Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
28 June 2018
Investment Advisor Pleads Guilty to Investment FraudRead the Press Release
BOISE - Rick Guyon, a/k/a, Richard Guyon, a/k/a Rick Garrison, a/k/a Mark Thomas, 59, pleaded guilty yesterday to one count of wire fraud, U.S. Attorney Bart M. Davis announced. Pursuant to a written plea agreement filed with the court, Guyon pleaded guilty to count five of the indictment.
According to the plea agreement, from 2015 through 2017, Guyon devised a scheme to defraud individual investors. The scheme involved soliciting $1,956,400 from investors based on false and fraudulent representations about the defendant’s education, employment history, and financial condition, and false and fraudulent representations that the money would be invested in financial markets and that the defendant would not collect any commissions on the investments. Once he obtained the money, he spent it on personal expenses. To cover up what he had done, Guyon provided investors with false and fraudulent monthly account statements showing positive returns on investments.
According to the plea agreement, Guyon’s scheme to defraud investors (i) resulted in an actual loss of between $1,500,000 and $3,500,000; (ii) resulted in a substantial financial hardship to an investor-victim who personally lost approximately $1,281,783; and (iii) involved the defendant acting as an organizer and leader of at least three other participants in the scheme.
Sentencing for Guyon is set for October 9, 2018, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise.
The case was investigated by the Federal Bureau of Investigation.
# # #
Illegal Alien Sentenced to 27 Months in Federal Prison for Human SmugglingRead the Press Release
Gulfport, Miss. – Kenneth Samuel Hernandez-Valdez a/k/a Kenneth Hernandez, 18, an illegal alien from Honduras, was sentenced today by U.S. District Judge Louis Guirola, Jr. to 27 months in federal prison followed by two years of supervised release, for conspiracy to transport illegal aliens within the United States, announced U.S. Attorney Mike Hurst, Special Agent in Charge Jere T. Miles of U.S. Immigration and Customs Enforcement's Homeland Security Investigations in New Orleans, and Joseph A. Banco Jr., Acting Chief Patrol Agent of the U.S. Border Patrol’s New Orleans Sector.
As a result of this felony conviction, Hernandez-Valdez will face Department of Homeland Security removal proceedings upon the completion of his prison sentence. Hernandez-Valdez pled guilty on April 3, 2018, to conspiracy to transport illegal aliens with the United States.
On January 30, 2018, two Hancock County Sheriff’s Deputies, working together but in separate patrol vehicles, conducted traffic stops of two Honda Pilot Sport Utility Vehicles (SUVs) that were traveling together. Hernandez-Valdez was the driver of one of the SUVs and Ever Anibal Silva-Escobar was the driver of the other SUV. The U.S. Border Patrol was contacted and arrived on the scene shortly thereafter.
Neither of the drivers had a valid driver’s license, and both were found to be in the United States illegally. Each vehicle contained eight passengers who also were found to be illegal aliens. The SUVs each contained a total of nine occupants even though each vehicle only had seat belts for eight occupants. All eighteen occupants of both vehicles were arrested and transported to the Border Patrol Station in Gulfport.
On April 12, 2018, Silva-Escobar pled guilty to conspiracy to transport illegal aliens within the United States. He is scheduled to be sentenced on July 17, 2018.
Four of the passengers in the SUVs have pled guilty to unlawful re-entry by an alien after deportation or removal: Pedro Lopez-Alvarez, a/k/a Pedro Alvarez-Baten, 21, an illegal alien from Guatemala; Silvano Doroteo Morales-Ventura, 23, an illegal alien from Mexico; Wilmer Antonio Rubi-Padilla, 25, an illegal alien from Honduras, and Yesica Paola Rojas-Baten, 19, an illegal alien from Guatemala.
Lopez-Alvarez, Morales-Ventura and Rubi-Padilla are scheduled to be sentenced on July 3, 2018, and Rojas-Baten is scheduled to be sentenced on August 2, 2018. Each of the four aliens who unlawfully returned after removal faces a maximum penalty of two years in prison and a $250,000 fine. All of the defendants will be subject to Department of Homeland Security removal proceedings upon the completion of their sentences.
The case was investigated by Homeland Security Investigations, the U.S. Border Patrol, and the Hancock County Sheriff’s Department. Assistant United States Attorney Stan Harris was the prosecutor for the case.
Illegal Alien Ordered to Prison for Multiple ChargesRead the Press Release
HOUSTON – A 58-year-old an illegal alien from Mexico has been sentenced following his conviction of harboring illegal aliens, using a firearm during a crime of violence, illegal re-entry and being an alien in possession of a firearm, announced U.S. Attorney Ryan K. Patrick. J. Matias Picazo-Lucas pleaded guilty March 7, 2018.
Today, U.S. District Judge Keith Ellison handed Picazo-Lucas a total 96-month sentence. Not a U.S. citizen, he is expected to face deportation proceedings following the sentence
On Aug. 3, 2017, an individual contacted Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) to report that a person had been smuggled into the United States and was being held against his will in Houston. That person advised that the unknown smugglers were demanding money in return for the release of the alien.
An undercover agent called the smuggler and arranged to meet him at a grocery store on Bellaire Boulevard to conduct a buyout of the relative. Law enforcement was on the scene when Picazo-Lucas arrived with two aliens who were being held. The agent and Picazo-Lucas discussed the payment, after which time authorities took Picazo-Lucas into custody. At the time of his arrest, he was found to be carrying a loaded .38 caliber pistol.
The two aliens were here illegally from Guatemala and indicated Picazo-Lucas and another individual, subsequently identified as Omar Picazo-Torres, had transported them to Houston in a tractor-trailer. Picazo-Lucas and Picazo-Torres held the hostages at gunpoint in order to intimidate them and prevent their escape.
The conspirators made phone calls to the person who had reported the kidnapping and other friends and family members of the hostages demanding payment for the release of the hostages.
Picazo-Lucas will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Mexican National Omar Picazo-Lucas, 20, remains a fugitive and a warrant has been issued for his arrest. Anyone with information about his whereabouts is asked to contact HSI at 866-DHS-2-ICE.
HSI, Brazoria County Sheriff’s Office and the Houston Police Department conducted the investigation. Assistant U.S. Attorneys Douglas Davis and Kevin Lear are prosecuting the case.
Idaho Man Sentenced to 25 Years in Federal Prison for Second Degree MurderRead the Press Release
PORTLAND, Ore. – Julian Darryl James Simpson, 25, of Lewiston, Idaho, was sentenced today to 300 months in federal prison following his conviction for second degree murder. Simpson, an enrolled member of the Confederated Tribes of the Umatilla Indian Reservation, pleaded guilty to this charge on October 27, 2017.
According to court documents, on March 19, 2016, Simpson and codefendant Victor Joseph Contreras attended a party on the Confederated Tribes of the Umatilla Indian Reservation. As a result of escalating disputes between suspected gang members at the party, Simpson and Contreras were asked to leave.
When other party goers left the house, Simpson and Contreras opened fire on them using semiautomatic pistols. Simpson fired at least one shot at a victim, striking him in the back of the head, and fired additional shots into a nearby car. Contreras, upon hearing the gunshots, fired more than 20 rounds into the crowd of party goers, striking a second victim just above the ankle. The first victim was medically evacuated to a nearby hospital but later died from his injuries. Simpson was arrested a week later in Lewiston with the firearm used to kill the victim.
Contreras pleaded guilty to assault resulting in serious bodily injury and possession of a firearm in furtherance of a crime of violence on July 5, 2017. His sentencing is scheduled for July 19, 2018.
The case was jointly investigated by the FBI and the Umatilla Tribal Police Department, and prosecuted by Scott M. Kerin, Jennifer J. Martin, Paul T. Maloney, and John C. Brassell, Assistant U.S. Attorneys for the District of Oregon.
Husband and Wife Charged with Health Care FraudRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that a federal grand jury in New Haven returned a 17-count indictment yesterday charging KWASI GYAMBIBI, 40, of Stamford, and KAKRA GYAMBIBI, 37, formerly of New Canaan and currently residing in Maryland, with health care fraud offenses.
KWASI GYAMBIBI was arrested this morning in Stamford. He was arraigned before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven, entered not guilty pleas to the charges, and was released on bond. KAKRA GYAMBIBI is expected to appear in federal court to answer the charges by July 2, 2018.
As alleged in the indictment, KWASI GYAMBIBI and KAKRA GYAMBIBI are married. KWASI GYAMBIBI was formerly employed by the State of Connecticut and worked at UConn-Stamford, and KAKRA GYAMBIBI is a physician who worked as a hospitalist at Stamford Hospital. Advantage Pharmacy was a compounding pharmacy located in Hattiesburg, Mississippi. As a compounding pharmacy, Advantage created compound prescription drugs specifically tailored for individual patients who had a medical need for a compound drug, by mixing together individual ingredients in the exact strength and dosage prescribed by the health care provider to meet the unique needs of a patient. One tube of a compound drug cream prepared and dispensed by Advantage Pharmacy typically cost health care benefit programs thousands of dollars, and some individual tubes of cream cost more than $10,000 for a one-month supply. KWASI GYAMBIBI acted as, and eventually became, a sales representative for Advantage Pharmacy.
The indictment alleges that, in 2014 and 2015, KWASI and KAKRA GYAMBIBI engaged in a scheme to defraud the State of Connecticut Pharmacy Benefit Plan, TRICARE and other health care programs by submitting prescriptions for compound pharmacy medications prepared and dispensed by Advantage Pharmacy. Although the prescriptions were signed by KAKRA GYAMBIBI, she did not treat, examine, or even meet with the patients for whom the prescriptions were written. Based on these false and misleading claims, the victim health care programs paid Advantage Pharmacy for the compound prescription drugs. Advantage Pharmacy, in tum, paid commissions of between 15 percent to 25 percent to sales representatives, including KWASI GYAMBIBI’s cousin.
The indictment further alleges that KWASI GYAMBIBI and KAKRA GYAMBIBI also induced the victim health care programs to pay Advantage Pharmacy more than $280,000 for their own compound prescription drugs.
It is alleged that the scheme resulted in more than $1.5 million in losses to the victim health care programs.
The indictment charges each defendant with 16 counts of health care fraud and one count of conspiracy to commit health care fraud. Each of the counts carries a maximum term of imprisonment of 10 years.
U.S. Attorney Durham stressed that an indictment is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation is being conducted by the Federal Bureau Investigation. U.S. Attorney Durham thanked the Office of the Attorney General of the State of Connecticut for their assistance with the investigation. The case is being prosecuted by Assistant U.S. Attorney David J. Sheldon.
This indictment is announced as part of a national health care fraud takedown. Earlier today, Attorney General Jeff Sessions and other federal law enforcement officials announced the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, The U.S. Department of Health and Human Services announced that, since July 2017, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.
“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”
Honduran Man Pleads Guilty to Conspiring to Launder over $1 Million in Bribes and Funds Misappropriated from the Honduran Social Security AgencyRead the Press Release
A Honduran man pleaded guilty in federal court yesterday for his role in a conspiracy to launder into the United States more than $1.3 million in foreign bribe payments and public funds from the Republic of Honduras. Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Deputy Director Thomas D. Homan of U.S. Immigration and Customs Enforcement (ICE) made the announcement.
Carlos Zelaya, 47, a citizen of Honduras who was residing in the New Orleans area, pleaded guilty before U.S. District Judge Martin L.C. Feldman of the Eastern District of Louisiana to one count of conspiracy to commit money laundering. Sentencing is set for Oct. 3 at 1:30 p.m. CT.
According to admissions made as part of the plea agreement, Carlos Zelaya conspired with his brother, the former Executive Director of the Honduran Institute of Social Security, and others to launder over $1.3 million in bribe payments. These bribes were paid by two Honduran businessmen for the benefit of the Executive Director. The funds were then laundered into the New Orleans area through international wire transfers and used to purchase real estate, including for a commercial property. Carlos Zelaya collected and spent the rental income derived from the properties, even after a federal judge ordered him to preserve the funds pending resolution of a federal civil forfeiture suit. During that case, he also made false statements to the U.S. government in written discovery responses and to a federal judge in the Eastern District of Louisiana while testifying under oath. As part of the conspiracy, Carlos Zelaya also used his brother’s high-ranking official position to profit from lucrative Honduran government contracts and then laundered the misappropriated funds into the New Orleans area. Under the terms of the plea agreement, Carlos Zelaya agreed to forfeit those properties.
The investigation was conducted by ICE Homeland Security Investigations New Orleans and Miami. The case is being prosecuted by Trial Attorneys Stephen A. Gibbons, Marybeth Grunstra, and Michael B. Redmann of the Criminal Division’s Money Laundering and Asset Recovery Section with assistance from the U.S. Attorney’s Office for the Eastern District of Louisiana. Valuable assistance was provided by the Justice Department’s Office of International Affairs.
This case was brought under the Department of Justice’s Kleptocracy Asset Recovery Initiative by a team of prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section. These prosecutors partner with federal law enforcement agencies to prosecute those who engage in and facilitate foreign official corruption which has effects on the U.S. financial system, to forfeit assets purchased with the proceeds of that corruption, and, where appropriate, to repatriate the recovered funds for the benefit of the people of the country harmed by such abuse of public office. Individuals with information about possible proceeds of foreign corruption located in, or laundered through, the United States should contact federal law enforcement or send an email to [email protected].
Honduran Man Pleads Guilty to Conspiring to Launder over $1 Million in Bribes and Funds Misappropriated from the Honduran Social Security AgencyRead the Press Release
A Honduran man pleaded guilty in federal court yesterday for his role in a conspiracy to launder into the United States more than $1.3 million in foreign bribe payments and public funds from the Republic of Honduras. Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Deputy Director Thomas D. Homan of U.S. Immigration and Customs Enforcement (ICE) made the announcement.
Carlos Zelaya, 47, a citizen of Honduras who was residing in the New Orleans area, pleaded guilty before U.S. District Judge Martin L.C. Feldman of the Eastern District of Louisiana to one count of conspiracy to commit money laundering. Sentencing is set for Oct. 3 at 1:30 p.m. CT.
According to admissions made as part of the plea agreement, Carlos Zelaya conspired with his brother, the former Executive Director of the Honduran Institute of Social Security, and others to launder over $1.3 million in bribe payments. These bribes were paid by two Honduran businessmen for the benefit of the Executive Director. The funds were then laundered into the New Orleans area through international wire transfers and used to purchase real estate, including for a commercial property. Carlos Zelaya collected and spent the rental income derived from the properties, even after a federal judge ordered him to preserve the funds pending resolution of a federal civil forfeiture suit. During that case, he also made false statements to the U.S. government in written discovery responses and to a federal judge in the Eastern District of Louisiana while testifying under oath. As part of the conspiracy, Carlos Zelaya also used his brother’s high-ranking official position to profit from lucrative Honduran government contracts and then laundered the misappropriated funds into the New Orleans area. Under the terms of the plea agreement, Carlos Zelaya agreed to forfeit those properties.
The investigation was conducted by ICE Homeland Security Investigations New Orleans and Miami. The case is being prosecuted by Trial Attorneys Stephen A. Gibbons, Marybeth Grunstra, and Michael B. Redmann of the Criminal Division’s Money Laundering and Asset Recovery Section with assistance from the U.S. Attorney’s Office for the Eastern District of Louisiana. Valuable assistance was provided by the Justice Department’s Office of International Affairs.
