup of the Site, it had also ruled that EPA needed to reconsider certain aspects of that cleanup. EPA appealed the decision requiring it to reconsider aspects of the cleanup. This settlement, once entered by the District Court, will resolve the litigation between the United States, Rhode Island, and Emhart and Black and Decker, allowing the cleanup of the Site to begin.
The Site spans a one and a half mile stretch of the Woonasquatucket River and encompasses a nine-acre peninsula, two ponds and a significant forested wetland. From the 1940s to the early 1970s, Emhart’s predecessor operated a chemical manufacturing facility on the peninsula and used a raw material that was contaminated with 2,3,7,8-tetrachlorodibenzo-p-dioxin, a toxic form of dioxin. The Site property was also previously used by a barrel refurbisher. Elevated levels of dioxins and other contaminants have been detected in soil, groundwater, sediment, surface water and fish.
The Site was added to the National Priorities List (NPL) in 2000, and in December 2017, EPA included the Centredale Manor Restoration Project Superfund Site on a list of Superfund sites targeted for immediate and intense attention. Several short-term actions were previously performed at the Site to address immediate threats to the residents and minimize potential erosion and downstream transport of contaminated soil and sediment. This settlement is the latest agreement EPA has reached since the Site was listed on the NPL. Prior agreements addressed the performance and recovery of costs for the past environmental investigations and interim cleanup actions from Emhart, the barrel reconditioning company, the current owners of the peninsula portion of the Site, and other potentially responsible parties.
The Consent Decree, lodged in the U.S. District Court of Rhode Island, will be posted in the Federal Register and available for public comment for a period of 30 days. The Consent Decree can be viewed on the Justice Department website: www.justice.gov/enrd/Consent_Decrees.html.
EPA information on the Centredale Manor Superfund Site: www.epa.gov/superfund/centredale.
Schenectady Man Sentenced to 63 Months of Imprisonment for ArsonRead the Press Release
ALBANY, NEW YORK – Duane E. Griffin, 37, of Schenectady, New York, was sentenced to serve 63 months in prison for arson, announced United States Attorney Grant C. Jaquith and Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)-New York Field Division.
On March 9, 2018, following a one-week trial, a jury voted to convict Griffin of arson. The evidence presented at trial established that on March 17, 2012, Griffin used a hand-held propane torch to set the three-story building, located at 605 Union Street in the City of Schenectady, on fire. Griffin then got into his vehicle and fled the scene as flames began to engulf the building. The fire caused such severe structural damage to the building that it later had to be torn down for public safety. Griffin was also sentenced to a three-year term of supervised release, which will start after he is released from prison.
This case was investigated by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Schenectady Fire Department, and was prosecuted by Assistant U.S. Attorney Rick Belliss.
Roane County Man Pleads Guilty to Child Pornography CrimeRead the Press Release
CHARLESTON, W.Va. – A Roane County man pled guilty today to a child pornography crime, announced United States Attorney Mike Stuart. Devin Wolfe entered his guilty plea to one count of receipt of child pornography. Stuart commended the investigation conducted by the Federal Bureau of Investigation and the West Virginia State Police.
“Prosecuting child pornography crimes is a priority for my office,” said United States Attorney Mike Stuart. “We will continue to work with law enforcement to protect our most vulnerable by vigorously prosecuting pedophiles who prey on children.”
Wolfe admitted to possessing images and videos depicting child pornography on October 12, 2016. He received these images and videos from the internet, including from the website “4chan.” One of the images, which he downloaded on August 21, 2016 at his residence in Roane County, depicted an adult male engaged in sexual intercourse with a prepubescent female. Wolfe further admitted to possessing at least 6 videos and 730 images. Many of the minors depicted in the videos and images have been identified by the National Center for Missing and Exploited Children.
Wolfe faces at least 5 and up to 20 years in federal prison when he is sentenced on October 10, 2018. He will also be required to register as a sex offender.
Assistant United States Attorneys Jennifer Rada Herrald and Emily Wasserman are handling the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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Plattsburgh Drug Dealer Sentenced for Membership in Heroin Distribution ConspiracyRead the Press Release
PLATTSBURGH, NEW YORK – Charles Adams, a.k.a. “Chuck,” 32, of Peru, New York, was sentenced today to serve 37 months in prison, to be followed by 4 years of supervised release, for conspiring to possess with intent to distribute and to distribute heroin, announced United States Attorney Grant C. Jaquith, Special Agent in Charge James J. Hunt, New York Division, U.S. Drug Enforcement Administration (DEA), and Clinton County Sheriff David Favro.
In pleading guilty, Adams admitted to being a member of a heroin-distribution conspiracy that transported hundreds of grams of heroin from Annapolis, Maryland and Schenectady, New York, to Plattsburgh, New York, where it was distributed. Adams, who was arrested in possession of 24 grams of heroin (including packaging) on May 25, 2017, admitted to driving other members of the conspiracy to pick up heroin in Annapolis and Schenectady, and to selling heroin in Plattsburgh.
The charges are the result of a nearly yearlong investigation led by the DEA Task Force in Plattsburgh, which consists of law enforcement officers from the DEA, Homeland Security Investigations, United States Border Patrol, New York State Police, Clinton County Sherriff’s Office, Essex County Sheriff’s Office, and the Plattsburgh Police Department. The New York State Department of Corrections and Community Supervision also assisted in the investigation.
