Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
16 May 2018
Armed Drug Trafficker Pleads GuiltyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Phillip Taylor, 28, of Rochester, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to possession with intent to distribute cocaine and possession of a firearm and ammunition by a convicted felon. The charges carry a maximum penalty of 30 years in prison, and a fine of $2,000,000 or both.
Assistant U.S. Attorney Charles Moynihan, who is handling the case, stated that Taylor, a two-time convicted felon, was arrested following a police investigation which took Rochester Police officers to 173 Anderson Avenue to investigate a report of a person dropping a handgun in the parking lot of the business located there. When officers arrived, they saw a person, later identified as Taylor, get into the driver’s seat of a blue Ford Escape and drive off after officers went to speak with him about the reported handgun. The defendant drove his car in the direction of one of the responding officers, coming within inches before driving away. Taylor also struck a brick structure with his vehicle as he exited the parking lot and continued traveling westbound on Anderson Avenue as officers pursued him. Officers followed Taylor in police cars onto College Avenue where the defendant struck a tree. Undeterred, Taylor continued to flee on foot with officers in pursuit. During the chase, officers could see the defendant holding the right side of his pants while making several attempts to remove something from his pants pocket. Taylor was taken into custody in the area of 100 College Avenue. Officers searched the defendant and recovered a loaded .380 caliber semiautomatic handgun in his pocket, $704 in cash, and 12 vials containing cocaine.The plea is the result of an investigation by the Rochester Police Department, under the direction of Chief Michael Ciminelli, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict.
Sentencing is scheduled for September 4, 2018 at 3:30 p.m. before Judge Geraci.
Another Corpus Christi Man Sent to Prison on Child Pornography ChargeRead the Press Release
CORPUS CHRISTI, Texas - A 26-year-old Corpus Christi man has been sent to after authorities discovered he possessed more than 22,000 child pornography images, announced U.S. Attorney Ryan K. Patrick. Nicolas Hamm pleaded guilty to possession of child pornography on Feb. 13, 2018.
Today, U.S. District Judge Nelva Gonzales Ramos sentenced Hamm to 108 months in prison. He was further ordered to serve 10 years on supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender. At the hearing, the court heard evidence that Hamm admitted to sexually assaulting a four-year-old family member when he was a juvenile.
In January 2017, authorities in Oklahoma were investigating an individual for sex trafficking charges. A search of that person’s cellular telephone revealed communications via a messenger application with another person with a user name of “jax1821.” The communications involved the sexual exploitation of children and user name of “jax1821” was later linked to Hamm
In December 2017, law enforcement executed a search warrant at Hamm’s residence and seized several digital devices which led to the discovery of more than 22,000 images and 3,600 videos of child pornography. Many of the videos portrayed prepubescent females involved in sexually explicit conduct with adult males.
Hamm has been and will remain in custody pending his sentencing hearing.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of the Corpus Christi Police Department’s Internet Crimes Against Children Task Force.
Assistant U.S. Attorney Hugo R. Martinez is prosecuting the case, which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
A Former North Texas Mayor and a Land Developer Indicted on Public Corruption Charges in Zoning ConspiracyRead the Press Release
PLANO, Texas –The former mayor of Richardson, Texas and a land developer who she eventually married, have been indicted on federal conspiracy violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Laura Jordan, also known as Laura Maczka, 53, and Mark Jordan, 51, both of Plano, Texas were named in a seven-count indictment charging them with conspiracy to commit honest services wire fraud, honest services wire fraud, conspiracy to commit bribery, and bribery concerning programs receiving federal funds. A federal grand jury returned the indictment on May 10, 2018. Maczka and Jordan made initial appearances before U.S. Magistrate Judge Kimberly Priest Johnson today.
According to the indictment, from May 2013 through April 2015, Maczka was the mayor of Richardson, Texas, and Jordan was a land developer. The indictment alleges that Maczka and Jordan conspired to devise and execute a scheme to defraud and deprive City of Richardson residents of the honest services of the Mayor through bribery. Maczka, contrary to her campaign promises, supported and repeatedly voted for controversial zoning changes sought by Jordan ultimately allowing for the construction of over 1,000 new apartments in Richardson near Richardson neighborhoods. The indictment alleges that, in exchange, Jordan paid Maczka over $18,000 in cash and $40,000 by check, paid for over $24,000 in renovations to Maczka’s home, paid for Maczka’s luxury hotel stays and airfare upgrades, and provided Maczka lucrative employment at one of Jordan’s companies. According to the indictment, Maczka and Jordan failed to disclose to the public that they had coordinated to effect the zoning changes Jordan wanted and that Jordan had provided a stream of benefits to Maczka.