This case was brought under the Department of Justice’s Kleptocracy Asset Recovery Initiative by a team of prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section. These prosecutors partner with federal law enforcement agencies to prosecute those who engage in and facilitate foreign official corruption which has effects on the U.S. financial system, to forfeit assets purchased with the proceeds of that corruption, and, where appropriate, to repatriate the recovered funds for the benefit of the people of the country harmed by such abuse of public office. Individuals with information about possible proceeds of foreign corruption located in, or laundered through, the United States should contact federal law enforcement or send an email to [email protected].
Honduran Man Admits Illegal Re-entry into United StatesRead the Press Release
ALBANY, NEW YORK – Jose Isaias Guerrero, a/k/a Jose Isaias Herrera, age 40, and a citizen of Honduras, pled guilty today to illegal re-entry into the United States.
The announcement was made by United States Attorney Grant C. Jaquith and Thomas E. Feeley, Director of the Buffalo Field Office of Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations (ERO).
Guerrero was removed from the United States to Mexico on October 19, 2010 and again on November 26, 2010. On April 20, 2018, ICE-ERO Officers arrested him in Greene County, New York. Guerrero admitted that he returned to the United States without permission following the prior removals.
Guerrero faces up to 2 years in prison and a fine of up to $250,000 when he is sentenced by Senior United States District Judge Lawrence E. Kahn on October 25, 2018. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case was investigated by ICE-ERO and prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Hattiesburg Couples’ Civil Lawsuit Against FBI and IRS Chiefs DismissedRead the Press Release
Hattiesburg, Miss. – Two lawsuits filed by former Forest County Sheriff’s Chief Deputy Charles Bolton and his wife, Linda Bolton, against the head of FBI’s Mississippi Field Office and the former head of the IRS’s Criminal Investigative Division for Mississippi have been dismissed by United States District Judge Keith Starrett.
The Boltons, both convicted of federal tax-related charges in 2016, alleged in their lawsuits that in April 2017, FBI Special Agent in Charge Christopher Freeze and former IRS Special Agent in Charge Jerome McDuffie made slanderous statements about them while appearing on a WDAM televised news program. According to the Boltons, both officials misrepresented as fact that the Boltons had stolen food from the Forrest County Jail and diverted it into their personal business. The United States Attorney’s Office for the Southern District of Mississippi asked the Court to substitute the United States for the individual defendants and to then dismiss the actions for lack of jurisdiction.
In granting the United States’ requests, Judge Starrett noted that, in September 2016, the Boltons were convicted in his court of federal tax-related crimes and that in March 2017, they were sentenced to prison and ordered to pay fines and restitution. Judge Starrett also noted that as part of the sentencing he considered other relevant conduct of the Boltons, which included evidence that they had stolen food from the Forrest County Jail, used it in their catering and restaurant business, and failed to pay taxes on the value of the stolen food. Judge Starrett found that the alleged slanderous statements attributed to SAC Freeze and former SAC McDuffie were made while they were acting within the course and scope of their employment as federal law enforcement officials and, consequently, the Boltons’ exclusive remedy was an action against the United States under the Federal Tort Claims Act. He also found that, because the Boltons had not presented their slander claims to either the FBI or the IRS prior to filing suit as required by the Federal Tort Claims Act, the Court lacked jurisdiction over those claims.
U.S. Attorney Hurst commended Assistant United States Attorney Stephen R. Graben who represented SAC Freeze and former SAC McDuffie.
Grandview Man Pleads Guilty to Armed Robbery Conspiracy, Faces 25 Years in PrisonRead the Press Release
KANSAS CITY, Mo. – A Grandview, Mo., man pleaded guilty in federal court today to his role in a three-months-long conspiracy that included at least 27 armed robberies, culminating in the armed robbery of a Walgreens in Blue Springs, Mo., in which a suspect was fatally shot by law enforcement officers.
Deonte J. Collins-Abbott, 23, pleaded guilty before U.S. Chief District Judge Greg Kays to participating in a conspiracy to commit robbery and to possessing a firearm in furtherance of a crime of violence.
By pleading guilty today, Collins-Abbott admitted that he committed eight armed robberies between Feb. 3, 2016, and March 24, 2016. Collins-Abbott admitted that he and co-conspirators robbed businesses in Blue Springs, Independence, North Kansas City, Raytown, Kansas City, Mo., and Kansas City, Kan., at gunpoint.
Collins-Abbott admitted that he and two other men robbed the Walgreens at 9th and Duncan in Blue Springs on March 24, 2016. According to court documents, once inside, one of the robbers placed a firearm to the back of an employee’s head and took money from the front register. Collins-Abbott and Jermon Seals of Shawnee, Kan., went over the pharmacy counter and took prescription grade cough syrup at gunpoint from the pharmacist. They left the business but were confronted by law enforcement officers as they were walking back to the vehicle. They failed to comply with the officers’ commands, according to the court documents, and Seals turned towards the officers, pointing a gun in their direction. Officers returned fire and Seals was struck in the exchange. Collins-Abbott and Thomas were apprehended by officers after a short foot pursuit.
Co-defendants Demetrius Nelson, 25, of Kansas City, Mo., and Parrise K. Black, also known as “Kilo,” 26, of Grandview, have also pleaded guilty.
Under the terms of today’s plea agreement, Collins-Abbott will be sentenced to 25 years in federal prison without parole. 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 Adam Caine and David Raskin. It was investigated by the FBI, the Kansas City, Mo., Police Department, the Independence, Mo., Police Department, the North Kansas City, Mo., Police Department, the Kansas City, Kan., Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Marshals Service.
Four Individuals Indicted with Charges Related to Running Pills in Hamilton, Defrauding MedicaidRead the Press Release
CINCINNATI – A federal grand jury has charged four individuals in three separate cases related to pill mills in Hamilton, Ohio. The charging documents allege responsibility for the death of at least three patients and more than $2.4 million in healthcare fraud.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Ohio Attorney General Mike DeWine, Anthony Groeber, Executive Director, State Medical Board of Ohio, Steven Schierholt, Executive Director, State of Ohio Board of Pharmacy, and Sarah D. Morrison, Administrator, Ohio Bureau of Workers Compensation, announced the charges.
Dr. Saad Sakkal
According to a 39-count indictment returned in Cincinnati, Sakkal engaged in the illegal distribution of prescription drugs, including opioids. Sakkal is charged with being responsible for the deaths of at least two patients, who died in 2016, due to complications resulting from drug use.
Sakkal, who was arrested by federal agents in Florida today, began practicing at Lindenwald Medical Association, Inc. in Hamilton, Ohio in February 2015. He also owned and operated the medical practice Metabolic Care Center in Mason, Ohio.
It is alleged that Sakkal prescriped medically-dangerous combinations of controlled substances, including:
- “Holy Trinity,” which consists of an opiate, a benzodiazepine and a stimulant,
- “Prescriptive Speedball” that includes an opiate and a stimulant, and
- “Triple Threat Heaven,” which consists of methadone, a benzodiazepine and a stimulant.
“According to the indictment, after Sakkal joined Lindenwald Medical Association the type of patients changed, with patients waiting long periods of time in order to see Sakkal, including waiting outside in the parking lot for the practice to open,” U.S. Attorney Glassman said.
Numerous pharmacies denied to fill Sakkal’s prescriptions, and pharmacists even called Sakkal to warn him of the risks inherent in his prescribing practices.
In response, on December 31, 2016, Sakkal organized and led a small group of his patients on a series of protests at local pharmacies, demanding that they continue to fill his prescriptions.
Dr. Nilesh Jobalia
According to the indictment in this case, Jobalia, 53, of Cincinnati, owned and operated Cincinnati Centers for Pain Relief in Hamilton, Ohio from March 2013 through December 2017. Although the practice was not registered as such, it allegedly operated almost exclusively as a pain clinic.
The 114-count indictment alleges patients were prescribed fentanyl, oxycodone, methadone, morphine and other controlled substances on many occasions without actually being seen by the doctor. According to the indictment, at least one patient died as a result of using the prescribed controlled substances.
Jobalia’s practice also billed Medicare, Medicaid and the Bureau of Workers’ Compensation for medically unnecessary prescriptions.
“For example, prescriptions to one customer alone caused the Bureau of Workers’ Compensation to pay more than $450,000 for medically unnecessary drugs,” Glassman said. “In total, it is alleged that Jobalia caused more than $2 million in false claims.”
It is also alleged that Jobalia received more than $103,000 from a pharmaceutical company for purported speaking engagements about a Fentanyl Spray, a medication intended for breakthrough cancer pain.
The speaking engagements were actually sham programs, though, according to the indictment, in which many attendees were not medical professionals permitted to prescribe Fentanyl Spray. Usually, Jobalia, some of his staff and the pharmaceutical sales representative were the only people present at the engagements, which were held at fine dining restaurants in the Cincinnati area. It is alleged that Jobalia received $1,600 to $2,200 per “speaking engagement” on 17 separate occasions.
Jobalia is charged with 88 counts of unlawful distribution of a controlled substance, one count of unlawful distribution of a controlled substance with death resulting, eight counts of health care fraud and 17 counts of violating the anti-kickback law.
This case is a result of the Department of Justice’s Opioid Fraud and Abuse Detection Unit’s investigative efforts. United States Attorney General Jeff Sessions announced last summer that the Southern District of Ohio is one of 12 Districts nationwide to receive the pilot program designed to focus specifically on opioid-related health care fraud.
Lindenwald Medical Association, Inc.
Three individuals are charged in the indictment alleging Lindenwald Medical Association, Inc. overcharged Medicare and Medicaid by approximately $400,000 by upcoding billing codes for medical services.
The four-count indictment includes one count of conspiracy to commit health care fraud and three counts of health care fraud.
Dr. Rakesh Sharma, 47, of Alachua, Fla., is the previous owner of Lindenwald Medical Association, Inc. He allegedly directed employees to see as many patients per day as they could, typically between 40 and 60 per provider. He also promised bonuses based on the receivables in the office.
It is alleged that patients were given very cursory exams and then prescribed controlled substances.
“The indictment alleges that urine tests were given to patients but never reviewed,” Glassman said. “In fact, according to the charging document, the results of those urine tests showed that patients were not taking the prescriptions, but likely diverting them.”
The indictment also alleges Sharma and co-conspirator Mike Jones, 51, of Liberty Township, Ohio – a nurse practitioner at the practice, ordered genetic tests regardless of medical necessity and received kickbacks from the labs processing the tests.
The three Southern District of Ohio cases are part of the largest health care fraud enforcement action in Department of Justice history this week, which resulted in at least 76 doctors charged and 84 opioid cases involving more than 13 million illegal dosages of opioids. The national takedown includes charges across 58 federal districts against more than 600 individuals total, who are allegedly responsible for more than $2 billion in fraud losses.
“Health care fraud is a threat to this country, both in terms of the well-being of patients and the integrity of government health care programs,” said Lamont Pugh, Special Agent in Charge for the U.S. Department of Health & Human Services Office of Inspector General. “Our agents will continue to work with our law enforcement partners to ensure these criminals are held accountable for their actions.”
“At the Ohio Attorney General’s Office, we’re committed to protecting Ohio families. Collaborating on the investigation and prosecution of cases like these is one of the ways we fulfill that mission,” Ohio Attorney General Mike DeWine said.
U.S. Attorney Glassman commended the investigation of the local cases by the HHS OIG, DEA, Ohio Medical and Pharmacy boards, Bureau of Workers’ Compensation and Ohio Attorney General’s Medicaid Fraud Unit, as well as Assistant United States Attorneys Salvador A. Dominguez, Timothy Oakley and Timothy Mangan and Special Assistant United States Attorney Maritsa Flaherty, who are prosecuting the cases.
An indictment merely contains allegations, and defendants are presumed innocent unless proven guilty in a court of law.
# # #
Four Individuals Charged in the Northern District of Florida as Part of National Health Care Fraud TakedownRead the Press Release
PENSACOLA, FLORIDA – Michael Scott Burton, 51, of Decatur, Georgia; Marie Ann Smith, 54, of Auburn, Georgia; Bradley D. Pounds, 46, of Jacksonville, Florida; and Heather E. Pounds, 45, also of Jacksonville, were arraigned on Tuesday, June 26, after a federal grand jury returned an indictment charging them with conspiracy to commit health care fraud and wire fraud. Additionally, Burton was charged with conspiracy to commit money laundering and 10 counts of money laundering. The indictment was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
The indictment alleges the following:
TRICARE and other private insurance companies were defrauded of more than $8 million for compounded creams and pills that were not medically necessary. The individuals who were provided the compounded creams and pills never saw the “prescribing” health care provider.
As a part of this scheme, Burton contacted Brad Hodgson, an employee with a doctor’s office in Atlanta, Georgia, and asked Hodgson to write compounded cream prescriptions for individuals who were not patients of the doctor’s practice where Hodgson worked. Upon Hodgson’s agreement to write the prescriptions, and as part of the scheme, Burton arranged for the Pounds and others to become “representatives” for Burton’s company, Simply Surgical. These representatives provided Burton with the personal identifying information and insurance cards of insurance company beneficiaries for whom the prescriptions could be issued. Burton agreed to pay the representatives for the information they provided him.
Following Burton’s receipt of the personal identifying information, Burton e-mailed the information to Hodgson and Smith, a billing coordinator at the Atlanta doctor’s office. Hodgson and Smith then caused prescriptions, purportedly signed by the Atlanta doctor and bearing the doctor’s DEA registration number, to be issued and faxed to a pharmacy in Pensacola. The doctor did not authorize or sign the prescriptions Hodgson and Smith submitted. Further, the health care beneficiaries whose information was submitted by Burton were not patients of the doctor’s office. The prescriptions issued were not medically necessary and were not provided by an authorized health care provider.
Following receipt of the prescriptions, employees of a Pensacola pharmacy manufactured compounded substances and then caused the substances to be shipped to the respective health care beneficiaries. The Pensacola pharmacy caused TRICARE and other health care benefit programs to be billed for the prescriptions.
By this conduct, Burton and others defrauded TRICARE and other health care benefit programs of more than $8 million. The trial is scheduled for August 6, 2018.
If convicted, all defendants face a maximum of 10 years in prison for each count of health care fraud conspiracy and a maximum of 20 years in prison for each count of wire fraud conspiracy. If convicted, Burton faces a maximum of 10 years in prison for each count of money laundering and money laundering conspiracy.
The case is being investigated by the Defense Criminal Investigative Service; the Florida Department of Law Enforcement; the Florida Department of Financial Services, Bureau of Insurance Fraud; and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Tiffany H. Eggers.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt in a court of law.
About the National Health Care Fraud Takedown:
Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III announced today the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses, and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.
Attorney General Sessions and Secretary Azar were joined in the announcement by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Deputy Director David L. Bowdich of the FBI, Assistant Administrator John Martin of the Drug Enforcement Administration (DEA), Deputy Inspector General Gary Cantrell of the HHS Office of Inspector General (OIG), Deputy Chief Eric Hylton of IRS Criminal Investigation (CI), Centers for Medicare and Medicaid Services (CMS) Deputy Administrator and Director of the Center for Program Integrity Alec Alexander, and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS).
Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and State Medicaid Fraud Control Units.
The charges announced today aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.