The case was prosecuted by Assistant U.S. Attorneys Cyrus P.W. Rieck and Katherine Kopita.
Pensacola Man Pleads Guilty to Stealing from the Department of Veterans AffairsRead the Press Release
PENSACOLA, FLORIDA – Richard E. Kohl, 83, of Pensacola, Florida, has pleaded guilty to theft of government funds in connection with filing false and fraudulent benefit claims with the Department of Veterans Affairs (“VA”). The guilty plea was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
Documents introduced at the time of the guilty plea reflect that, at some point prior to July 3, 1996, Kohl created and signed a fictitious Form DD-214 that falsely reported that he served in the United States Marine Corps during the Korean War and was discharged on December 20, 1961. Kohl never served in any branch of the United States military. Kohl used the false Form DD-214 as proof of his military service to obtain veterans’ benefits he was not entitled to receive. Between February 3, 2005, and February 9, 2018, Kohl received benefit payments and services totaling approximately $219,719.39 from the VA.
“By defrauding the federal government for personal gain, Kohl stole resources needed to help real veterans,” said U.S. Attorney Canova. “These benefits are meant for the brave men and women who have served our country.”
Monty Stokes, Special Agent in Charge, VA Office of Inspector General said, “The VA benefits fraudulently received by Mr. Kohl were intended to provide financial and health care support for veterans who honorably served in the armed forces of the United States. This guilty plea is the result of the successful investigative and prosecutive efforts of the VA OIG and the U.S. Attorney’s Office. These continued efforts safeguard the integrity of VA programs, and ensure that VA benefits are provided only to those who have earned them.”
Kohl faces a maximum of ten years in prison. The sentencing hearing is scheduled for September 19, 2018.
The case was investigated by the VA Office of Inspector General – Criminal Investigations Division. It was prosecuted by Assistant United States Attorney J. Ryan Love.
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.
Owner of Salem Roast Beef Restaurant Pleads Guilty to Federal Tax ChargesRead the Press Release
BOSTON – The owner of King’s Roast Beef in Salem pleaded guilty today in federal court in Boston to failing to pay approximately $383,000 in taxes.
John Kalantzis, 52, of Lynn, pleaded guilty to two counts of aiding and assisting in filing a false tax return. U.S. District Court Judge William G. Young scheduled sentencing for Oct. 2, 2018.
During tax years 2011 through 2015, Kalantzis underreported the gross receipts and expenses of King’s Roast Beef in order to improperly reduce the federal income taxes owed by the restaurant. Kalantzis did so by diverting some of the restaurant’s cash receipts to himself, paying for some of the restaurant supplies with cash, and paying a portion of his employee’s wages in cash. Kalantzis then failed to report this conduct to his tax preparer. As such, during each of the tax years 2011 through 2015, Kalantzis failed to report cash receipts of approximately $275,000 and cash expenses of approximately $115,000 on King’s Roast Beef’s tax returns. As a result, Kalantzis failed to report a total of $855,000 to the IRS during those years, thereby avoiding paying corporate and personal taxes of $383,000.
The charge of aiding and assisting the filing of false tax returns provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling 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 is prosecuting the case.
Oklahoma City Woman Receives a Year in Prison for Use of Credit Profile NumbersRead the Press Release
OKLAHOMA CITY – TIMATRESS TENAKA CADE, 31, of Oklahoma City, has been sentenced to twelve months in prison for using credit profile numbers, or CPNs, to falsely report her Social Security Number in credit applications, announced Robert J. Troester, Acting U.S. Attorney for the Western District of Oklahoma.
According to charges filed in November 2017, Cade used CPNs, also known as "credit privacy numbers" or "credit protection numbers," instead of her own Social Security Number when she applied for financing at retailers and financial institutions. CPNs are usually stolen Social Security Numbers, often belonging to children, which are marketed to individuals with poor credit history as a way to get a clean credit profile. By using CPNs instead of her own Social Security Number on credit applications, Cade deceived retailers, credit card companies, banks, and a home leasing company into believing she had a better credit history than she had actually earned. She purchased a vehicle, household furnishings, televisions, computers, and other goods, and leased a home, and then made little to no payments on the credit accounts, which caused financial losses to her creditors.
On January 5, 2018, Cade pleaded guilty to false representation of a Social Security Number after she used a CPN instead of her own Social Security Number when she leased a home in Edmond, Oklahoma, from OKC Homes 4 You. Today U.S. District Judge David L. Russell sentenced her to twelve months in prison, to be followed by three years of supervised release. She must also pay $68,637.74 in restitution to OKC Homes 4 You and the other creditors she defrauded. The government agreed to dismiss other charges against her.
This case is the result of an investigation by the Social Security Administration’s Office of the Inspector General, the Federal Bureau of Investigation, and the United States Postal Inspection Service. It was prosecuted by Assistant U.S. Attorney Jessica L. Perry.
Reference is made to public filings for further information.
Odemnis Prats Leiva Sentenced to Serve 54 Months in Federal Prison for Wire Fraud and Aggravated Identity TheftRead the Press Release
GREENEVILLE, Tenn. – On July 9, 2018, Odemnis Prats Leiva, 31, of Pompano Beach, Florida, was sentenced by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 54 months in federal prison for his role in a wire fraud and aggravated identity theft conspiracy involving credit card skimmers. Upon his release from prison, he will be supervised by U.S. Probation for three years. Leiva was also ordered to pay restitution in the amount of $21,114.84.