“These are the kinds of things that make the public distrust government officials,” said U.S. Attorney Joseph D. Brown. “Public servants should not be for sale, and this indictment clearly indicates that that Ms. Maczka’s vote was for sale, and Mr. Jordan certainly was willing to buy it.”
"With the indictment and arrest of Maczka and Jordan, the FBI will continue its efforts to identify and bring to justice those public servants who use their positions of trust to benefit themselves personally and conspire with others to violate federal corruption laws," said Erick K. Jackson, FBI Dallas Special Agent-In-Charge.
If convicted, both Maczka and Jordan face up to 20 years in federal prison.
This case is being investigated by the Federal Bureau of Investigation.
A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
15 May 2018
“John Doe” Sentenced to 42 Months in Prison for Passport Fraud, Social Security Fraud, Aggravated Identity Theft, and Two Counts of Voter FraudRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – United States District Judge Ellen L. Hollander sentenced defendant “John Doe,” whose true identity remains unknown, to 42 months in prison, followed by three years of supervised release, for charges of passport fraud, social security fraud, aggravated identity theft, and two counts of voter fraud.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Richard J. Ingram for the Washington Field Office of the U.S. Department of State’s Diplomatic Security Service; and Special Agent in Charge Michael McGill of the Social Security Administration - Office of the Inspector General, Philadelphia Field Division.
According to evidence presented at the five-day trial, beginning at an unknown time, the defendant has lived under the assumed identity of a United States Citizen born in the United States Virgin Islands.
Beginning no later than the summer of 1997, the defendant used the victim’s personally identifiable information to obtain a series of driver’s licenses and identification cards, including a Maryland state identification card and multiple Maryland driver’s licenses. Building upon these documents, the defendant also obtained a United States passport and a Social Security card, and registered to vote.
On June 21, 2015, the defendant was interviewed by Diplomatic Security Service (DSS) investigators about his passport applications and claims to be Cheyenne Moody Davis. The defendant falsely claimed to have served as a Military Police officer in the 200th Military Police Command at Fort Meade from 2005 through 2008, and told agents that he completed his military police training at Fort Knox and Fort Hood. He was unable to produce a military identification card and stated that he lost it, but during the interview showed State Department investigators military-standard dog tags bearing the name “Cheyenne M Davis,” and the real Davis’ Social Security number.
The government later learned that John Doe purchased these dog tags online, along with a number of other military-related items, including patches for the 200th Military Police Command, military police, and uniform patches bearing the name “Davis.”
A review of the contents of the defendant’s social media accounts showed that he made statements to multiple other users that he was in the U.S. Army or Army Reserve, and worked at the Fort Meade military base in Maryland. The U.S. Army 200th Military Police Command at Fort Meade confirmed that no one ever served in the U.S. Army under the name or PII of Cheyenne Moody Davis. The U.S. Army also confirmed that military police are not trained at Fort Knox or Fort Hood.
Finally, defendant John Doe voted in the 2016 Presidential Election using the stolen identity.
United States Attorney Robert K. Hur commended the Department of State’s Diplomatic Security Service and the Social Security Administration - Office of the Inspector General for their work in the investigation. Mr. Hur acknowledged the assistance of the Acting United States Attorney Joycelyn Hewlett in the District of the Virgin Islands and the Howard County Police Department, and thanked Assistant U.S. Attorneys Zachary A. Myers and Phil Selden, who prosecuted this case.
If anyone has any information on the identity of “John Doe,” who has used the name Cheyenne Moody Davis, they are asked to e-mail the Diplomatic Security Service (DSS) at [email protected].
According to DSS, John Doe is approximately 41-44 years old, 5’8”, with light brown eyes and has previously gone by the pseudonyms “Chris” or “Richie.” John Doe may be from Antigua, Barbuda, the Dominican Republic, Haiti, or Jamaica. According to evidence introduced at trial, he has a Jamaican accent. According to DSS, John Doe would have been between 20 to 25 years old when he left disappeared from his community around June of 1997. More information can be found at https://www.state.gov/m/ds/rls/274463.htm.
Wooster men sentenced to prison for selling heroin that contributed to woman's deathRead the Press Release
Two Wooster men were sentenced to prison for distributing heroin that contributed to the fatal overdose of a Wayne County woman.