“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”
“Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money—it’s a dollar that can go toward providing healthcare for Americans in need,” said HHS Secretary Azar. “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Collectively, the doctors, nurses, licensed medical professionals, health care company owners, and others charged are accused of submitting a total of over $2 billion in fraudulent billings. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.
“Healthcare fraud touches every corner of the United States and not only costs taxpayers money, but also can have deadly consequences,” said FBI Deputy Director Bowdich. “Through investigations across the country, we have seen medical professionals putting greed above their patients’ well-being and trusted doctors fanning the flames of the opioid crisis. I want to thank the agents, analysts and our law enforcement partners in every field office who work each and every day to stop these criminals and hold them accountable for their actions.”
“DEA is committed to ending the opioid crisis occurring in our communities and preventing prescription drug misuse,” said DEA Assistant Administrator Martin. “DEA will continue to work with our partners every day to protect our citizens while ensuring that patients have adequate access to these critical medications.”
“This year’s operations, focusing on opioid-related schemes, spotlight the far-reaching impact of health care fraud,” said HHS Deputy Inspector General Cantrell. “Such crimes threaten the vitally important Medicare and Medicaid programs and the beneficiaries they serve. Though we have made significant progress in our fight against health care fraud; our efforts are not complete. We will continue to work with our partners to protect the health and safety of millions of Americans.”
“It takes a special kind of person to prey on the sick and vulnerable as happened in many of these health care fraud schemes,” said Deputy Chief Hylton. “Medical professionals and others callously placed individuals and vital healthcare services in harm’s way simply because of greed. IRS-CI special agents continue to work side-by-side with other federal, state, and local law enforcement officers to uncover these schemes and hold these criminals accountable for their actions.”
“CMS makes it a top priority to protect the health and safety of millions of beneficiaries who depend on vital federal healthcare programs,” said Alec Alexander, deputy administrator and director of the Center for Program Integrity. “CMS’ Center for Program Integrity collaborates closely with our law enforcement partners to safeguard precious taxpayer dollars. Under Administrator Seema Verma, we will continue to strengthen this partnership with law enforcement in order to ensure the integrity and sustainability of these essential programs that serve millions of Americans.”
“Heath care fraud wounds our service members and veterans alike, as they rely upon and rightfully expect uncompromised care through the Department of Defense’s TRICARE Program,” said DCIS Director O’Reilly. “Investigations that culminated in enforcement actions over the past several days underscore the steadfast commitment of the Defense Criminal Investigative Service and our investigative partners to vigorously investigate fraud impacting TRICARE. We remain vigilant in our efforts to ensure the high standards of care our service members, military retirees, and their dependents deserve while safeguarding American taxpayer dollars.”
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in 10 locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who collectively have falsely billed the Medicare program for over $14 billion.
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.
Fort Thompson Man Sentenced for AssaultRead the Press Release
United States Attorney Ron Parsons announced that a Fort Thompson, South Dakota, man convicted of Assaulting, Resisting, and Impeding a Federal Officer was sentenced on June 25, 2018, by U.S. District Judge Roberto A. Lange.
Casey World Turner, age 30, was sentenced to 6 months in federal prison, followed by 2 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
World Turner was indicted by a federal grand jury on February 14, 2018. He pled guilty on April 10, 2018.
The conviction stems from an incident on January 19, 2018, when an officer with the BIA Law Enforcement was dispatched to a residence in Fort Thompson. The officer observed World Turner walking up the porch of his mother’s residence, and he called out to World Turner to come speak with him.
After refusing the officer’s request, World Turner removed his jacket, assumed a bladed stance with both fists raised, and stared at the officer. The officer grabbed World Turner by the wrist and attempted to secure him in wrist restraints. World Turner began pulling away from the officer, while simultaneously pushing him with his other arm. The defendant continued to wrestle and resist until another officer arrived and helped subdue World Turner.
This case was investigated by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
World Turner was immediately turned over to the custody of the U.S. Marshals Service.
Former Rockcastle County Deputy Sheriff Indicted for Using Excessive Force Against Arrestee and for Obstructing JusticeRead the Press Release
LONDON, Ky. – A federal grand jury in London, Kentucky, today returned a two-count indictment charging Brandon McIntosh, a former deputy of the Rockcastle County Sheriff’s Office, with violating the civil rights of an arrestee by using excessive force against him and then filing a false report to obstruct the investigation of that assault.
The indictment alleges that on Nov. 6, 2016, McIntosh assaulted P.D., an arrestee, using a dangerous weapon and resulting in bodily injury to P.D. The indictment further alleges that McIntosh filed a report falsely stating that, as McIntosh approached P.D., P.D. became very combative and that McIntosh used the least amount of force to get P.D. under control.
If convicted, McIntosh faces a maximum term of imprisonment of 10 years on the civil rights charge and twenty years on the obstruction charge.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
The Federal Bureau of Investigation conducted the investigation. Assistant United States Attorney Hydee Hawkins of the Eastern District of Kentucky and Trial Attorney Mary J. Hahn of the Civil Rights Division are prosecuting the case.
Former Rockcastle County Deputy Sheriff Indicted for Using Excessive Force Against Arrestee and for Obstructing JusticeRead the Press Release
A federal grand jury in London, Kentucky, today returned a two-count indictment charging Brandon McIntosh, a former deputy of the Rockcastle County Sheriff’s Office, with violating the civil rights of an arrestee by using excessive force against him and then filing a false report to obstruct the investigation of that assault.
The indictment alleges that on Nov. 6, 2016, McIntosh assaulted P.D., an arrestee, using a dangerous weapon and resulting in bodily injury to P.D. The indictment further alleges that McIntosh filed a report falsely stating that, as McIntosh approached P.D., P.D. became very combative and that McIntosh used the least amount of force to get P.D. under control.
If convicted, McIntosh faces a maximum term of imprisonment of 10 years on the civil rights charge and twenty years on the obstruction charge.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
The Federal Bureau of Investigation conducted the investigation. Assistant United States Attorney Hydee Hawkins of the Eastern District of Kentucky and Trial Attorney Mary J. Hahn of the Civil Rights Division are prosecuting the case.
Former Philadelphia Police Sergeant Sentenced for Soliciting BribesRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that former Philadelphia Police Department Sergeant Brian Smith, 35, of Philadelphia, PA, was sentenced today to 15 months’ imprisonment, three years’ supervised release, a $10,000 fine, and a $200 special assessment. U.S. District Judge Gerald Pappert imposed the sentence. Smith previously pled guilty to two counts of soliciting a bribe.
According to court papers, Smith joined the Philadelphia Police Department (PPD) as an officer in June 2005, and was promoted to the rank of Sergeant in March 2016. Between December 2015 and November 2016, Smith solicited and accepted weekly bribe payments of $200 from a tow truck operator in exchange for lucrative accident location information. Smith would obtain this confidential law enforcement information from his PPD mobile data terminal and immediately send it by text messages to the tow truck operator in exchange for the corrupt payments. Smith also accepted monthly bribe payments of $800 per month from a second tow truck operator for such information.
Smith’s conduct unlawfully circumvented the PPD’s rotational towing policy. In 2008, the PPD instituted the policy, which requires patrol officers to notify Police Radio of any accident that requires vehicle towing. Police Radio maintains an accurate list of towing companies for an equitable rotation and distribution of towing assignments and calls a tow truck operator directly off the list. The City of Philadelphia instituted this rotational program as a public safety and consumer protection measure to stop wreck-chasing and to prevent accident victims from being taken advantage of by price-gauging tow truck operators. The program came in response to a series of highly publicized, violent encounters between tow truck operators who competed for the potentially lucrative work of towing cars damaged in accidents.
“Our efforts in this case illustrate that my Office is committed to stamping out corruption wherever it takes place,” said U.S. Attorney McSwain. “As a Sergeant in the Philadelphia Police Department, Smith repeatedly abused his position of trust. Today’s sentence makes plain that public officials who subvert the rule of law like this to line their own pockets will pay the price—and the only currency we accept will be their freedom.”
"It's grimly ironic, and beyond disappointing, that Brian Smith chose to game a system instituted in the interests of public safety and fair play," said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "What he saw as an easy way to pad his paycheck on the sly, federal law deems clear corruption. Public servants, particularly in law enforcement, must be held to the highest of ethical standards. Those falling short, like former Sergeant Smith, must be rooted out—and firmly held to account."
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department, Internal Affairs Division, and is being prosecuted by Assistant United States Attorney Michelle L. Morgan.
Former Office Manager Sentenced to 51 Months in Prison for Embezzling More Than $1.5 Million from EmployerRead the Press Release
WASHINGTON – The former office manager of a trade association management company was sentenced today to 51 months in prison on a federal charge of wire fraud for embezzling more than $1.5 million from the firm, announced U.S. Attorney Jessie K. Liu and Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office.
Leunea D. Myers, 39, of Clinton, Md., pled guilty in March 2018 in the U.S. District Court for the District of Columbia. She was sentenced by the Honorable Christopher R. Cooper. Following her prison term, she will be placed on three years of supervised release. She also must pay $1,550,075 in restitution to her former employer and two of its clients, and the Court issued a forfeiture money judgment in the same amount.
According to a statement of offense filed as part of the plea, Myers worked from February 2015 to November 2017 as the office manager and bookkeeper for a company identified in court documents as “Company A.” This company is a professional trade association management company in the District of Columbia that has been in business for more than 40 years. It has two primary clients. Myers’s responsibilities included tracking client billings and receipts, depositing money, and reconciling clients’ bank accounts, drafting checks, and preparing financial statements.
From April 2015 through November 2017, Myers embezzled funds by making unauthorized charges on company credit cards and by writing fraudulent checks directly to herself or to pay third parties to pay bills that she owed.
In announcing the sentence, U.S. Attorney Liu and Assistant Director in Charge McNamara commended the work of those who investigated the case from the FBI’s Washington Field Office. They also expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including Special Assistant U.S. Attorney Rebecca Caruso and former Special Assistant U.S. Attorneys Sean Welsh and Parker Tobin, who assisted with forfeiture issues; Paralegal Specialist Brittany Phillips; former Paralegal Specialist Kate Abrey, and former Assistant U.S. Attorney John P. Marston. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Derrick L. Williams, who handled the sentencing phase of the case.
Former Norwich Pharmacist Charged with Forging Prescriptions to Acquire Oxycodone and AlprazolamRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration for New England, today announced that on June 20, 2018, a grand jury in New Haven returned a 12-count indictment charging ERIC TINGLEY, 42, formerly of Lebanon, Connecticut and currently residing in Las Vegas, Nevada, with using forged prescriptions to acquire thousands of oxycodone and alprazolam tablets from the Connecticut pharmacy where he was employed.
TINGLEY was arrested yesterday in Rhode Island. Following his arrest, he appeared before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and is detained pending a detention hearing scheduled for tomorrow at 2:30 p.m.
As alleged in the indictment, TINGLEY was a licensed pharmacist employed at a pharmacy in Norwich. Between approximately October 2016 and July 2017, TINGLEY forged approximately 183 prescriptions for oxycodone and approximately 26 prescriptions for alprazolam, and filled the forged prescriptions at the pharmacy where he worked. Through these forged prescriptions, TINGLEY unlawfully obtained more than 35,000 oxycodone tablets and more than 2,000 alprazolam tablets. He then distributed the drugs for his own benefit.
The indictment charges TINGLEY with one count of possession with intent to distribute oxycodone and alprazolam, an offense that carries a maximum term of imprisonment of 20 years, and 11 counts of obtaining oxycodone and alprazolam by fraud and forgery, and offense that carries a maximum term of imprisonment of four years on each count.
U.S. Attorney Durham stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation is being conducted by the Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorneys Avi M. Perry and John T. Pierpont, Jr.
This indictment is announced as part of a national health care fraud takedown. Earlier today, Attorney General Jeff Sessions and other federal law enforcement officials announced the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, The U.S. Department of Health and Human Services announced that, since July 2017, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.
“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”
Former Local State Senator Pleads Guilty to Public Corruption Charge Involving Incident with A Staff MemberRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—U.S. Attorney James P. Kennedy, Jr. announced today that former New York State Senator Marc Panepinto, 53, of Buffalo, NY, pleaded guilty before U.S. Magistrate Judge Michael J. Roemer to promise of employment, compensation, or other benefit for political activity. The charge carries a maximum penalty of one year in prison and a $100,000 fine.
Assistant U.S. Attorney Paul E. Bonanno, who is handling the case, stated that the defendant served as the New York State Senator for the 60th Senate District between January 1, 2015, and December 31, 2016. In that position, Panepinto employed a young woman as a staff member in his district office.
On January 7, 2016, the defendant and the staff member traveled together to New York City to attend a fundraiser for Panepinto. Following the event, the staff member took possession of the donations from the fundraiser. Later that evening, the defendant suggested that he and the staff member go to her hotel room to count the donations together.
While in the staff member’s hotel room, Panepinto made a series of unwanted, verbal, and physical sexual advances which were rebuffed by the staff member. The defendant eventually complied with the staff member’s request that he leave, although he did return to the staffer member’s hotel room during the early morning hours in an unsuccessful attempt to get back into her hotel room. The following morning, Panepinto and the staff member returned to Buffalo together. However, the two did not discuss the events that took place the night before.
Upset by what occurred in her hotel room, the staff member subsequently resigned from her position in Panepinto’s district office. Following her resignation, the New York State Senate conducted an investigation into what had occurred, and, as a result of the investigation, referred the matter to the New York State Joint Commission on Public Ethics (JCOPE) for further investigation.
The defendant was concerned that the JCOPE investigation would jeopardize his 2016 campaign for re-election. As a result, Panepinto directed a senior staff member to meet with the staff member and offer her money and/or new employment if she refused to participate in the JCOPE investigation. It was suggested that the new employment would be political in nature and funded in whole or in part by an Act of Congress. The meeting took place on March 7, 2016, at which time the staff member did not accept or refuse the offer. On March 9, 2016, the senior staff member contacted the staff member to arrange a follow-up meeting but the staff member did not agree to a follow-up meeting. Subsequently, on March 15, 2016, Panepinto announced that he would not be seeking re-election to the New York State Senate.
“While the defendant’s behavior in the hotel room was bad, his efforts to cover-up that behavior constituted a federal crime,” stated U.S. Attorney Kennedy. “In behaving as he did, the defendant not only abused the trust of a young female staffer over whom he held a position of authority, but he also betrayed the trust of those he was elected to serve. Today’s plea makes clear that this Office will not allow elected officials who abuse their position for personal gain to escape justice.”
“Today, Marc Panepinto admitted he directed a senior staff member to promise a financial payment or new employment to another Panepinto staffer if she would refuse to participate in a New York State Joint Commission on Public Ethics investigation,” said Gary Loeffert, Special Agent-in-Charge of the FBI's Buffalo office. “Panepinto's admitted criminal misconduct -- behavior that he engaged in while he served in public office -- epitomizes why public corruption at all levels is the FBI’s top criminal investigative priority.”
The plea is the result of an investigation by the Buffalo Division of the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the New York State Joint Commission on Public Ethics, under the direction of Executive Director Seth H. Agata.
Sentencing will be scheduled at a later date.