In March 2018, Leiva pleaded guilty to three counts of a September 2017 federal indictment. Details of the scheme are outlined in his plea agreement on file with U.S. District Court. According to the plea agreement, between August 7, 2017 and August 10, 2017, Leiva and Amaurys Mendez Campanon used skimming devices on gas pumps at retail gas stations to obtain the credit/debit card account information of numerous people without their knowledge. They used the fraudulently obtained information to re-encode unloaded gift cards, which they shoplifted from various retail establishments. The re-encoded cards were then used to purchase loaded gift cards and other consumer items at various retail establishments across east Tennessee and elsewhere.
As a result of an ongoing investigation by law enforcement, Leiva and Campanon were arrested in Rogersville, Tennessee, on August 10, 2017. At the time of the arrest, Leiva was in possession of nine unlawfully re-encoded devices, $7,020.25 in cash, numerous gift cards, all of which he had obtained as part of the conspiracy, as well as other items used in furtherance of their conspiracy. Campanon, who was also charged in the indictment and has pleaded guilty, was arrested at the same time. He is awaiting sentencing in U.S. District Court.
This investigation was conducted by the U.S. Secret Service, Johnson City Police Department and Rogersville Police Department. Assistant U.S. Attorney TJ Harker represented the United States in court proceedings.
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New Orleans Man Pleads Guilty in Methamphetamine Trafficking ConspiracyRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that PETER GIANDALONE, age 43, of New Orleans pled guilty today to one count of conspiring to traffic 500 grams or more of a mixture containing methamphetamine in the Eastern District of Louisiana. GIANDALONE faces a mandatory minimum sentence of 10 years in prison, a maximum life sentence, a fine of up to $10,000,000 and at least 5 years of supervised release.
U.S. District Judge Susie Morgan set sentencing for GIANDALONE on October 11, 2018.
U.S. Attorney Evans praised the work of the United States Postal Inspection Service, Louisiana State Police, Jefferson Parish Sheriff’s Office, Texas Department of Public Safety, Texas Highway Patrol, Montgomery County (Texas) Sheriff’s Office, Immigration and Customs Enforcement, AMTRAK Police, and the Orleans Parish District Attorney’s Office. Assistant United States Attorney Brandon S. Long is in charge of the prosecution.
Minnesota Man Charged with Kidnapping Kansas GirlRead the Press Release
KANSAS CITY, KAN. – A Minnesota man was charged Monday with kidnapping a 13-year-old Kansas girl and taking her to St. Paul, U.S. Attorney Stephen McAllister said.
Dechon White, 23, St. Paul, Minn., is charged with one count of kidnapping. Documents filed in the case allege White and the victim met online in February 2018. On July 1, White came to visit the victim at her home in Lenexa, Kan. He told the victim’s mother he was 16 years old. During his stay in Lenexa, he had sex with the victim.
On July 4, White and the victim told her mother they were going to a shopping mall. Instead, they went to a Greyhound bus station in Kansas City and took a bus to St. Paul.
After the victim’s mother reported her missing, police found White and the victim at his residence in St. Paul.
If convicted, White faces a penalty of not less than 20 years in federal prison and a fine up to $250,000. The Lenexa Police Department, the South St. Paul Police Department and the FBI investigated. Assistant U.S. Attorneys Kim Flannigan and David Zabel are prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Mexican Man Arrested at the Cyril E. King Airport Sentenced to Incarceration for Illegal Reentry into the United StatesRead the Press Release
St. Thomas, USVI – FilibertoMoreno, 50, of Mexico, was sentenced today before District Court Judge Curtis V. Gomez, to four months incarceration for illegal reentry into the United States, United States Attorney Gretchen C.F. Shappert announced. In addition, Judge Gomez sentenced Moreno to one year of supervised release and ordered him to pay a $100 special assessment.
According to plea agreement, Moreno was stopped by U.S. Customs and Border Protection (CBP) officers at the Cyril E. King Airport after he presented himself at primary inspection. During the inspection process, Customs agents discovered that Moreno had been previously deported from the United States and that he did not have permission to legally be in the territory.
The case was investigated Homeland Security Investigations (HSI) and U.S. Customs and Border Protection (CBP) and prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
Lewis County man admits to firearms chargeRead the Press Release
ELKINS, WEST VIRGINIA – Roger Lee Clem, II, aka “Woody,” of Weston, West Virginia, has admitted to a firearms charge, United States Attorney Bill Powell announced.
Clem, age 30, pled guilty to one count of “Possession of a Stolen Firearm.” Clem admitted to having a stolen .45-caliber pistol in Lewis County in October 2016.
Clem faces up to 10 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the case on behalf of the government. The Bureau of Alcohol, Firearms, Tobacco and Explosives, The Mountain Region Drug & Violent Crime Task Force, the Greater Harrison Drug &Violent Crime Task Force, a HIDTA-funded initiative, the West Virginia State Police, Upshur County Sheriff’s Office, Lewis County Sheriff’s Office, the Buckhannon Police Department, and the Weston Police Department investigated.