Jamie Curtis, 37, was sentenced to seven years in prison. Theodore Alleman, 28, was sentenced to four years in prison. Both previously pleaded guilty to distribution of heroin. Curtis also pleaded guilty to being a felon in possession of a firearm.
Curtis sold heroin and cocaine to Alleman from June 2016 through January 2017, according to court documents.
Alleman, on Nov. 12, 2016, contacted a Wayne County woman identified in court documents as H.C. H.C. was 21 years old and a recovering drug addict. Alleman repeatedly attempted to persuade H.C. to inject heroin with him, but she refused, according to court documents.
Alleman purchased drinks for H.C. throughout the evening at a local pub and continued to ask her to inject heroin with him. In the early morning hours of Nov. 13, H.C. agreed. Alleman went to an ATM to get money and texted Curtis “I need a g” (gram of heroin), according to court documents.
A friend identified in the indictment as G.C. fought with Alleman and H.C. about getting heroin. C.G. was forcefully removed from the vehicle. Alleman and H.C. met with Curtis and purchased heroin and cocaine, according to court documents.
On Nov. 13, Alleman prepared a mixture of heroin and cocaine that he and H.C. injected. H.C. then overdosed and died, according to court documents.
“This case demonstrates the terrible toll taken on our community by this epidemic,” U.S. Attorney Justin Herdman said. “We will continue to prosecute dealers who profit from pain caused to families while trying to get help for those who are ready to change their lives.”
DEA Special Agent in Charge Timothy J. Plancon said: “Today, our justice system was at its best. The successful investigation and prosecution of individuals who pollute our neighborhoods with deadly drugs is a victory for the Wooster community. The DEA will continue to target the most heinous drug traffickers in efforts remove them from the streets of America.”
“The continued collaborative efforts of the Medway Drug Task Force and the Cleveland DEA to investigate these opiate overdoses, truly sends a message to our community that people will be held accountable,” said MEDWAY Director Don Hall.
This case is prosecuted by Assistant U.S. Attorney Teresa Riley following an investigation by the DEA, ATF, MEDWAY Drug Enforcement Agency, Wooster Police Department, Wayne County Sheriff's Office, Wayne County Coroner's Office and Ohio BCI.
Woodlands Man Guilty in Eastern District of Texas Wire Fraud ConspiracyRead the Press Release
PLANO, Texas – A 52-year-old, The Woodlands, Texas, man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Arlando Jacobs pleaded guilty to conspiracy to commit wire fraud on May 14, 2018, before U.S. Magistrate Judge Kimberly Priest Johnson.
According to information presented in court, from October 2011 through April 2017, Jacobs conspired with others to create and submit fraudulent mortgage lien documents to title companies and financial institutions in order to receive transfers of funds they were not entitled to receive. Jacobs was indicted by a federal grand jury in October 2017. Co-defendant, Clarence Roland, is scheduled for trial in September 2018.
Under federal statutes, Jacobs faces up to 30 years in federal prison at sentencing. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case is being investigated by the Federal Housing Finance Agency-Office of Inspector General, Federal Bureau of Investigation, and Housing & Urban Development-Office of Inspector General. This case is being prosecuted by Assistant U.S. Attorney Christopher Eason.
####
West Virginia Man Sentenced on Fraud ChargesRead the Press Release
BOSTON – A Beckley, W.Va., man was sentenced today in federal court in Boston in connection with a scheme in which he purported to sell paintings stolen from the Isabella Stewart Gardner Museum in 1990, on Craigslist.
Todd Andrew Desper, a/k/a “Mordokwan,” 48, was sentenced by U.S. District Court Judge Rya W. Zobel to time served and three years of supervised release, three months of which is to be served in home confinement. In February 2018, Desper pleaded guilty to four counts of wire fraud and attempted wire fraud. In May 2017, Desper was arrested in West Virginia and charged in a criminal complaint.
Desper, acting under the pseudonym “Mordokwan,” solicited foreign buyers on Craigslist for both the Rembrandt’s Storm on the Sea of Galilee and Vermeer’s The Concert, two paintings that were stolen from the Isabella Steward Gardner Museum in 1990. Desper directed interested buyers to create an encrypted email account to communicate with him. Authorities were notified of the foreign Craigslist notices by individuals seeking to assist in the recovery of the artwork, as well as those seeking the multi-million dollar reward offered by the Museum.