Former ICE Chief Counsel Sentenced to Four Years in Prison for Wire Fraud and Aggravated Identity Theft SchemeRead the Press Release
Former Chief Counsel Raphael A. Sanchez of the U.S. Immigration and Customs Enforcement’s (ICE) Office of Principal Legal Advisor (OPLA) was sentenced to 48 months in prison for a wire fraud and aggravated identity theft scheme involving the identities of numerous aliens, announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and ICE Principal Legal Advisor Tracy Short.
Sanchez, 44, of Seattle, Washington, pleaded guilty on Feb. 24, to one count of wire fraud and one count of aggravated identity theft. In addition to the prison term, U.S. District Court Judge Robert S. Lasnik of the Western District of Washington ordered Sanchez to pay $190,345.63 in restitution.
“Raphael Sanchez was entrusted with overseeing the honest enforcement of our country’s immigration laws,” said Acting Assistant Attorney General Cronan. “Instead, Sanchez abused that trust, and capitalized on his position at ICE to exploit his victims and line his own pockets.”
“ICE employees are required to ensure honest enforcement of more than 400 laws,” said ICE Principal Legal Advisor Short. “We cannot let one bad actor detract from the work the agency’s dedicated employees in Seattle and across the world are doing to ensure our national security and uphold public safety. Our employees are held to the highest standards of professional conduct. Individuals who violate the public’s trust will face consequences for their actions, as Mr. Sanchez did in this case. Corruption will not be tolerated.”
Sanchez, who was responsible for immigration removal proceedings in Alaska, Oregon and Washington, admitted in his plea agreement that he intentionally devised a scheme to defraud aliens in various stages of immigration removal proceedings with ICE. Sanchez used the personally identifiable information of those aliens to open lines of credit and personal loans in their names, manipulate their credit bureau files, transfer funds to himself and to purchase goods for himself using credit cards issued in their names.
Sanchez admitted that he obtained personally identifiable information of the victim aliens by using ICE’s official computer database systems and by accessing their official, hard-copy immigration A-files. He then used his work computer to forge identification documents, including Social Security cards and Washington State driver’s licenses, in the victims’ names. Sanchez used these forged documents to open credit card and bank accounts subject to his own control in the names of the aliens.
To further the scheme, Sanchez listed his residence as the aliens’ home addresses on account paperwork. In some cases, he created public utility account statements in their names to provide the necessary proof of residence to open lines of credit in their names or to conceal the scheme. He also opened e-mail and online financial accounts in the names of several aliens, and manufactured a false earnings-and-leave statement in the name of an alien and registered a car in her name.
Once the accounts were approved and opened, Sanchez made charges or drew payments totaling more than $190,000 in the names of aliens to himself or entities that he controlled, often using PayPal and mobile point-of-sale devices from Amazon, Square, Venmo and Coin to process the fraudulent transactions. In a number of cases, Sanchez purchased goods online in the names of aliens and had them shipped to his residence. Sanchez also employed credit-monitoring services and corresponded with credit bureaus in the names of aliens to conceal his fraud scheme. Sanchez also claimed three aliens as relative dependents on his tax returns for 2014, 2015, and 2016.
ICE’s Office of Professional Responsibility, the FBI, and the U.S. Postal Inspection Service investigated the case. Trial Attorneys Luke Cass and Jessica C. Harvey of the Criminal Division’s Public Integrity Section prosecuted the case.
Former DuPont Employee Charged with Theft of Trade Secrets and Lying to the FBIRead the Press Release
Josh Harry Isler, age 55, from St. Ansgar, Iowa, has been charged with one count of trade secret theft and one count of making a false statement to the Federal Bureau of Investigation. The charges are contained in an Information filed today in the United States District Court in Cedar Rapids.
The Information alleges that, during at least August 2013, while employed by DuPont and after having accepted an offer of employment with a competitor, Isler stole trade secrets of DuPont. After Isler accepted employment with a competitor of DuPont in the ethanol fuel enzyme business, he allegedly transferred hundreds of DuPont’s electronic files to an external storage device. It is also alleged Isler knew the files he downloaded contained proprietary information and trade secrets of DuPont and many related to customers of DuPont who were also customers of the competitor or whose business was being sought by the competitor. It is alleged Isler retained the files in his new job and transferred some to his new employer.
The Information also alleges that when he was interviewed by the FBI in November 2013, Isler falsely denied he had downloaded the files containing proprietary information of DuPont.
If convicted on both charges, Isler faces a maximum combined sentence of 15 years’ imprisonment, a fine of up to $500,000, and eight years of supervised release after any imprisonment. Isler could also be ordered to pay restitution to DuPont.
Isler’s initial appearance in federal court in Cedar Rapids has been scheduled for 11:30 a.m. on July 5, 2018.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Richard L. Murphy and was investigated by the Federal Bureau of Investigation. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 18-CR-2032.
Follow us on Twitter @USAO_NDIA.
Former Chief Financial Officer of Bankrate Inc. Pleads Guilty to Orchestrating Complex $25 Million Accounting and Securities Fraud SchemeRead the Press Release
The former chief financial officer of Bankrate Inc., a publicly traded financial services and marketing company formerly headquartered in North Palm Beach, Florida, pleaded guilty today for his role in orchestrating an accounting and securities fraud scheme that caused more than $25 million in shareholder losses.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Benjamin Greenberg of the Southern District of Florida and Criminal Investigations Group Inspector in Charge Daniel Adame of the U.S. Postal Inspection Service made the announcement.
Edward J. DiMaria, 53, of Fairfield County, Connecticut, pleaded guilty to one count of conspiracy to make false statements to a public company’s accountants, falsify a public company’s books, records and accounts, and commit securities fraud; and one count of making materially false statements to the Securities and Exchange Commission (SEC). DiMaria pleaded guilty before U.S. Magistrate Judge Simonton of the Southern District of Florida. DiMaria is scheduled to be sentenced on Sept. 11.
“Edward DiMaria used his position as Bankrate’s CFO to inflate the company’s earnings and mislead shareholders, auditors, and the SEC, resulting in over $25 million in losses to innocent investors,” said Acting Assistant Attorney General Cronan. “DiMaria’s conviction and the restitution in this case will hopefully provide some solace to Bankrate’s shareholders, while also reminding potential bad actors of the Department’s commitment to hold individuals accountable for their involvement in complex accounting and securities fraud schemes that harm investors and undermine our markets.”
“The consequences of this type of financial fraud scheme are far reaching, affecting not only the economy in the United States, but also the world’s financial markets,” said Inspector in Charge Adame. “Those who engage in this type of abuse of power while in positions of authority should know they cannot escape detection. They will be found and they will be held accountable for their actions. The U.S. Postal Inspection Service has a long history of investigating complex financial fraud schemes, like this one, in order to protect investors and the integrity of the financial marketplace.”
As part of his guilty plea, DiMaria admitted that between 2010 and 2014, he directed and conspired to commit a complex scheme to artificially inflate Bankrate’s earnings through so-called “cookie jar” or “cushion” accounting, where millions of dollars in unsupported expense accruals were purposefully left on Bankrate’s books and then selectively reversed in later quarters to boost earnings. In addition, DiMaria admitted that he conspired with other Bankrate employees to misrepresent certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics. DiMaria also admitted that he made materially false statements to Bankrate’s independent auditors to conceal the improper accounting entries, and that he caused Bankrate’s financial statements filed with the SEC to be materially misstated.
DiMaria further admitted that the scheme caused more than $25 million in losses to Bankrate’s shareholders. Pursuant to the terms of the plea agreement, DiMaria is required to pay approximately $21 million in restitution to Bankrate’s shareholders.
Hyunjin Lerner, Bankrate’s former vice president of finance, previously pleaded guilty for his role in the conspiracy. Lerner was sentenced earlier this year to 60 months in prison by U.S. District Court Judge K. Michael Moore of the Southern District of Florida.
The U.S. Postal Inspection Service’s National Headquarters Fraud Team investigated the case. Assistant Chief Henry Van Dyck and Trial Attorneys Emily Scruggs and Jason Covert of the Criminal Division’s Fraud Section are prosecuting the case with assistance from the U.S Attorney’s Office for the Southern District of Florida. The SEC also provided assistance in this matter.
Florida Man Sentenced to 32 Months for Credit Card Fraud and Aggravated Identity TheftRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Jose Castillo Febles, 31, of Doral, Florida, was sentenced today in U.S. District Court by Chief Judge Nancy Torresen to 32 months in prison and three years of supervised release for conspiracy to commit access device fraud and aggravated identity theft. He was also ordered to pay over $25,000 in restitution. He pleaded guilty on August 25, 2017.
Court records show that between about November 2015 and June 2016, the defendant and others used stolen credit and debit card numbers to purchase merchandise. In May 2016, as part of the conspiracy, the defendant and others traveled to Maine. On May 29, 2016, the defendant purchased over $500 worth of merchandise at a Portland Walgreens using a stolen card number belonging to a victim from Auburn.
On June 15, 2016, after two co-conspirators, Yaisder Herrera Gargallo and Meylisi Rueda, purchased merchandise at a Portland Walgreens using a stolen card number, store personnel notified the police and provided a license plate number. On June 18, 2016, a Cumberland County Sheriff’s Office deputy stopped a vehicle matching the description provided by Walgreens personnel. The defendant and two of his co-conspirators were in the vehicle. The stop led to their arrest and the discovery of merchandise, numerous fraudulent credit cards and a laptop computer. The laptop computer was later found to contain credit card numbers and related data.
Yaisder Herrera Gargallo was sentenced to 40 months in prison and three years of supervised release on November 14, 2017. Another co-defendant, Juan Carlos Febles, was sentenced to 34 months in prison and three years of supervised release on January 3, 2018. Meylisi Rueda has pleaded guilty and awaits sentencing.
The case was investigated by the Cumberland County Sheriff’s Office, the Portland Police Department and the U.S. Secret Service.
Five Tennessee Health Care Executives Charged in $2.5 Million Dollar Kickback SchemeRead the Press Release
An 11-count indictment was unsealed yesterday, charging five Tennessee health care executives with one count of conspiracy to defraud the United States and violate the Anti-Kickback Statute and several substantive counts of violating the Anti-Kickback Statute, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
Those charged are:
Brenda Montgomery, 70, of Camden, Tenn.;
Beau Jones, 50, of Loudon, Tenn.;
Sarah Dacus, 36; Greg Lawson, 42; and Josh Wiley, 35, all of Knoxville, Tenn.
The charges stem from a multi-level kickback scheme led and financed by Brenda Montgomery and the durable medical equipment (DME) company she owned and operated, CCC Medical, Inc. (CCC). Jones, Lawson, Wiley, and Dacus were arrested yesterday as part of a national healthcare fraud takedown. Montgomery, who is currently facing other federal charges connected to a previous $4.6 million dollar Medicare kickback scheme, must appear in the Middle District of Tennessee to be arraigned on the new case.
According to the indictment, Beau Jones, in his role as a sales representative for a large national DME manufacturer, recruited individuals in a position to make referrals of Medicare DME orders to CCC. The indictment alleges that in exchange for the referrals, he received kickbacks in excess of $400,000.
The indictment further alleges that Greg Lawson and Josh Wiley, sales representatives of the same company that employed Jones, were among the individuals recruited by Jones. The indictment alleges that Lawson received over $250,000 in kickbacks and Wiley received over $93,000 in kickbacks for DME referrals and orders to CCC.
According to other allegations in the indictment, Lawson recruited Sarah Dacus, a sales representative of a large international medical device manufacturer, and Dacus received kickbacks and bribes in excess of $52,000 for sending DME orders and referrals to CCC.
Finally, the indictment alleges that, from in or around January 2012 until in or around December 2017, Montgomery paid Jones, Lawson, Wiley, Dacus and other co-conspirators over $1 million in illegal kickbacks; billed Medicare for over $2.5 million in tainted DME claims; and collected in excess of $1.2 million in reimbursement for those claims.
The defendants face up to five years in federal prison on each charge as well as substantial monetary fines and penalties.
This case was investigated by the U.S. Department of Health & Human Services - Office of Inspector General; the Defense Criminal Investigative Service; and the Tennessee Bureau of Investigation - Medicaid Fraud Control Unit. Assistant United States Attorney Ryan R. Raybould of the Middle District of Tennessee and Trial Attorney Anthony Burba from the DOJ’s Fraud Section are prosecuting the case on behalf of the United States.
An indictment is merely an accusation and is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty in a court of law.
This enforcement action is part of a nationwide health care fraud initiative of the Department of Justice being announced today by Attorney General Jeff Sessions.
Five Nashville-Area Men Indicted in Conspiracy to Fraudulently Obtain OxycodoneRead the Press Release
A federal grand jury in Nashville, Tennessee, returned a 12-count indictment on June 13, 2018, charging five individuals with various offenses, including wire fraud and aggravated identity theft, relating to a conspiracy to fraudulently obtain and distribute oxycodone, in the middle Tennessee area, announced U.S. Attorney Don Cochran, for the Middle District of Tennessee.
The indictment charges the following individuals with conspiring to fraudulently use a DEA registration number issued to another person to obtain oxycodone between January 2017 and September 2017:
Simbarashe Kanjanda, aka Simba, 37, of Hermitage, Tennessee;
William Afari, 24, of Antioch, Tennessee;
Robert Pride, Jr., 31, of Nashville, Tennessee;
AbdulNasar Nour, 24, of Antioch, Tennessee; and
Kudakawashe Mandishona, aka Kuda, 23, of Antioch, Tennessee.
According to the indictment, the five individuals were part of a conspiracy to steal the DEA registration numbers of area physicians, as well as the personal identifying information of patients, from medical and dental clinics in the middle Tennessee area. The indictment alleges the DEA registration numbers were then used to create fraudulent prescriptions for oxycodone in the names of patients whose identities had been stolen. The fraudulent prescriptions were then presented to area pharmacies by co-conspirators, who obtained the oxycodone and then conspired to possess and distribute the oxycodone in middle Tennessee.
The indictment also alleges that the defendants sent text messages to other co-conspirators to facilitate and request fraudulent prescriptions.
If convicted of the drug conspiracy, the defendants face a maximum sentence of 20 years in prison. The defendants face up an additional mandatory consecutive sentence of at least 2 years in prison for the aggravated identity theft offenses.
This case was investigated by the Drug Enforcement Administration; the Tennessee Office of Inspector General; and the Smyrna Police Department. The case is being prosecuted by Assistant U.S. Attorney Ahmed A. Safeeullah.
An indictment is merely an accusation and is not evidence of guilt. All defendants are presumed innocent until proven guilty in a court of law.
This enforcement action is part of a nationwide health care fraud initiative of the Department of Justice being announced today by Attorney General Jeff Sessions.
Five NW Alabama Compounding Pharmacy Employees Charged in Multi-Million Dollar Prescription Fraud Conspiracy during National Health Care Fraud TakedownRead the Press Release
BIRMINGHAM – The U.S. Attorney’s Office for the Northern District of Alabama this week charged five employees, including a district and an operations manager, of an Alabama-based compounding pharmacy with participating in a conspiracy to generate prescriptions and defraud health care insurers and prescription drug administrators out of tens of millions of dollars.
U.S. Attorney Jay E. Town announced the charges against employees of Northside Pharmacy, based in Haleyville and doing business as Global Compounding Pharmacy, as part of a nationwide health care fraud takedown. Global’s compounding and shipping facility was in Haleyville, but the pharmacy did its prescription processing, billing and customer service at its “call center” in Clearwater, Florida.