U.S. Magistrate Judge Michael John Aloi presided.Justice Department Files Sexual Harassment Lawsuit Against Owner of Cullman, Alabama, Rental PropertyRead the Press Release
The Justice Department today announced that it has filed a lawsuit alleging that Randy Hames, a residential property owner and landlord in Cullman, Alabama, subjected female tenants to egregious sexual harassment in violation of the Fair Housing Act. Along with Randy Hames, the Department’s complaint names his residential property company, Hames Marina, LLC, as a defendant.
The complaint, filed in the U.S. District Court for the Northern District of Alabama, alleges that since at least 2011, Hames sexually harassed numerous women who lived in the defendants’ residential property. The suit alleges that Hames’s conduct included demanding or pressuring female tenants to engage in sexual acts with him in exchange for rent or to prevent eviction; evicting female tenants when they refused his advances; making female tenants feel unsafe by stalking them and entering their residences without permission; and making unwelcome sexual comments and advances.
“Subjecting female tenants to harassment and demands for sex is offensive and illegal,” said Acting Assistant Attorney General John Gore. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act against landlords who engage in this reprehensible conduct. No woman should feel unsafe in her own home.”
“The alleged behavior of Randy Hames is abhorrent and repulsive. We will not let women, or any person, in our district be threatened, harassed, or retaliated against by landlords,” said U.S. Attorney Jay E. Town for the Northern District of Alabama. “The Fair Housing Act is an extraordinary tool that allows the Department of Justice to protect all tenants from egregious misconduct, like sexual harassment, and we will continue to strongly enforce all violations of it.”
The Justice Department’s Sexual Harassment in Housing Initiative (SHHI) was launched in October 2017 and expanded nationally in April 2018. The initiative specifically seeks to increase the Department’s efforts to protect individuals from harassment by landlords, property managers, maintenance workers, security guards, loan officers, or other people who have control over housing. The Justice Department has filed or settled 10 sexual harassment cases and has recovered over $1.6 million for victims of sexual harassment in housing since Jan. 20, 2017. Today’s lawsuit seeks monetary damages to compensate the victims, civil penalties, and a court order barring future discrimination. The complaint contains allegations of unlawful conduct. The allegations must be proven in federal court.
Individuals who believe that they may have been victims of sexual harassment or discrimination at rental dwellings owned or operated by Randy Hames or Hames Marina, or who have other information that may be relevant to this case, should contact the Housing Discrimination Tip Line, by calling 1-800-896-7743, pressing 1 to continue in English, and selecting mailbox 7 to leave a message.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability, and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.
Individuals who believe that they may have been victims of sexual harassment in housing should call the Justice Department at 1-844-380-6178, send an e-mail to [email protected], or contact the Department of Housing and Urban Development (HUD) at 1-800-669-9777. If you have information or questions about any other housing discrimination, you can contact the Justice Department at 1-800-896-7743.
Judge Sentences CPA to Prison for Helping Cyber Charter School CEO in Fraud SchemeRead the Press Release
PITTSBURGH, PA - A resident of Koppel, Pennsylvania, has been sentenced by a federal district court judge in Pittsburgh, Pennsylvania, to one year and a day in prison on charges of Criminal Conspiracy to Impede the Lawful Functions of the Internal Revenue Service in Ascertaining and Collecting Taxes, United States Attorney Scott W. Brady announced today.
Neal Prence, 62, entered a plea of guilty on September 28, 2016, to Count 6 (Criminal Conspiracy) of an Indictment that was returned by a grand jury against Prence and co-defendant Nicholas Trombetta in August of 2013. In his plea, Prence acknowledged that his actions had played a part in causing a tax loss to the Federal Government that Judge Conti found was $437,632.
According to the particular charges set forth in Count 6 of the Indictment, Prence, a certified public accountant, was instrumental in aiding the former head of the PA Cyber Charter School, Trombetta, in funneling approximately $8,000,000 from PA Cyber through an entity then known as NNDS and finally to a company called Avanti Management Group, where Trombetta had free access to the funds. Among the matters charged in Count 6 that were attributed to Prence were the filing of tax returns that attributed Trombetta’s income to the four straw owners of Avanti, the filing of false tax returns by Trombetta’s sister, Elaine Trombetta Neill, and the filing of false tax returns on behalf of Trombetta. All of this was done to disguise income that should have been reported by Trombetta, but was shifted to other persons or entities.
At the sentencing proceeding, Chief U.S. District Judge Joy Flowers Conti also imposed a three-year term of supervised release on Prence and ordered him to pay $50,000 in restitution to the IRS. Judge Conti stated that, "As a CPA, Prence knew what he was doing was illegal."
Assistant United States Attorneys Stephen R. Kaufman, Robert S. Cessar and James R. Wilson prosecuted this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation and the United States Department of Education – Office of Inspector General conducted the investigation leading to the prosecution of this case.
Judge Finds Ohio Man Guilty of Possessing CocaineRead the Press Release
PITTSBURGH, PA - Upon the conclusion of a non-jury trial before United States District Judge Reginald B. Walton, Judge Walton found Adolph Brown guilty of one count of possession with intent to distribute 500 grams or more of cocaine, United States Attorney Scott W. Brady announced today.