Attorney General Jeff Sessions and Department of Health and Human Services Secretary Alex M. Azar III today announced the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units participated in today’s arrests. In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.
Attorney General Sessions and Secretary Azar were joined in the announcement by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, FBi Deputy Director David L. Bowdich, Drug Enforcement Administration Assistant Administrator John Martin, HHS-Office of Inspector General Deputy Inspector General Gary Cantrell, IRS Criminal Investigation Deputy Chief Eric Hylton, Centers for Medicare and Medicaid Services Deputy Administrator and Director of the Center for Program Integrity Alec Alexander, and Defense Criminal Investigative Service Director Dermot F. O’Reilly.
Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and State Medicaid Fraud Control Units.
The charges announced today aggressively target schemes billing Medicare, Medicaid, TRICARE, a health insurance program for members and veterans of the armed forces and their families, and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.
“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation — and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”
U.S. Attorney Town said, “The defendants in the north Alabama case helped their employer, Global Compounding Pharmacy, defraud millions from Medicare, Blue Cross Blue Shield of Alabama and other insurance systems by pushing unnecessary medications and billing for reimbursement. The greed of these defendants, and this company, resulted in the distribution of medication when there was no need, with the primary focus on profit rather than the efficacy of care. The costs are not just monetary, but have social and health impacts on us all.”
“Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money – it’s a dollar that can go toward providing healthcare for Americans in need,” said HHS Secretary Azar. “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”
According to court documents, defendants from the national sweep allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and often never provided. In many cases, the charges are that patient recruiters, beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of more than $2 billion in fraudulent billings. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.
In the Global Compounding Pharmacy case in north Alabama, the defendants are charged with taking part in a multi-faceted, multi-million dollar scheme to defraud multiple insurance plans and their third-party pharmacy benefit managers by billing for fraudulent, often high-dollar prescriptions that Global would fill and bill for reimbursement. To maximize proceeds, Global engaged in additional fraudulent practices including automatically refilling and billing for prescriptions, regardless of patient need, and routinely waiving co-pays to incentivize patients to accept unnecessary medications and refills, according to charges and plea agreements in the case.
The U.S. Attorney’s Office, through separate informations filed in U.S. District Court, and all with associated plea agreements, charged Global Operations Manager JEFFREY SOUTH, District Manager ANGIE NELSON, sales representatives RODDRICK BOYKIN and DAWN WHITTEN, and biller STACEY CARDOZO. The informations charge each of the defendants with one count of conspiracy to commit wire fraud, mail fraud and health care fraud. South, Nelson, Boykin and Whitten also are charged with varying counts of health care fraud, and Whitten also faces a charge of aggravated identity theft.
The charges against South, 47, of Florence, Alabama, Nelson, 40, of Santa Rosa Beach, Florida, Boykin, 45, of San Antonio, Texas, Whitten, 55, of Columbus, Georgia, and Cardozo, 28, of Largo, Florida, add to eight Global sales representatives previously charged by the U.S. Attorney’s Office and who all have pled guilty to the conspiracy and scheme.
“These defendants, motivated by pure greed, helped conduct a complicated scheme to obtain unnecessary, high-priced medications, purely to gain the insurance reimbursement,” said Birmingham FBI Field Office Special Agent in Charge Johnnie Sharp Jr. “Rooting out health care fraud is central to the well-being of both our citizens and the overall economy. Health care fraud costs the country tens of billions of dollars a year, and the FBI seeks to identify and pursue investigations against the most egregious offenders involved in health care fraud through investigative partnerships with other federal agencies.”
According to court documents, Global hired sales representatives who were located in various states and were responsible for generating prescriptions from physicians and other prescribers. To generate a high volume of prescriptions, Global hired representatives who were married or related to doctors and other prescribers, and encouraged sales representatives to volunteer at doctors’ offices where they would review patient files and push Global’s products to patients, according to court documents.
The FBI, U.S. Postal Inspection Service, HHS-OIG, DCIS and IRS-CI, investigated the Global cases, which Assistant U.S. Attorneys Chinelo Dike-Minor, Don Long and Nicole Grosnoff are prosecuting.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in 10 locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who, collectively, have falsely billed the Medicare program for more than $14 billion.
A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Five Doctors and Eight Healthcare Professionals Charged as Part of National Healthcare Fraud TakedownRead the Press Release
Thirteen individuals, including five doctors, a chiropractor, three licensed physical and occupational therapists and two pharmacy owners have been charged for their participation in fraudulent schemes in connection with which Medicare and Medicaid programs were billed more than $163 million. The charges filed in federal court in Brooklyn and Central Islip, New York, are part of a nationwide health care fraud takedown, led by the Medicare Fraud Strike Force, which resulted in criminal charges against 601 individuals for their alleged participation in health care fraud schemes involving approximately $2 billion in fraudulent claims.
The charges were announced by Richard P. Donoghue, United States Attorney for the Eastern District of New York; John P. Cronan, Acting Assistant Attorney General of the Justice Department’s Criminal Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services - Office of Inspector General, Office of Investigations, New York Regional Office (HHS-OIG); James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI); and Dennis Rosen, Inspector General, New York State Office of the Medicaid Inspector General (OMIG). The results of the nationwide takedown were announced today by Attorney General Jeff Sessions; Alex M. Azar II, Secretary, HHS; Christopher Wray, Director, FBI; Robert W. Patterson, Acting Administrator, Drug Enforcement Administration (DEA); Daniel Levinson, Inspector General, HHS-OIG; Don Fort, Chief, IRS-CI; Seema Verna, Administrator, Centers for Medicare and Medicaid Services.
“As alleged, the defendants charged throughout the Eastern District of New York as a part of the nationwide health care takedown abused their positions to enrich themselves, while bilking Medicare and Medicaid. They did so without regard to the elderly and vulnerable citizens whose health depends upon these essential programs. Licensed medical professionals and others who cheat the system will be investigated and prosecuted to the full extent of the law,” stated United States Attorney Donoghue. Mr. Donoghue extended his grateful appreciation to the U.S. Office of Personnel Management, Office of Inspector General (OPM-OIG), U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), the New York City Police Department (NYPD), the New York Attorney General’s Medicaid Fraud Control Unit (MFCU), the New York City Human Resources Administration and the New York City Health and Hospitals Corporation, Office of Inspector General, for their assistance in the investigations in this district.
“Turning a blind eye to the needs of Medicare and Medicaid recipients,
these medical officials set their sights on personal gain,” stated FBI Assistant Director-in-Charge Sweeney. “Our doctors and healthcare professionals are entrusted to serve those in need, but these individuals used their occupations as leverage to fulfill their fraudulent scheme. By allegedly billing Medicare and Medicaid more than $163 million, the defendants selfishly diverted funds allocated to our most vulnerable citizens. Devoted to protecting the welfare of our citizens, we will continue to uproot those who blatantly take advantage these programs.”
“Health care fraud depletes funds intended to provide care for our most vulnerable citizens,” stated HHS-OIG Special Agent-in-Charge Lampert. “This takedown sends a clear message that criminals who engage in health care fraud schemes will be caught and face consequences for their actions.”
“Medical doctors and medical professionals should be some of the most trusted people in our lives,” stated IRS-CI Special Agent-in-Charge James Robnett. “The financial expertise of IRS-Special Agents is needed to not only decipher the tax violations, but is necessary to unravel the sophisticated widespread financial fraud perpetrated against the safety net millions of Americans rely upon on a daily basis.”
“Medicaid fraud is not a victimless crime. Those engaged in schemes like this prey on the most vulnerable New Yorkers, rob the health care system of vital resources, and waste taxpayer dollars,” stated OMIG Inspector General Rosen. “My office will continue to work closely with our federal partners to hold wrongdoers fully accountable.”
The schemes charged in the Eastern District of New York, detailed in eight indictments and one criminal information, are as follows:
United States v. Wael Bakry, et al.: The superseding indictment charges five health care professionals for their role in a wide-ranging health care fraud scheme in Brooklyn and Queens that billed the Medicare program for more than $116 million. Wael Bakry, a physical therapist, Abraham Demoz, a physician, Victor Genkin, an occupational therapist, Mayura Kanekar, an occupational therapist, and Alexander Khavash, a chiropractor, were each charged with conspiracy to commit health care fraud, conspiracy to commit money laundering, conspiracy to pay health care kickbacks, conspiracy to defraud the United States by obstructing the lawful functions of the Internal Revenue Service, and subscribing to a false and fraudulent tax return. Additionally, Bakry, Kanekar and Khavash were each separately charged with two false claims counts. The charges stem from the defendants’ involvement in a scheme, run through multiple medical practices, in which the defendants paid illegal kickbacks for the referral of patients to their clinics. These patients, in turn, subjected themselves to purported physical and occupational therapy and other services in return for kickbacks. The superseding indictment was filed on June 20, 2018. The case, which is pending before United States District Judge Sterling Johnson, Jr., is being prosecuted by Assistant Chief A. Brendan Stewart and Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section.
United States v. Artem Ashirov: The indictment charges Artem Ashirov, a pharmacist and sole proprietor of ABO Pharmacy in Brooklyn, with five counts of violating the Anti-Kickback Statute. The charges stem from a scheme in which Ashirov paid and offered to pay kickbacks for prescriptions filled at his pharmacy. Between 2015 and 2018, Ashirov, through ABO Pharmacy, billed more than $14.9 million to Medicare and Medicaid. Ashirov was arrested, and arraigned earlier today before United States Magistrate Judge Ramon E. Reyes, Jr., at the federal courthouse in Brooklyn. The case is being prosecuted by Assistant United States Attorney Erin E. Argo of the U.S. Attorney’s Office for the Eastern District of New York.
United States v. Gary Peresiper: The indictment charges Gary Peresiper, a medical clinic business manager, with conspiracy to pay health care kickbacks. The charge stems from Peresiper’s role at two Brooklyn clinics, Pulmonary Solutions, P.C., and Multi Care Medical NY PLLC. Peresiper and co-conspirators submitted claims through these clinics for purported diagnostic testing and other services for beneficiaries who had been directed to the clinics in return for kickbacks. From November 2010 to June 2013, the clinics billed Medicare approximately $10.2 million in claims, and were paid approximately $4.7 million on those claims. Peresiper was arrested, and arraigned before United States Magistrate Judge Peggy Kuo at the federal courthouse in Brooklyn on June 4, 2018. The case is being prosecuted by Trial Attorney Sarah Wilson Rocha of the Criminal Division’s Fraud Section.
United States v. Iouri Winogradov: Iouri Winogradov, the operator of Brooklyn ambulette company Ambulette Star Trans, was charged with one count of conspiracy to violate the Anti-Kickback Statute and one count of conspiracy to commit money laundering. The charges stem from Winogradov’s role in a kickback and money laundering scheme in which Winogradov and co-conspirators received and paid illegal kickbacks for the referral of patients to medical clinics. The patients, who were transported to and from the clinics by Ambulette Star Trans, subjected themselves to purported physical and occupational therapy and other services. Between 2010 and 2014, Ambulette Star Trans was paid approximately $7 million as a result of claims submitted to Medicaid. The indictment was unsealed on June 27, 2018, and the defendant remains at large. The case is being prosecuted by Andrew Estes of the Criminal Division’s Fraud Section.
United States v. Yuriy Barayev: Yuriy Barayev, a pharmacy owner, was indicted on one count of health care fraud. The charge stems from Barayev’s ownership of a Queens pharmacy, Woodhaven Rx Inc., through which he submitted claims for medications that were purportedly dispensed by his pharmacy, but in fact were never dispensed to beneficiaries. From November 2013 to December 2015, Medicare reimbursed the pharmacy approximately $6.6 million for pharmaceutical claims. Barayev was arrested, and arraigned before United States Magistrate Judge Steven L. Tiscione at the federal courthouse in Brooklyn on June 26, 2018. The case is being prosecuted by Trial Attorney Sarah Wilson Rocha of the Criminal Division’s Fraud Section.
United States v. Yong Jun Kim: The indictment charges Yong Jun Kim, a medical doctor who operated My Health Wellness Center in Flushing, New York, with one count of conspiracy to commit health care fraud and one count of violating the Anti-Kickback Statute. The charges stem from Dr. Kim’s role in a scheme in which claims were submitted to Medicare for physical therapy services that were not medically necessary, not provided, or otherwise did not qualify for reimbursement. Between 2012 and 2015, Dr. Kim billed Medicare approximately $5.6 million and was paid approximately $3.5 million on those claims. Dr. Kim was arrested, and arraigned before United States Magistrate Judge Steven L. Tiscione at the federal courthouse in Brooklyn on June 27, 2018. The case is being prosecuted by Senior Litigation Counsel Patricia Notopoulos of the U.S. Attorney’s Office for the Eastern District of New York.
United States v. Yekaterina Kleydman: The indictment charges Yekaterina Kleydman, a medical doctor, with one count of health care fraud and three counts of making false claims. The charges stem from a scheme in which Dr. Kleydman fraudulently billed Medicare and Medicaid for cosmetic dermatological procedures that did not qualify for reimbursement. Between January 2015 and March 2018, Dr. Kleydman billed Medicare and Medicaid approximately $2.5 million and was paid approximately $700,000 on those claims. Dr. Kleydman was arrested, and arraigned before United States Magistrate Judge Steven L. Tiscione at the federal courthouse in Brooklyn on June 25, 2018. The case is being handled by Trial Attorney Debra Jaroslawicz of the Criminal Division’s Fraud Section.
United States v. Harold Bendelstein: The indictment charges Harold Bendelstein, a medical doctor, with one count of health care fraud and two counts of making false claims. The charges stem from a scheme in which Dr. Bendelstein billed Medicare and Medicaid for incision procedures to patients’ ears, when, in fact, Dr. Bendelstein either did not perform the procedure specified or performed no procedure at all. Between January 2014 and February 2018, Dr. Bendelstein billed Medicare and Medicaid approximately $585,000 and was paid approximately $200,000 on those claims. Dr. Bendelstein was arrested, and arraigned before United States Magistrate Judge Steven L. Tiscione at the federal courthouse in Brooklyn on June 27, 2018. The case is being prosecuted by Trial Attorney Debra Jaroslawicz of the Criminal Division’s Fraud Section.
United States v. Hal Abrahamson: The information charges Hal Abrahamson, a licensed podiatrist, with one count of health care fraud. The charges stem from a scheme in which Dr. Abrahamson submitted claims to Medicare and private insurance companies for procedures he did not perform, including skin grafts and wound packing, among other false billings. Between 2013 and 2017, Dr. Abrahamson caused a loss of approximately $869,000 to the Medicare program and other insurers. Dr. Abrahamson was arraigned and pleaded guilty before United States District Judge Denis R. Hurley at the federal courthouse in Central Islip on June 26, 2018. The case is being prosecuted by Assistant United States Attorney Charles Kelly of the U.S. Attorney’s Office for the Eastern District of New York.