Brown, 47, formerly of Akron, Ohio, waived his right to a jury trial, resulting in a non-jury bench trial before the Honorable Judge Walton in Pittsburgh, Pennsylvania.
According to Assistant United States Attorneys Stephen S. Gilson and Eric Olshan, who prosecuted the case, the evidence presented at trial established that, on March 2, 2015, Adolph Brown traveled from Akron, Ohio, to Farrell, Pennsylvania, for the purposes of completing a sale of approximately 722 grams of cocaine. While on his way to Farrell, the vehicle Brown was traveling in was stopped by police and searched. The search resulted in the discovery of the cocaine hidden behind inside a child’s car seat in the back seat of the vehicle. Upon the discovery of the cocaine, Brown voluntarily spoke with special agents from the Federal Bureau of Investigation, who were leading the investigation In this interview with the FBI, Brown admitted that the cocaine was his and that he was on his way to sell the cocaine to a customer in Farrell. Drug lab reports later confirmed the amount and type of narcotics was approximately 722 grams of cocaine.
Judge Walton scheduled sentencing for November 13, 2018 at 2 p.m. The law provides for a total sentence of not less than 10 years and not more than life in prison, a fine not to exceed $8,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued the defendant’s detention.
The Federal Bureau of Investigation conducted the investigation thethat led to the prosecution of Adolph Brown, with assistance from the Southwest Mercer County Regional Police Department, the Pennsylvania State Police, and the Pennsylvania Attorney General’s Office.
Hurricane Felon Sentenced to Federal Prison for Gun CrimeRead the Press Release
CHARLESTON, W.Va. – A Hurricane man who possessed a firearm in April 2017 was sentenced today to 27 months in federal prison, announced United States Attorney Mike Stuart. Brandon Pistore, 34, previously pled guilty to being a felon in possession of a firearm. U.S. Attorney Stuart commended the investigative efforts of the St. Albans Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On April 19, 2017, an officer with the St. Albans Police Department stopped a vehicle Pistore was driving and discovered a gun. The officer seized the firearm, a Davis Industries, Model P380 pistol. Pistore later admitted that it was his gun. He was prohibited from possessing any firearm under federal law because of a 2006 federal drug conviction for conspiracy to manufacture methamphetamine.
“Just another felon with an illegal firearm,” said United States Attorney Mike Stuart. “So many felons and so many illegal firearms, too many press releases read the same. That’s okay. We are going to keep arresting and prosecuting them to the fullest extent of the law for the longest prison sentences possible.”
Assistant United States Attorney Meredith George Thomas was in charge of the prosecution. Senior United States District Judge David A. Faber handed down the sentence.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
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Health Quest and Putnam Hospital Center to Pay $14.7 Million to Resolve False Claims Act AllegationsRead the Press Release
Health Quest Systems, Inc. and certain of its subsidiaries (Health Quest) and Putnam Health Center (PHC) have agreed to pay over $14.7 million to resolve allegations of violations of the False Claims Act by submitting inflated and otherwise ineligible claims for payment, the Justice Department announced today. New-York based Health Quest is a family of integrated hospitals and healthcare providers that deliver surgical, medical and home health care services. PHC is a Health Quest subsidiary hospital based in Carmel Hamlet, New York.
“This resolution is a testament to our deep commitment to protecting the integrity of federally- funded healthcare programs,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division. “We are determined to hold accountable healthcare providers that knowingly claim taxpayer funds to which they are not entitled.”
In the settlement announced today, Health Quest and PHC admitted, acknowledged, and accepted responsibility for certain facts involving the submission of improper claims for various health-related services, including the following:
From April 1, 2009 through June 23, 2015, Health Quest submitted claims for evaluation and management services but did not sufficiently document the services to support the level of service billed. As a result, the services were billed two levels higher than supported by the medical record.
From April 1, 2011 through August 2014, Health Quest submitted claims for home health services that lacked sufficient medical records to support the claim, including documentation of a face-to-face encounter with a physician.
From March 1, 2014 through December 31, 2014, Health Quest subsidiary hospital, PHC, submitted allegedly false claims for inpatient and outpatient services referred to PHC by two orthopedic physicians, in alleged violation of the Physician Self-Referral Law. The two physicians had a direct financial relationship with PHC for providing administrative services and received compensation from PHC. The United States alleged their compensation exceeded the fair market value for the services, and thereby violated the Physician Self-Referral Law, which prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper compensation arrangement. The United States further alleged that one purpose of the excessive compensation was to induce the above referrals to PHC, in violation of the Anti-Kickback Statute.
“Today’s settlement holds Heath Quest responsible for false billings to federally funded health care programs, as well as claims tainted by a hospital’s payments to two physicians for administrative services where it appears that one purpose of those payments was to improperly induce referrals. Hospitals and providers must be vigilant to make sure that claims accurately reflect medical services provided and are supported by sufficient documentation. We will continue to investigate whistleblower complaints vigorously to protect public funds,” said United States Attorney Grant C. Jaquith for the Northern District of New York.
As part of the settlements announced today, Health Quest will pay an additional $895,427 to the State of New York, which jointly funds the State’s Medicaid program with the federal government.
Contemporaneously with the False Claims Act settlement, Health Quest also agreed to enter into a Corporate Integrity Agreement (CIA) with HHS-OIG to address future compliance.
“Government health program dollars are precious and need to be carefully guarded,” said Scott J. Lampert, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG). “Working closely with our law enforcement partners we will fight for the integrity of these taxpayer-funded programs.”
The settlement resolves three lawsuits brought by former employees of Health Quest under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. Tim Cleary will receive $1,893,092, John Betaudier and Carolyn Carroll will receive, collectively, $56,266, and Gregory Folta will receive at least $875,546.
The lawsuits, are captioned: United States, et al. ex rel. Folta v. Health Quest Systems, Inc., et al., No. 1:15-cv-396 (N.D.N.Y.); United States, et al. ex rel. Cleary v. Health Quest Systems, Inc., et al., No. 16-cv-76 (N.D.N.Y.); and United States, et al. ex rel. Betaudier and Carroll v. Health Quest Medical, Practice, P.C., et al., No. 1:16-cv-1344 (N.D.N.Y.).
The federal government’s resolution of these matters illustrate its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
These matters were investigated by the Civil Division’s Commercial Litigation Branch; the U.S. Attorney’s Office for the Northern District of New York; HHS-OIG; the FBI; and the U.S. Postal Service Office of Inspector General.
Health Quest and Putnam Hospital Center to Pay $14.7 Million to Resolve False Claims Act AllegationsRead the Press Release
SYRACUSE, NEW YORK - Health Quest Systems, Inc. and certain of its subsidiaries (Health Quest) and Putnam Health Center (PHC) have agreed to pay over $14.7 million to resolve allegations of violations of the False Claims Act by submitting inflated and otherwise ineligible claims for payment, the Justice Department announced today. New-York based Health Quest is a family of integrated hospitals and healthcare providers that deliver surgical, medical and home health care services. PHC is a Health Quest subsidiary hospital based in Carmel Hamlet, New York.
“This resolution is a testament to our deep commitment to protecting the integrity of federally- funded healthcare programs,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division. “We are determined to hold accountable healthcare providers that knowingly claim taxpayer funds to which they are not entitled.”
In the settlement announced today, Health Quest and PHC admitted, acknowledged, and accepted responsibility for certain facts involving the submission of improper claims for various health-related services, including the following:
From April 1, 2009 through June 23, 2015, Health Quest submitted claims for evaluation and management services but did not sufficiently document the services to support the level of service billed. As a result, the services were billed two levels higher than supported by the medical record.
From April 1, 2011 through August 2014, Health Quest submitted claims for home health services that lacked sufficient medical records to support the claim, including documentation of a face-to-face encounter with a physician.
From March 1, 2014 through December 31, 2014, Health Quest subsidiary hospital, PHC, submitted allegedly false claims for inpatient and outpatient services referred to PHC by two orthopedic physicians, in alleged violation of the Physician Self-Referral Law. The two physicians had a direct financial relationship with PHC for providing administrative services and received compensation from PHC. The United States alleged their compensation exceeded the fair market value for the services, and thereby violated the Physician Self-Referral Law, which prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper compensation arrangement. The United States further alleged that one purpose of the excessive compensation was to induce the above referrals to PHC, in violation of the Anti-Kickback Statute.
“Today’s settlement holds Heath Quest responsible for false billings to federally funded health care programs, as well as claims tainted by a hospital’s payments to two physicians for administrative services where it appears that one purpose of those payments was to improperly induce referrals. Hospitals and providers must be vigilant to make sure that claims accurately reflect medical services provided and are supported by sufficient documentation. We will continue to investigate whistleblower complaints vigorously to protect public funds,” said United States Attorney Grant C. Jaquith for the Northern District of New York.
As part of the settlements announced today, Health Quest will pay an additional $895,427 to the State of New York, which jointly funds the State’s Medicaid program with the federal government.
Contemporaneously with the False Claims Act settlement, Health Quest also agreed to enter into a Corporate Integrity Agreement (CIA) with HHS-OIG to address future compliance.
“Government health program dollars are precious and need to be carefully guarded,” said Scott J. Lampert, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG). “Working closely with our law enforcement partners we will fight for the integrity of these taxpayer-funded programs.”
The settlement resolves three lawsuits brought by former employees of Health Quest under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. Tim Cleary will receive $1,893,092, John Betaudier and Carolyn Carroll will receive, collectively, $56,266, and Gregory Folta will receive at least $875,546.
The lawsuits, are captioned: United States, et al. ex rel. Folta v. Health Quest Systems, Inc., et al., No. 1:15-cv-396 (N.D.N.Y.); United States, et al. ex rel. Cleary v. Health Quest Systems, Inc., et al., No. 16-cv-76 (N.D.N.Y.); and United States, et al. ex rel. Betaudier and Carroll v. Health Quest Medical, Practice, P.C., et al., No. 1:16-cv-1344 (N.D.N.Y.).
The federal government’s resolution of these matters illustrate its emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
These matters were investigated by the Civil Division’s Commercial Litigation Branch; the U.S. Attorney’s Office for the Northern District of New York; HHS-OIG; the FBI; and the U.S. Postal Service Office of Inspector General.
Hartford Man Sentenced to 3 Years in Federal Prison for Drug and Gun OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JOSEPH STEELE, also known as “Joey,” 32, of Hartford, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 36 months of imprisonment, followed by three years of supervised release, for drug and firearm offenses.