The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Defendants:
WAEL BAKRY
Age: 46
Staten Island, New YorkE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Dr. Abraham Demoz
Age: 58
Oceanside, New YorkE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Victor Genkin
Age: 49
Brooklyn, New YorkE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Mayura Kanekar
Age: 43
Bayside, New YorkE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Alexander Khavash
Age: 41
Parkland, FloridaE.D.N.Y. Docket No. 17-CR-0353 (SJ)
Artem Ashirov
Age: 42
Rego Park, New YorkE.D.N.Y. Docket No. 18-CR-0321 (WFK)
Gary Peresiper
Age: 52
East Rockaway, New YorkE.D.N.Y. Docket No. 18-CR-0280 (SJ)
Iouri Winogradov
Age: 51
Brooklyn, New YorkE.D.N.Y. Docket No. 18-CR-0317 (JBW)
Yuriy Barayev
Age: 43
Briarwood, New YorkE.D.N.Y. Docket No. 18-CR-0318 (FB)
Dr. Yong Jun Kim
Age: 48
Roslyn, New YorkE.D.N.Y. Docket No. 18-CR-0320 (ARR)
Dr. Yekaterina Kleydman
Age: 35
Staten Island, New YorkE.D.N.Y. Docket No. 18-CR-0310 (NGG)
Dr. Harold Bendelstein
Age: 57
Far Rockaway, New YorkE.D.N.Y. Docket No. 18-CR-0309 (SJ)
Dr. Hal Abrahamson
Age: 55
Melville, New YorkE.D.N.Y. Docket No. 18-CR-0314 (DRH)
Federal Prosecutors Targeting Violent Crime in Wichita, Garden CityRead the Press Release
WICHITA, KAN. – Federal prosecutors are teaming up with local and state law enforcement agencies to target violent crime in Wichita and Garden City, U.S. Attorney Stephen McAllister said today.
The Project Safe Neighborhoods (PSN) initiative will prioritize federal prosecutions of repeat offenders and convicted criminals who carry firearms in the two cities, where violent crime rates are higher than average for Kansas.
“Violent crime rates are on the rise in both cities,” U.S. Attorney Stephen McAllister said. “By working together, we can size up the problems and concentrate our resources where we get the best results. Our goal is to make both communities safer.”
Drug trafficking, gang activity and other factors drive violent crime rates and make each city’s problems unique, McAllister said. The PSN program is aimed at directing federal resources – including federal prosecutors as well as investigators from the Bureau of Alcohol, Tobacco, Firearms and Explosives and other agencies – to support the work of local police departments, sheriffs and district attorneys.
Both Garden City and Wichita have reported increased gang activity that fuels violent crime. Law enforcement officials in both cities, McAllister said, have been very receptive to working with the U.S. Attorney’s office on the PSN program.
According to the KBI’s most recent report, the violent crime rate for Kansas is 3.7 per 1,000 people. That compares to a rate of 5.1 in Garden City and a rate of 10.6 in Wichita, according to the KBI report, which was based on 2016 figures.
In Wichita, a PSN Task Force will be formed, including two agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives, Assistant U.S. Attorney Matt Treaster and Assistant District Attorney Mandee Schauf from the Sedgwick County District Attorney’s Office, as well as officers from the Wichita Police Department and the Sedgwick County Sheriff’s Department.
McAllister said a federal prosecutor and an assistant district attorney will meet regularly to review cases and discuss prosecution strategies.
In Garden City, PSN prosecutors are targeting gang members, repeat offenders and known drug traffickers.
McAllister said he recently received authorization from the Justice Department to hire two new federal prosecutors in Kansas to concentrate on violent crime cases. Those prosecutors will work with the PSN 2.0 program, as well as tackle violent crime in Topeka, which also has suffered a surge in violent crimes recently.
The new PSN initiative is based on a 2001 program of the same name that proved successful in reducing violent crime, McAllister said. One of the keys to the program is targeted enforcement. U.S. Attorneys in collaboration with their partners are working to identify the most violent locations in their districts and to concentrate enforcement there.
The PSN program also calls for prosecutors to work with local communities to prevent crime by supporting programs to engage teenagers in constructive ways that promote respect for law enforcement and steer them away from crime, as well as programs that reduce recidivism.
Etna Man Sentenced to One Year and a Day for Marijuana ConspiracyRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that James Mansfield, 33, of Etna, was sentenced today in U.S. District Court by Judge Jon D. Levy to one year and a day in prison and three years of supervised release for conspiring to manufacture, distribute, and possess with intent to distribute marijuana. Mansfield pleaded guilty on February 15, 2018.
According to court records, during a period between October 2010 and August 2016, the defendant conspired with others to illegally manufacture and distribute marijuana. The defendant grew marijuana at a large, sophisticated indoor growing facility in Frankfort, Maine which he was told was an illegal medical marijuana grow. In May 2016, law enforcement officers executed a search warrant at the facility and seized about 400 marijuana plants, 295 marijuana root balls, and paraphernalia used to manufacture and process marijuana. According to the search warrant affidavit, the defendant and his co-conspirators were not registered as medical marijuana caregivers with the Maine Department of Health and Human Services (DHHS), and the location of the facility was not reported to DHHS.
The investigation was conducted by the U.S. Drug Enforcement Administration.
Eagle Butte Woman Sentenced for Methamphetamine ChargesRead the Press Release
United States Attorney Ron Parsons announced that an Eagle Butte, South Dakota, woman convicted of Conspiracy to Distribute Methamphetamine, was sentenced on June 27, 2018, by U.S. District Judge Roberto A. Lange.
Cherae Runs After, age 23, was sentenced to 120 months in federal prison, followed by 5 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Runs After was indicted by a federal grand jury on November 9, 2016. She pled guilty on April 19, 2018.
On or about August 1, 2015, and continuing through November 9, 2016, Runs After knowingly and intentionally combined, conspired, confederated and agreed with others to distribute and possess with the intent to distribute 500 grams or more of methamphetamine on the Cheyenne River Indian Reservation.
Runs After met Alfredo Chavez-Mendoza in Utah through her family. Chavez-Mendoza told Runs After that he wanted to come to South Dakota in order to make money selling methamphetamine. However, he did not know anybody in South Dakota, and more specifically, on the Cheyenne River Indian Reservation who either used, or distributed, methamphetamine. He asked Runs After to introduce him to drug dealers in the Eagle Butte area.
Runs After introduced Chavez-Mendoza to Kristina Lofton, Stephanie Lofton, and Robert "Blue" Lofton for the purpose of linking him with locals who could sell methamphetamine supplied by Chavez-Mendoza. Chavez-Mendoza worked together with the Lofton family to distribute methamphetamine on Cheyenne River.
In addition to being the party that introduced Chavez-Mendoza to the Cheyenne River area, Runs After also distributed methamphetamine for him. Runs After owed Chavez-Mendoza several thousand dollars for previous fronts of methamphetamine he made to her.
Alfredo Chavez-Mendoza, Christina Lofton, Stephanie Lofton, Robert Lofton, Tyler and Ashley Peterson, Roy Antrim, Braxtyn Garreau, and Charlie Marshall have all previously been convicted for their involvement in this narcotics trafficking conspiracy.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force, the Federal Bureau of Investigation, and Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
Runs After was immediately turned over to the custody of the U.S. Marshals Service.
Dose of reality - fighting the opioid epidemicRead the Press Release
ATLANTA – The U.S. Attorney’s Office for the Northern District of Georgia, in partnership with the Atlanta-Carolinas High Intensity Drug Trafficking Area (HIDTA) Program, have released an opioid public service announcement to remind Georgians that the opioid epidemic demands the urgent attention of everyone in our community.
“Fighting this epidemic remains our highest priority and we will continue to prosecute criminals who threaten our communities with these dangerous drugs,” said U.S. Attorney Byung J. “BJay” Pak. “This public service announcement is a renewed call to remain vigilant in our efforts, as we continue to confront the challenges of this public health emergency. We must continue to work together – parents, children, teachers, neighbors, stakeholders, businesses and community leaders – to fight this epidemic and save lives.
“Georgians unfortunately have gotten a dose of reality about the dangers of opioids,” said Daniel R. Salter, the Executive Director of the Atlanta-Carolinas High Intensity Drug Trafficking Area (HIDTA). “In 2017, too many Georgians (nearly 1,050) died as a result of opioid overdoses. Atlanta-Carolinas HIDTA is committed to forming strategic partnerships with law enforcement and community partners in an effort to combat this crisis.”
The public service announcement highlights Joseph Abraham, a 19-year-old from Gwinnett County, Georgia, who struggled with addiction and its consequences for several years. He first experimented with drugs in the 8th grade. Throughout the years, his parents, David and Kathi Abraham, intervened by providing Joe with drug treatment, sober living, therapy services, and participation in Alcoholics Anonymous / Narcotics Anonymous (AA/NA). On May 26, 2017, Joe lost his battle with drug addiction minutes after taking a fatal mixture of heroin and fentanyl. Joe is not alone. In 2017, an estimated 1,043 Georgians also lost their lives to opioid overdoses.
“My son has a name and he is more than a statistic. Joe made a mistake. A fatal mistake. One that could not be fixed. Our lives are forever changed because of the opioid problem that is devastating so many families like ours,” said Kathi Abraham. “Addiction does not discriminate. The opioid crisis and the rise of heroin use is not purely for people living in the inner city. Silence is not the solution. We must increase awareness, decrease the stigma of addiction, and educate both our parents and our children. It’s up to us to act in order to save others.”
The public service announcement is currently being shown in 17 theaters within the Northern District of Georgia as a reminder of the reality of this epidemic. To view the public service announcement, please visit our website at https://www.justice.gov/usao-ndga/video/dose-reality-georgia. For additional information and resources, please visit www.doseofrealityga.org/get-support.
This education campaign is part of Operation SCOPE (Strategically Combatting Opioids through Prosecution and Enforcement), which is an initiative launched by the U.S. Attorney’s Office to partner with federal and local law enforcement to fight the devastating effects that illegally-prescribed painkillers, heroin, and synthetic opioids, such as fentanyl have on our neighborhoods.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Document Fraud Leads to Federal Prison for Illegal AlienRead the Press Release
A Guatemalan man who unlawfully used a fraudulent identification document was sentenced today to almost three months in federal prison.
Miguel Abel Raymundo-Perez, age 25, a citizen of Guatemala illegally present in the United States and residing in Cedar Rapids, Iowa, received the prison term after a May 17, 2018 guilty plea to one count of unlawful use of identification documents.
At the guilty plea, Raymundo-Perez, an illegal alien, admitted that on May 24, 2014, he used a fraudulent Green Card when completing employment forms to get a job in Cedar Rapids. The social security account number and the Green Card number used by Raymundo-Perez belonged to other people. Raymundo-Perez also used the same fraudulent Green Card and social security account number when applying for work in Cedar Rapids in October 2014.
Raymundo-Perez was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. Raymundo-Perez was sentenced to 84 days’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. Raymundo-Perez is being held in the United States Marshal’s custody until he can be turned over to immigration officials.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by the Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 18-CR-26-LRR.
Follow us on Twitter @USAO_NDIA.
District of Idaho Participates in National Health Care Fraud TakedownRead the Press Release
BOISE – Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced today the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.
U.S. Attorney for the District of Idaho Bart M. Davis announced the District of Idaho’s participation in the National Health Care Fraud Takedown. In the District of Idaho, three defendants, all of whom are medical professionals, were charged for their roles in three separate fraud schemes involving controlled substances.
Jennifer Fanopoulos, 40, of Meridian, Idaho, is a registered nurse who pleaded not guilty on June 26, 2018, to an indictment charging her with multiple counts of obtaining controlled substances by fraud and identity theft. Fanopoulos’ trial is set for August 21, 2018, in front of Senior U.S. District Court Judge Edward J. Lodge at the federal courthouse in Boise.
Benjamin Hurley, 37, of Rigby, Idaho, is a pharmacist who pleaded not guilty on June 26, 2018, to an indictment charging him with two counts of obtaining controlled substances by fraud. Hurley’s trial will be set for a later date in front of U.S. District Court Judge David C. Nye at the federal courthouse in Boise.
John Steiner, 35, of Lewiston, Idaho, is a pharmacist who is charged in an indictment with multiple counts of obtaining controlled substances by fraud. Steiner is set to appear in court on July 3, 2018, before Chief U.S. Magistrate Judge Ronald E. Bush at the federal courthouse in Coeur d’Alene.
The charge of obtaining controlled substances by fraud is punishable by up to four years in prison, a maximum fine of $250,000 and one year of supervised release. The charge of identity theft is punishable by up to twenty years in prison, a maximum fine of $250,000, and three years of supervised release.
These three cases were investigated by the Drug Enforcement Agency Tactical Diversion Squad. The Department of Health and Human Services Office of Inspector General also assisted with the investigation of Fanopoulos.
An indictment is a means of charging a person with criminal activity. It is not evidence. A person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
# # #
Dexter Man Pleads Guilty to Marijuana ConspiracyRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Terrence Sawtelle, a/k/a “Terry,” 49, of Dexter, Maine pleaded guilty today in U.S. District Court to conspiring to manufacture, distribute, and possess with intent to distribute marijuana.
According to court records, during a period of time between October 2010 and August 2016, the defendant conspired with others to illegally manufacture and distribute marijuana at a facility in Frankfort, Maine and to distribute it at the Owl’s Club, in Bangor in violation of federal law, and under the cover of, but in violation of, Maine’s Medical Marijuana program.
In May 2016, agents searched the Frankfort facility and seized marijuana in various stages of harvest and cultivation, together with paraphernalia and items used to manufacture and process marijuana. In August 2016, agents searched property in downtown Bangor, including the Owl’s Club, and seized processed marijuana. At the time of the searches, the location of the Frankfort facility was not reported to DHHS as required.
The defendant faces up to 20 years in prison, between three years and life of supervised release, and a $1,000,000 fine. The defendant will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the U.S. Drug Enforcement Administration.
Des Moines Man Sentenced to Prison for Firearms OffensesRead the Press Release
David Marken Aikoriegie sentenced to 96 months for stealing firearms from area gun retailers
DES MOINES, Iowa – On June 27, 2018, David Marken Aikoriegie, age 23, of Des Moines, appeared before United States District Court Senior Judge Robert W. Pratt and was sentenced to 96 months in prison for three counts of stealing a firearm from a federal firearm licensee and unlawful sale of a stolen firearm, announced United States Attorney Marc Krickbaum. Aikoriegie was ordered to serve three years of supervised release to follow his prison term.
According to court documents, Aikoriegie admitted he stole three firearms from JLM Gun Shoppe in Urbandale on November 16, 2017; ten firearms from Rangemasters in Clive on December 2, 2017; and eleven firearms from Rangemasters on December 14, 2017. He also admitted to selling one of those stolen firearms to another person on December 16, 2017.
This investigation was conducted by the Clive Police Department; United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Des Moines Police Department; and Iowa Division of Narcotics Enforcement. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as 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.
Department of Justice Announces New Immigration Compliance Requirements for FY 2018 GrantsRead the Press Release
The Department of Justice today posted solicitations for four public safety grants. Applicants for these FY 2018 grants will be required to certify compliance with new conditions to these grants that will increase information sharing and other cooperation between federal, state, and local law enforcement. These new grant conditions will ensure that federal immigration authorities have the information they need to enforce immigration laws and keep our communities safe.
The new conditions require recipient jurisdictions to certify that they: (1) comply with 8 USC 1373 and 1644, which promote information sharing and other cooperation between state and local law enforcement and federal immigration authorities; (2) when practicable, provide advance notice before releasing a criminal alien from a state or local detention center; (3) permit Department of Homeland Security personnel to access criminal detention facilities in order to meet to conduct interviews of criminal aliens in state or local custody; and (4) comply with federal criminal laws related to the harboring of illegal aliens.
The grants also allow for preferential consideration of a grant application where the applicant plans to use immigration-cooperation tactics to address public safety in their jurisdiction.
"So-called 'sanctuary' policies make all of us less safe because they intentionally undermine our laws and protect illegal aliens who have committed crimes,” Attorney General Jeff Sessions said. “As part of accomplishing the Department of Justice's top priority of reducing violent crime, we must encourage these 'sanctuary' jurisdictions to change their policies that undermine public safety, and to partner with federal law enforcement to remove criminals.”
More details on these grants are below:
- Supporting Innovation: Field-Initiated Programs to Improve Officer and Public Safety
This grant solicitation invites applicants to pilot, assess, and implement original approaches that target emerging or chronic crime problems facing the country and placing our officers and public at risk.
- Justice Accountability Initiative (JAI): Pilot Projects Using Data-driven Systems to Reduce Crime and Recidivism
This grant solicitation invites applicants to reduce recidivism and crime by improving the effectiveness of risk assessments and to provide a more data-driven approach system-wide.
- Gang Suppression Planning: Build Capacity for a Multilateral Data-Driven Strategy to Promote Public Safety
This grant solicitation seeks to understand a jurisdiction’s gang landscape and be able to use data to develop effective gang control strategies. It will aim to reduce and sustain reductions in community youth violence, particularly gun and gang violence, and victimization; prevent violence and promote healing from victimization and exposure to violence in the home, school, and community; and increase the safety, well-being, and healthy development of children, youth, and families.
- A Law Enforcement and Prosecutorial Approach To Address Gang Recruitment of Unaccompanied Alien Children program:
This grant solicitation invites jurisdictions that have high levels of youth- perpetrated gun crime and gang violence and that can demonstrate a willingness and readiness to develop fully comprehensive community- and data-driven responses. Funding will support selected jurisdictions to undertake strategic planning and capacity-building work through multidisciplinary and community partnerships.
Defendants sentenced for an attempted armed carjacking at a Sam’s ClubRead the Press Release
ATLANTA - Arsalan Khalid Khan and Patrick Davis Gegenheimer have been sentenced to 10 years in federal prison for attempting to commit an armed carjacking in a busy Sam’s Club parking lot in Chamblee, Georgia.
“Khan and Gegenheimer showed no regard for life when they brazenly attempted to carjack an innocent shopper,” said U.S. Attorney Byung J. “BJay” Pak. “These criminals will no longer threaten the safety of our citizens, but will now serve lengthy prison sentences that reflect the serious and violent nature of their crimes.”
“This case is the product of a concerted collaborative effort on the part of ATF, the U.S. Attorney’s Office and the Chamblee Police Department to identify, investigate, and prosecute the perpetrators of this violent crime.” said Special Agent in Charge Arthur Peralta. “Khan and Gegenheimer chose to commit this act and use a gun. These sentences ensure that they will not have an opportunity to terrorize anyone for a long time.”
“We want to thank our partner law enforcement agencies for their efforts that resulted in the removal of two dangerous individuals from society,” said Chamblee Police Chief Donny Williams. “The reckless disregard for the safety of innocent bystanders demonstrated the necessity of a severe penalty in this instance. I am proud of the quick response of our officers on the street. They didn’t give up searching for these dangerous individuals when it appeared they had gotten away, and that made the difference.”
According to U.S. Attorney Pak, the charges and other information presented in court: On September 1, 2017, Khan and Gegenheimer approached a shopper as he was loading goods into his minivan in the parking lot of a Sam’s Club in Chamblee, Georgia. Khan aimed a pistol at the shopper and demanded his car keys. After the shopper complied, Khan ordered the victim to get into the minivan. At that point, the shopper grabbed the pistol and wrestled it away from Khan. The pistol discharged during the struggle, injuring Khan’s hand. Khan and Gegenheimer then fled the parking lot, however, Chamblee police officers found and arrested the defendants a few minutes later.
Arsalan Khalid Khan, 27, of Cumming, Georgia, and Patrick Davis Gegenheimer, 24, of Atlanta, Georgia were each sentenced to 10 years in prison, to be followed by five years of supervised release by U.S. District Judge Timothy C. Batten, Sr. The defendants were convicted of these charges on March 19, 2018, after pleading guilty to aiding and abetting each other in using a firearm to commit a violent crime.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Chamblee Police Department.
Assistant U.S. Attorney William G. Traynor prosecuted the case.
This case was brought as part of Project Safe Neighborhoods (PSN). In keeping with the Attorney General’s mission to reduce violent crime, the Northern District of Georgia’s PSN program focuses on prosecuting those individuals who most significantly drive violence in our communities, and supports and fosters partnerships between law enforcement and schools, the faith community, and local community leaders to prevent and deter future criminal conduct.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Defendant sentenced to prison for Ponzi scheme in which over 160 investors lost approximately $11 millionRead the Press Release
ATLANTA - Billy Wayne McClintock has been sentenced to prison for his role in a Ponzi scheme that garnered approximately $20 million and cost over 160 investors in excess of $11 million.
“McClintock and his co-conspirator promised investors a profitable and successful return on their investments, when in fact they were compensating investors with funds raised from other investors,” said U.S. Attorney Byung J. “BJay” Pak. “Investors should be cautious when offers that sound too good to be true are wrapped with promises of high rates of returns.”
“The victims who invested in this scheme may never be made whole again, but hopefully they can take some solace in the FBI’s commitment to hold McClintock, and anyone else who is motivated by greed, accountable for their actions,” said J. C. Hacker, Acting Special Agent in Charge of FBI Atlanta. “Unfortunately this case is a sad reminder to investors to be very careful where they entrust their hard earned money.”
According to U.S. Attorney Pak, the charges and other information presented in court: McClintock and a co-conspirator, Diane Alexander, operated a Ponzi scheme until being shut down by the U.S. Securities and Exchange Commission in the fall of 2012. McClintock and Alexander began the scheme as early as 2003, when McClintock signed up the first investors. McClintock was portrayed as the U.S. National Director of the “Trust,” a European based entity that purportedly engaged in various banking activities. Alexander first participated as an investor, and then became McClintock’s salesperson, portrayed as a “Regional Director” (although there is no evidence of any other directors).
McClintock and Alexander ultimately raised over $20 million from approximately 220 people nationwide for loans to the Trust. They offered 38 percent annual returns and told potential investors that their funds were sent to Europe for use in a variety of banking activities that purportedly generated profits sufficient to pay the promised returns. McClintock and Alexander also offered referral fees to investors as an incentive to recruit new investors.
In reality, McClintock pooled money from investors in U.S. bank accounts and used it to pay the promised returns and referral fees. In addition, McClintock and Alexander used investor funds for their personal benefit. McClintock took approximately $1.5 million in investor funds, withdrawing $285,000 in cash and also using funds to purchase a car, gold coins, solar panels for his home, costumes for a musical show, and other personal uses, including payment of property taxes.
There was no evidence that any money went to or came back from Europe, or of any real returns or profits from any actual investment, much less in amounts necessary to meet promises made to investors. When their scheme was terminated, over 160 investors incurred losses in excess of $11 million.
Billy Wayne McClintock, 76, of Bradenton, Florida has been sentenced to 10 years in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $10,100,111.76. McClintock was found guilty by a jury on January 25, 2018.
This case was investigated by the Federal Bureau of Investigation.
Douglas W. Gilfillan, Chief of the Cyber and Intellectual Property Section, and Assistant U.S Attorney Alex R. Sistla prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Davenport Man Pleads Guilty to Heroin DistributionRead the Press Release
Larry Lazell Bolden admitted to distributing heroin involved in overdose deaths
DAVENPORT, IA – On Wednesday, June 27, 2018, Larry Lazell Bolden, age 50, of Davenport, appeared before United States Magistrate Judge Stephen B. Jackson, Jr. and pleaded guilty to Distribution of a Controlled Substance Resulting in Death announced United States Attorney Marc Krickbaum.
According to the plea agreement, Bolden admitted to distributing heroin to a confidential informant beginning in December 2016. Bolden also admitted to distributing heroin in January 2017 to an individual at a hotel in Davenport. That individual supplied the heroin to a friend, who died shortly after ingesting the substance. Lab results confirmed the substance contained fentanyl. Bolden admitted several days after the overdose death, he distributed heroin to an another individual at the same hotel. That person died shortly after ingesting the substance.
Sentencing is scheduled for October 23, 2018, at 10:00 a.m. before United States District Court Judge Stephanie M. Rose. Bolden faces a mandatory minimum term of imprisonment of twenty years, a maximum term of imprisonment of life, and a maximum fine of $2,000,000.
This matter was investigated by the Davenport, Rock Island, and Moline Police Departments. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Dallas Man Pleads Guilty to Methamphetamine-Trafficking ConspiracyRead the Press Release
U.S. Attorney Duane A. Evans announced that MICHAEL LEVERIDGE, age 45, of Dallas, Texas, pled guilty today to one count of conspiring to traffic 500 grams or more of methamphetamine. For this offense, LEVERIDGE 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 five years of supervised release. U.S. District Judge Jane Triche Milazzo set sentencing for LEVERIDGE on September 27, 2018.
According to court documents, in 2014, during the New Orleans Decadence Festival, LEVERIDGE traveled to New Orleans with approximately 21 ounces (over one-half kilogram) of a mixture containing methamphetamine. LEVERIDGE intended to resell the methamphetamine in the New Orleans area. Agents recovered the 21 ounces of methamphetamine, along with other contraband, during a search warrant of LEVERIDGE’s room at the Bourbon Orleans Hotel in the French Quarter over Decadence Festival weekend.
U.S. Attorney Evans praised the work of the Drug Enforcement Administration and the Louisiana State Police in investigating this matter. Assistant United States Attorney Brandon S. Long is in charge of the prosecution.
Convicted Felon Sentenced to More than Five Years in Federal Prison After Throwing a Loaded Gun out a Car Window in Cedar RapidsRead the Press Release
A convicted felon who threw a loaded gun out a car window during a traffic stop in Cedar Rapids was sentenced today to more than five years in federal prison.
Iviontae Jackson, age 24, from Cedar Rapids, Iowa, received the prison term after a January 4, 2018 guilty plea to one count of being a felon in possession of a firearm.
Information at sentencing showed that Jackson was riding in a car on October 22, 2017, when the Cedar Rapids police initiated a traffic stop of the car. Jackson threw a loaded gun out the window, but officers were able to find it. Jackson had previously been convicted of assault with a dangerous weapon in 2011. In that case, Jackson had stolen $8,000 in jewelry from a jewelry store in the Coral Ridge mall in Coralville, Iowa. An employee of the store tried to chase him, but Jackson swung a knife at and threatened to cut the employee. Jackson was also convicted of conspiracy in 2015, which resulted in a victim being struck with a gun. Jackson was discharged from probation on the 2015 conviction on October 8, 2017, only two weeks before being caught with the loaded gun he threw out the window. In sentencing Jackson, the court noted he had been treated leniently in past criminal convictions, his history of violence starting at age 11, and that he was at a high risk to recidivate.
Jackson was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. Clark was sentenced to 64 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Jackson is being held in the United States Marshal’s custody until he can be transported to a federal prison.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and investigated by the Cedar Rapids Safe Streets Task Force. The task force is composed of representatives from the Federal Bureau of Investigation, United States Marshal Service, and the Cedar Rapids Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-cr-91.
Follow us on Twitter @USAO_NDIA.
Convicted Felon Charged in a Federal Indictment in Connection with Two Armed Robberies in the Central West EndRead the Press Release
St. Louis, MO – Brandon Mardell Woods, 33, of St. Louis, was charged in a federal indictment charging him with two felony count of interference with commerce by threats or violence; two felony counts of brandishing a firearm in furtherance of a crime of violence; two felony counts of carjacking; and one felony count of felon in possession of a firearm.
According to the court documents, on or about June 17, 2018, Robbery victim “R.C.” was walking to her vehicle in the 4400 block of Maryland when an individual later determined to be Brandon Mardell Woods (“Woods”) approached her from behind. Woods stuck a gun in her stomach and demanded that R.C. give him her money. When R.C. advised Woods that she didn’t have any money, Woods ordered her to take him to an ATM.
Woods pointed the firearm at her as he drove her car to a U.S. Bank ATM in the 3500 block of North Kingshighway. Woods attempted to use R.C.’s ATM card but the ATM didn’t work. He drove to an Action Banking ATM at a BP Gas Station in the 5000 block of Natural Bridge and used R.C’s ATM card to withdraw $500.00. Woods eventually got out of the car and R.C. was able to drive away. Security photographs show Woods using R.C.’s ATM card.
On June 19, 2018, Woods approached robbery victim “M.F.” with a gun and ordered her to take money out of the same ATM as the June 17th victim.
On June 20, 2018, St. Louis Police officers spotted Woods walking in the 5100 block of Natural Bridge. Seeing the police, Woods dropped the backpack he was carrying and fled. Woods was soon after taken into custody nearby. He was found to be in possession of more than 30 rounds of ammunition. The police seized and searched his backpack. In it, they found a .38 special handgun.
If convicted, the charge of interference with commerce by threat or violence carries a maximum penalty of 20 years in prison and a $250,000 fine; the charge of brandishing a firearm in furtherance of a crime of violence carries a penalty of not less than 7 years, not more than life, consecutive to all other counts, and a $250,000 fine; the charge of carjacking carries a maximum penalty of 15 years in prison and a $250,000 fine; and the charge of felon in possession of a firearm carries a maximum penalty of 10 years in prison and a $250,000 fine.
“I am grateful that an armed robber has been taken off the streets as a result of continued cooperation between the St. Louis Police Department and our federal law enforcement partners” said U.S. Attorney Jeffrey B. Jensen. “This is another case made through the courageous cooperation of crime victims. This type of cooperation is essential to effectively addressing our community’s gun violence.”
As is always the case, charges set forth in the indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
This case is being investigated by the St. Louis Metropolitan Police Department, the Federal Bureau of Investigation and the Circuit Attorney’s Office. Assistant United States Attorney Jennifer Roy is handling the case for the U.S. Attorney’s Office.
Colorado Power Company Executive Sentenced to Prison, Fined, Ordered to Pay Restitution for Defrauding the Department of EnergyRead the Press Release
PITTSBURGH, PA - A Colorado power company executive has been sentenced in federal court to 18 months’ imprisonment, three years supervised release, a $50,000 fine and $2 million dollars in restitution on his conviction of filing a false claim against the United States Department of Energy, United States Attorney Scott W. Brady announced today.
Chief United States District Judge Joy Flowers Conti imposed sentence yesterday on Michael J. Ruffatto, 72, of Englewood, CO.
In connection with the sentencing, the court was advised that on December 8, 2009, the Department of Energy’s National Energy Technology Laboratory, located in Pittsburgh, Pennsylvania, awarded a multi-million dollar cooperative agreement to North American Power Group Ltd. (NAPG), a corporation headquartered in Denver, Colorado, that is owned and controlled by Ruffatto, an attorney and graduate of Stanford University.