According to the evidence disclosed during his trial, on June 14, 2017, the Hartford Police Department’s Vice and Narcotics Unit received information that STEELE was in possession of a firearm while operating a white Cadillac. Investigators located the Cadillac and conducted a traffic stop at the intersection of Enfield Street and Capen Street. After STEELE consented to a search of the vehicle, investigators lifted a rear seat cushion and found a stolen .40 caliber semiautomatic pistol, 50 wax folds of fentanyl, and two knotted plastic bags containing approximately 6.5 grams of crack cocaine.
In April 2016, STEELE was convicted in Connecticut Superior Court of possession of a pistol without a permit, and was sentenced to 18 months of incarceration for that conviction. He was released from state prison in March 2017 and was serving a three-year term of probation when he was found in possession of the stolen firearm, fentanyl and crack.
On April 16, 2018, a jury found STEELE guilty of one count of possession with intent to distribute cocaine base (“crack”), one count of possession with intent to distribute fentanyl, and one count of possession of a firearm by a previously convicted felon. STEELE was acquitted of one count of possession of a firearm in furtherance of a drug trafficking crime.
STEELE has been detained since his arrest on June 14, 2017.
This investigation was conducted by the Hartford Police Department’s Vice and Narcotics Unit and the FBI’s Northern Connecticut Violent Crime Gang Task Force, which includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The case was prosecuted by Assistant U.S. Attorneys Michael J. Gustafson and Jocelyn Courtney Kaoutzanis.
This prosecution stems from Project Longevity, a comprehensive initiative to reduce gun violence in Connecticut’s major cities. Through Project Longevity, community members and law enforcement directly engage with members of groups that are prone to violence. A critical component of the Project Longevity strategy is the “call-in,” a face-to-face meeting where Project Longevity partners engage group members and deliver a community message against violence, a law enforcement message about the consequences of further violence and an offer of help for those who want it. STEELE attended a call-in in May 2017 and declined Project Longevity services that were offered to him.
Harrison County man admits to methamphetamine chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA –Jacob Renard White, of Clarksburg, West Virginia, has admitted to methamphetamine distribution, United States Attorney Bill Powell announced.
White, age 30, pled guilty to one count of “Conspiracy to Possess with Intent to Distribute and Distribute Methamphetamine.” White admitted to distributing methamphetamine in February of 2017 in Harrison County.
White faces up to 20 years incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Andrew R. Cogar is prosecuting the cases on behalf of the government. The Greater Harrison Drug and Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Greensboro Man Sentenced to 32 Years in Prison for Extensive Bank Lien Theft Scheme, Money Laundering, & Aggravated Identity TheftRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that today in federal court Senior United States District Judge W. Earl Britt sentenced XAVIER MILTON EARQUHART, 31, of Greensboro, NC to serve 32 years in prison and 5 years of supervised release on ten counts of Bank Fraud, two counts of Engaging in Monetary Transactions Involving Criminally Derived Property and one count of Aggravated Identity Theft and Aiding and Abetting. EARQUHART was also ordered to make restitution in the amount of $1,570,561.86, and to forfeit a stash of gold bullion, cash, and studio equipment previously seized by law enforcement. Today’s sentencing follows a three-day jury trial in March in which a jury convicted EARQUHART on all counts.
The evidence at trial showed that, in one bank fraud scheme, the defendant forged a deed on a property owned by an out of state landowner, and then channeled the property ownership through fictitious individuals and a holding company before personally taking title to the property. The defendant then attempted to secure $495,000 in home equity loans using the property as collateral, becoming successful on three such attempts.
In a second scheme, the evidence showed that the defendant forged bank lien releases on 8 properties, in some instances, by stealing the identities of bank employees, and in other instances, using fictitious notaries. The defendant created Delaware holding companies to conceal his activities. The defendant then sold the properties off to unknowing third parties. At trial, the evidence showed that because of the defendant’s actions, some homeowners lost the funds that they had invested into the properties. Other victims were left uncertain as to the ability of their families to remain in the homes due to the cloud upon their title.
Lastly, the evidence at trial included evidence from law enforcement concerning the tracing of the defendant’s fraudulent gains. Law enforcement used a note and key found in the defendant’s Prius to uncover a hidden trove of $300,000 worth of gold, concealed in a storage unit in Spring, Texas. Law enforcement also seized various items of valuable recording studio equipment.
United States Attorney Robert J. Higdon, Jr. stated: “This was a crime that hurt not just banks, but also individuals and families who feared they would lose their homes through no fault of their own. The defendant will have plenty of time to think about the harm he has caused during the next 32 years in prison. I want to recognize the great work of IRS Criminal Investigation who tracked down and seized the defendant’s treasure chest filled with hundreds of thousands of dollars in gold bullion which will now benefit the victims in this case.”
"Today's announcement exemplifies the intense focus our Special Agent’s engage in when unraveling complex schemes such as this one orchestrated by Xavier Earquhart,” said Special Agent in Charge of the IRS Criminal Investigation, Charlotte Field Office, Matthew D. Line. “Earquhart’s scheme was driven by insatiable greed and a blatant disregard for the tremendous damage inflicted on innocent victims. Be assured that IRS Criminal Investigation will continue to work with our law enforcement partners to hold those who engage in similar behavior fully accountable."