The purpose of the agreement was to study the carbon sequestration potential of an 880-acre site in Campbell County, Wyoming. The agreement required NAPG to conduct seismic studies and to drill wells necessary for the studies. Instead of performing the work required under the cooperative agreement, Ruffatto fraudulently transferred millions of dollars of award monies into his personal bank account and used the award monies to fund an extravagant lifestyle. Ruffatto secretly filtered millions of dollars of award monies through Ruffatto’s wholly owned subsidiary, North American Land and Livestock, LLC, while falsely representing to the Department of Energy that the subsidiary was doing work on the project.
At Ruffatto’ s direction, NAPG submitted twelve invoices to the Department of Energy that were false and fraudulent, resulting in the wrongful payment of over $5,700,000 in award monies as a result of the fraud. As part of the terms of the plea agreement, Ruffatto accepted responsibility for all twelve false claims filed with the Department of Energy and agreed to make full restitution of over 2 million dollars currently owed as restitution to the Department of Energy. Ruffatto has already paid $3.7 million to the government toward his restitution.
Assistant United States Attorney Mary McKeen Houghton prosecuted this case on behalf of the government.
United States Attorney Brady commended the United States Department of Energy, Office of Inspector General, for the investigation leading to the conviction in this case.
Colorado Doctor Arrested and Charged with Selling Oxycodone Prescriptions for CashRead the Press Release
DENVER – John Van Wu, age 48, of Golden, was arrested today pursuant to a warrant issued in connection with an indictment charging him with violations of the Controlled Substances Act, mail fraud, and falsification of records, announced U.S. Attorney Bob Troyer, Drug Enforcement Administration Special Agent in Charge William T. McDermott, and Department of Labor Employee Benefits Security Administration Regional Director James Purcell.
As described in the indictment, the defendant operated a medical clinic at locations in Lakewood and Denver between January 2011 and March 2015. During that time period the defendant devised a scheme in which he billed employee benefit programs and insurers for services that were never actually rendered and not medically necessary. For example, the defendant billed insurance programs for expensive, time-consuming office visits when his patients had relatively routine ailments. He also billed those programs for injections that he did not actually perform. The defendant also claimed to have provided office visits to patients who were outside of the country on the day the visits purportedly took place.
The indictment also alleges that the defendant sold oxycodone prescriptions for cash when presented with the driver’s license of others to whom he could issue the prescription. He then created fake medical files containing false information about the services purportedly provided to those patients.
Today’s arrest is part of the National Health Care Fraud Takedown announced by the Department of Justice. The defendant is one of seventy-six doctors charged in opioid cases prosecuted around the country. https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-charges-against-601-individuals-responsible-over. This case was unsealed this morning after the defendant’s arrest.
The case was jointly investigated by the Drug Enforcement Administration and the U.S. Department of Labor Employee Benefits Security Administration. The defendant is being prosecuted by Assistant United States Attorney Bryan D. Fields.
The defendant is presumed innocent unless and until proven guilty in a court of law.
Cleveland woman indicted for making straw purchase of rifle used in attempted robbery of Willoughby credit unionRead the Press Release
A Cleveland woman was indicted in federal court for making a straw purchase from a gun store in Eastlake of a rifle that was later used in the attempted robbery of a credit union.
Marshyia S. Ligon, 20, was indicted on one count of making a false statement in the acquisition of a firearm.
Ligon made false statements on Oct. 4, 2017 when she purchased a Smith & Wesson M&P 15, 556 caliber rifle bearing the serial number TH11301 from Sherwin Shooting Sports, 33140 Vine Street in Eastlake. Ligon falsely stated she was the actual buyer of the rifle when, in fact, she was not the actual buyer of the firearms, according to the indictment.
The firearm was recovered one week later at the Willoughby Eastlake Schools Credit Union, where it was used in an attempt to rob the credit union.
This case was investigated by the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives and the Willoughby Police Department, with assistance from the Cuyahoga County Prosecutor’s Crime Strategies Unit. It is being prosecuted by Assistant U.S. Attorney Scott Zarzycki.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
An indictment is a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Cheshire Man Admits to Distributing Narcotics to Overdose VictimRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that THOMAS J. HALLERAN, 36, of Cheshire, waived his right to be indicted and pleaded guilty today in Hartford federal court to one count of possession with intent to distribute, and distribution of, heroin and/or fentanyl.
This matter stems from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
According to court documents and statements made in court, on July 25, 2017, Southington Police and emergency medical personnel responded to a residence in Southington where they encountered an unresponsive 31-year-old female on the floor. The female was pronounced deceased. Investigators seized five folds of suspected heroin/fentanyl, two empty folds, other drug paraphernalia, and the victim’s cellphone.
The Office of the Chief Medical Examiner for the State of Connecticut concluded that the victim’s death was caused by the combined effects of fentanyl, acetyl fentanyl, methadone, alprazolam and alcohol.
Analysis of the seized cellphone revealed that HALLERAN had been supplying heroin/fentanyl to the victim for approximately six weeks, and that he delivered heroin/fentanyl to the victim at her residence on the night of July 24, 2017.
HALLERAN is scheduled to be sentenced by U.S. District Judge Michael P. Shea in Hartford on September 21, 2018. The offense carries a maximum term of imprisonment of 20 years.
HALLERAN is detained pending sentencing.
This matter has been investigated by the Drug Enforcement Administration’s New Haven Task Force and the Southington Police Department. The case is being prosecuted by Assistant U.S. Attorney Deborah R. Slater.
Charges filed against second defendant for insider trading related to the Equifax data breachRead the Press Release
ATLANTA - Sudhakar Reddy Bonthu, a former software development manager for Equifax, was arraigned today on federal charges of insider trading for allegedly using information entrusted to him to purchase put options and turn a profit when the news of the data breach was made public. A grand jury previously indicted Jun Ying, a former chief information officer of Equifax U.S. Information Solutions, on charges of insider trading relating to the data breach. Ying pleaded not guilty on March 15, 2018.
“Bonthu allegedly took advantage of his position to profit while members of the public were unaware of the data breach at Equifax,” said U.S. Attorney Byung J. “BJay” Pak. “The integrity of the stock markets are jeopardized when greedy individuals who are entrusted with nonpublic information use the knowledge for their benefit.”
“Company insiders must follow the same rules that govern investors, otherwise their actions undermine the public’s confidence in the nation’s stock markets,” said J. C. Hacker, Acting Special Agent in Charge of FBI Atlanta. “To maintain a fair and equitable stock market for everyone, the FBI will do everything in its power to hold those accountable who would choose to take advantage of their inside knowledge.”
“As alleged in our complaint, Bonthu used confidential information to determine that his company had suffered a massive data breach and then illegally profited from it,” said Richard R. Best, Director of the Securities and Exchange Commission’s Atlanta Regional Office. “Corporate employees cannot take advantage of their access to sensitive information and unlawfully benefit from it.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Equifax Inc. is a consumer credit reporting agency headquartered in Atlanta. During the summer of 2017, Equifax was the victim of a data breach, where hackers acquired names, Social Security numbers, birth dates, and addresses of over 145 million consumers.
Sudhakar Reddy Bonthu was a software development manager for Equifax’s Global Consumer Services team in August 2017. In that role, he was entrusted with information that allegedly resulted in him concluding that Equifax was the victim of a data breach. On August 25, 2017, Bonthu and other Equifax employees were asked to assist in responding to the breach, although he was not directly informed that Equifax had been breached. On August 25, 2017, Bonthu was informed that the target date for announcing the breach publicly was September 6, 2017. Around August 30, 2017, Bonthu learned that approximately 100 million individuals’ information was exposed as part of the breach and that the data included names and Social Security numbers. The next day, Bonthu received an email related to his work on the breach with a file attached named “EFXDatabreach.postman_collection.” “EFX” is the stock ticker symbol for Equifax.
On September 1, 2017, Bonthu bought 86 put options in Equifax stock that expired on September 15, 2017. Those put options allowed him to profit if the value of Equifax stock dropped within that two-week period. Equifax publicly disclosed the data breach on September 7, 2017, and its stock fell the next day. Bonthu then exercised his put options, realizing a profit of more than $75,000.
Sudhakar Reddy Bonthu, 44, of Atlanta, Georgia was arraigned on a criminal information before U.S. Magistrate Judge Alan J. Baverman, after waiving his right to be indicted by a federal grand jury.
Members of the public are reminded that an information and an indictment only contain charges. A defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation, with assistance from the U.S. Securities and Exchange Commission.
Christopher J. Huber, Deputy Chief of the Complex Frauds Section, and Assistant U.S. Attorney Lynsey M. Barron are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
CVS Pharmacy, Inc. to Pay $1.5 Million to Settle Civil Penalty Claims for Violations of the Controlled Substances ActRead the Press Release
CVS Pharmacy, Inc. (“CVS”) has agreed to pay $1.5 million to resolve the United States’ investigation that certain of its pharmacy stores located in Nassau and Suffolk counties on Long Island violated the federal Controlled Substances Act (“CSA”) by failing to timely report the loss or theft of controlled substances, including hydrocodone, an opioid that is one of the most commonly diverted controlled substances. The CSA requires pharmacies, such as CVS, to timely report the loss or theft of controlled substances so that DEA can promptly investigate.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, U.S. Drug Enforcement Administration, New York Division (DEA), announced the settlement.
“The failure to promptly report the loss or theft of prescription drugs as required by law contributes to the opioid epidemic, which has caused devastating harm to individuals and our community,” stated United States Attorney Donoghue. “The settlement with CVS demonstrates the resolve by this Office and the DEA to use all available tools to address this crisis at every level and reduce the availability of highly addictive, dangerous drugs.”
“This year, it is estimated that more than two million Americans will suffer from opioid addiction,” stated DEA Special Agent-in-Charge Hunt. “Law enforcement, treatment professionals and educators are arming ourselves with strategies and actions to combat this growing crisis. Through regulatory actions, DEA Diversion investigators and the EDNY identified that CVS violated the Controlled Substances Act. This settlement is significant because it shows that big chain pharmacies, like CVS, are taking responsibility for violating federal law, which is a step in the right direction for curbing the opioid epidemic.”
CVS is a Rhode Island corporation with its corporate headquarters in Woonsocket, Rhode Island. CVS, directly or through its retail pharmacy subsidiaries and affiliates, operates retail pharmacies in the State of New York that dispense prescription drugs, including controlled substances, to retail consumers.
Opioid abuse has reached epidemic proportions throughout the United States. According to the United States Department of Health & Human Services Centers for Disease Control and Prevention (“CDC”), on average 46 Americans died every day from an overdose involving prescription opioids in 2016. In response to the overwhelming number of prescriptions, and the mounting number of overdoses and deaths, two months ago the CDC issued new guidelines recommending that doctors prescribe less addictive and less powerful pain relievers before prescribing highly addictive drugs, and that they prescribe limited amounts.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA’s Long Island District Office Diversion Group D-11, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department and New York State Police, along with other key federal, state and local government partners, launched the Initiative to mount a comprehensive response to the increase in opioid abuse. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 22 health care professionals. The Initiative also has resulted in civil enforcement actions against a hospital, a pharmacy and a pharmacy chain, the removal of prescription authority from numerous doctors and the expansion of information sharing among enforcement agencies to better target and pursue drug traffickers.
The United States’ case is being handled by Assistant United States Attorney Diane C. Leonardo of the Office’s Civil Division.
Today, the Department of Justice also announced a national healthcare fraud takedown that resulted in charges against 601 individuals responsible for over $2 billion in fraud losses, which can be viewed at: https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-charges-against-601-individuals-responsible-over.
Boston-Area Investment Adviser Sentenced for FraudRead the Press Release
BOSTON – A Boston-area investment adviser was sentenced today in federal court in Boston for using his clients’ funds to make his own investments and to pay personal expenses.
Cornelius Peterson, 29, of Newton, was senteced by U.S. District Court Judge Nathaniel M. Gorton to 20 months in prison, two years of supervised release and ordered to pay restitution in the amount of $462,000. Peterson previously pleaded guilty to one count of conspiracy and investment adviser fraud and three counts of bank fraud. Co-defendant James Polese, 51, of Wenham, pleaded guilty in April 2018 to one count of conspiracy and investment adviser fraud, eight counts of bank fraud, and one count of aggravated identity theft. He is scheduled to be sentenced on Aug. 2, 2018.
From approximately 2014 to June 2017, Polese and Peterson misappropriated approximately half a million dollars from their clients by transferring funds out of their clients’ accounts without their knowledge or consent. Specifically, on Aug. 20, 2014, Polese and Peterson used $100,000 from a client’s account to invest in a wind farm project despite the fact that it was not an investment opportunity authorized by their company. On May 15, 2015, Polese and Peterson used $400,000 from another client’s account to back a letter of credit in support of the wind farm project. On multiple occasions in 2017, Polese transferred funds from a client’s account to pay personal expenses, including college tuition payments and credit card bills. Polese and Peterson were terminated from the company in June 2017.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Securities & Exchange Commission also provided valuable assistance with the investigation. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Economic Crimes Unit prosecuted the case.
Bergen County, New Jersey, Man Admits Conspiring to Defraud the IRS by Filing False Corporate Tax ReturnsRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man today admitted conspiring with his father to file false federal tax returns for shell companies, resulting in $191,953 in fraudulent refunds, U.S. Attorney Craig Carpenito announced.
Jason Crespo, 35, of Elmwood Park, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of conspiring with Jose Crespo, his father, to defraud the IRS by filing false corporate tax returns and cashing the resulting fraudulent refund checks.
According to the documents filed in this case and statements made in court:
Between 2010 and 2012, Jason and Jose Crespo filed numerous false federal corporate tax returns – IRS Forms 1120 – for fake businesses, knowing that the businesses were not real and that the credits claimed on the tax returns were false. The Crespos took advantage of fuel excise tax credits offered under federal tax law. The federal government taxes gasoline, diesel fuel, and certain other types of fuel, but certain commercial uses of these fuels are nontaxable. Businesses that purchase fuel for a nontaxable use can claim a tax credit by filing a “Credit for Federal Tax Paid on Fuels” – IRS Form 4136.
In one instance Jason and Jose Crespo filed a federal corporate tax return for 2008 for Jason Cleaning Service Corp. that falsely claimed a fuel excise tax credit of $14,556 and a resulting refund of $10,592. In fact, Jason Cleaning Service Corporation was a shell company and the fuel excise tax credit and other tax return numbers were false. Jason Crespo received and cashed the $10,592 refund check at a check-cashing facility in Guttenberg, New Jersey. He cashed many other refund checks for similar false tax returns at this same facility.
Jose Crespo pleaded guilty on Sept. 11, 2017, before Judge Linares to engaging in the fuel excise tax credit scheme and another tax fraud scheme, both of which claimed fraudulent refunds from the IRS of approximately $1.5 million. Jose Crespo was sentenced on Dec. 20, 2017, to three years in prison.
Marilyn Crespo, Jose Crespo’s wife, pleaded guilty on March 1, 2018, before Judge Linares to engaging in the same fuel excise tax credit scheme and causing a loss to the IRS of $286,742. She was sentenced June 27, 2018, to one year and one day in prison.
The filing a false tax return count carries a maximum potential penalty of three years in prison, and a potential $250,000 fine, or twice the gross gain or loss from the offense. Jason Crespo’s sentencing is set for Oct. 4, 2018.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson, with the investigation leading to today’s guilty plea.The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division in Newark.
Defense counsel: Rubin Sinins Esq., Springfield, New Jersey