The investigation of this case was conducted by the IRS Criminal Investigation, with the assistance of the Federal Deposit Insurance Corporation Office of the Inspector General, and the Wake County Register of Deeds. Assistant United States Attorney William M. Gilmore represented the government in this case.
Former NBA Player Sentenced for False Tax Returns, Identity Theft Related to Charity Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – A former professional basketball player was sentenced in federal court today on charges related to an extensive charity fraud scheme.
Kermit Alan Washington, 66, of Las Vegas, Nev., was sentenced by U.S. District Judge Greg Kays six years in federal prison without parole. The court also ordered Washington to pay $967,158 in restitution. Washington was taken into federal custody at the conclusion of today’s sentencing hearing.
“This former NBA player abused his fame and status to promote a charity scam by which he raised hundreds of thousands of dollars that he diverted to personal spending on lavish vacations, shopping sprees, and even plastic surgery for his girlfriend,” said Garrison. “Although he told his donors that 100 percent of all donations would go to support charitable work in Africa, including a medical clinic for needy families and HIV-positive children, in fact he spent most of the donated funds on himself. His fraud scheme also victimized law-abiding taxpayers by stealing from the public treasury rather than paying taxes owed.”
On Nov. 30, 2017, Washington pleaded guilty to two counts of filing a false tax return and one count of aggravated identity theft. Washington is among 11 defendants who have been convicted in several cases arising from the investigation of one of the largest software piracy schemes ever prosecuted by the U.S. Department of Justice. Investigators seized more than $20 million in assets from conspirators who are estimated to have sold in excess of $100 million worth of illicit, unauthorized and counterfeit software products to thousands of online customers.
eBay/PayPal Software Piracy Fraud Scheme
Washington’s charity, The Sixth Man Foundation, doing business as Project Contact Africa, operated an eBay store and used a PayPal account to facilitate payments. Approximately $12 million in items, including unauthorized, illicit, and counterfeit software and software components were sold on the Project Contact Africa eBay store.
In a separate but related case, Reza Davachi of Damascus, Md., pleaded guilty to a fraud scheme for abusing the benefits afforded a charity in these sales on Project Contact Africa’s eBay store.
Customers of the charity’s eBay store were under the impression that “100 percent” of the proceeds of sales were intended to go to the charity when, in fact, only a portion of the proceeds actually went to the charity. Washington admitted that he diverted funds from the charity’s bank account to pay himself or for personal spending, such as rent, credit card payments, vacation trips and plastic surgery for his then-girlfriend. Washington claimed to pay the rent and school fees for a family in Africa when, in fact, these payments were to a former prostitute, and rose and fell depending on their level of sexual intimacy.
By using the charity’s account to sell items through the eBay charity store, conspirators saved thousands of dollars per month that would have otherwise been paid to eBay in the form of various fees. As a result, eBay/PayPal sustained losses of approximately $908,231 due to the waived fees.
Workers’ Compensation Referral Scheme
Washington also admitted that he referred professional athletes to attorney Ronald Jack Mix, 80, of San Diego, Calif., so that Mix could file workers’ compensation claims in the state of California on behalf of the athletes. Mix then agreed to make donations to Washington’s charity.
Washington accepted approximately $155,000 in donations to his charity, which were actually illegal referral payments from Mix and his law firm. Washington diverted those funds from the charity’s bank account to pay himself or for personal spending. Washington admitted that he failed to account for this income to the charity on Project Contact Africa’s IRS filings during those years.
In a separate but related case, Mix pleaded guilty to filing a false tax return. Mix admitted that he made donations ranging from $5,000 to $25,000 for referrals of athletes, some of whom lived in the Western District of Missouri. Mix then claimed those payments as charitable contributions on his individual tax returns from 2010 to 2013. Mix was sentenced to time served and ordered to pay $49,543 in restitution.
False Tax Returns, Identity Theft
According to court documents, Washington diverted charity proceeds and failed to declare this income on federal income tax returns from 2010 to 2014. During this time, Washington also improperly claimed tens of thousands of dollars in personal charitable deductions. Washington’s additional tax due for his underreported income is $90,181.
Additionally, Washington is assessed $876,977 in excess benefit taxes related to the payment of excess benefits to a disqualified person (the use of charity funds for personal purposes by an officer of a charity). Washington’s accumulated tax loss for 2010 through 2014 thus totals $976,158.
Washington specifically pleaded guilty to filing a materially false individual tax return on Feb. 18, 2014, and to filing a materially false Form 990-EZ for his tax-exempt organization on Aug. 20, 2012.
Washington also specifically pleaded guilty to using the name, personal address and business address of another person without lawful authority in numerous state and federal filings on behalf of the charity. The identity theft victim, identified in court documents as “T.G.”, was a resident of Oregon. Washington admitted that he used her identity information so that Project Contact Africa could maintain its active status within the state of Oregon, which enabled the charity to receive the charitable donations and to maintain the charity store on eBay.
This case was prosecuted by Assistant U.S. Attorneys Patrick Daly and Curt Bohling in the Western District of Missouri and Assistant U.S. Attorney Ryan Raybould of the Middle District of Tennessee (formerly of the Department of Justice Tax Division). It was investigated by IRS-Criminal Investigation and Immigration and Customs Enforcement’s Homeland Security Investigations.