At the direction of federal authorities, the security director for the Gardner Museum engaged in encrypted communications with Desper in an attempt to determine whether Desper had access to the stolen masterpieces. Desper instructed the security director to send a cashier’s check for $5 million to a location in West Virginia and that the Storm on the Sea of Galilee would then be sent in return, concealed behind another painting. The investigation ultimately revealed that Desper had no access to, nor information about, the stolen paintings, but was instead engaged in a multi-million dollar fraud scheme targeting foreign art buyers.
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. Assistance was provided the Isabella Stewart Gardner Museum, the U.S. Attorney’s Office for the Southern District of West Virginia, the FBI Pittsburgh Field Division and the Beckley Police Department. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Criminal Division prosecuted the case.
West Palm Beach Return Preparer Sentenced to over 5 Years in Prison and Ordered to Pay More Than Half a Million for Filing False Tax Returns with the IRSRead the Press Release
Today, Manuel Antonio Severino, a West Palm Beach tax preparer, was sentenced to over 5 years in prison and ordered to pay $524,556 in restitution, after having been convicted at trial of filing false tax returns with the IRS.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Severino, 44, of West Palm Beach, was sentenced to 65 months in prison, 3 years of supervised release (to include 6 months of home confinement), and ordered to pay $524,556 in restitution, by Senior U.S. District Judge Paul C. Huck. Additionally, while on supervised release the defendant is ordered to complete community service - 1,000 hours a year if unemployed and 300 hours a year if employed. On February 23, 2018, a jury found Severino guilty of thirteen counts of aiding and assisting in the preparation of false tax returns, in violation of Title 26, United States Code, Section 7206(2); two counts of wire fraud, in violation of Title 18, United States Code, Section 1343; and two counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to the evidence presented at trial, Severino operated a purported tax preparation business from his home in West Palm Beach. He unjustly enriched himself and others by submitting individual tax returns to the IRS on behalf of other individuals claiming false and fraudulent credits and deductions. Severino falsely reported that the taxpayers were entitled to receive a tax credit under the American Opportunity Credit, when the defendant knew that the taxpayers did not have qualified education expenses and were not entitled to receive this credit. Without his clients’ knowledge or consent, Severino diverted portions of his clients’ tax refunds to bank accounts that he controlled. Over the three years that Severino engaged in this fraudulent tax return business, he sought over $1.6 million in refunds from the IRS on behalf of himself and his clients, and diverted tens of thousands of dollars of IRS tax refunds into his own bank accounts.
Mr. Greenberg commended the investigative efforts of IRS-CI. This case was prosecuted by Assistant U.S. Attorneys Daniel J. Marcet and Lisa H. Miller.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Waterbury Man Charged with Child Pornography OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in New Haven has returned an indictment charging YEHUDI MANZANO, 33, of Waterbury, with production and transportation of child pornography.
As alleged in the indictment, on or about August 21, 2016, MANZANO sexually assaulted a 15-year-old female victim in Connecticut, video recorded the assault with his cell phone, and uploaded the video to his Google account.
The indictment was returned on May 3, 2018, and was unsealed yesterday when MANZANO surrendered to authorities. MANZANO appeared before U.S. Magistrate Judge William I. Garfinkel in Bridgeport yesterday afternoon and entered a plea of not guilty to the charges. He was released on a $300,000 bond and electronic GPS monitoring.
On November 10, 2016, MANZANO was arrested on related state charges.
The charge of production of child pornography carries a mandatory minimum term of imprisonment of 15 years and a maximum term of imprisonment of 30 years, and the charge of transportation of child pornography carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 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 matter is being investigated by the Federal Bureau of Investigation and the Waterbury Police Department. The case is being prosecuted by Assistant U.S. Attorney Neeraj N. Patel.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Wasilla Teen Sentenced for Providing Marijuana to MinorsRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that Devin Lee Peterson, 19, resident of Wasilla, Alaska, was sentenced yesterday by U.S. District Judge Ralph R. Beistline to three years in prison, to be followed by four years of supervised release, for distribution of marijuana to minors.
The federal sentence will be consecutive to a pending state sentence of six-years to be imposed for Petersons’ role in obstructing the investigation into David Grunwald’s murder in November 2016, and his tampering of evidence from that case.
On the night of Nov. 13, 2016, four men assaulted and murdered David Grunwald in a secluded area near the Knik River off Old Glenn Highway. Following the murder, the men drove to Peterson’s house. Once there, Peterson took possession of the weapons used to assault and murder David Grunwald, and provided gas cans to the group that they used to burn Grunwald’s vehicle.
Alaska State Troopers subsequently obtained a search warrant to search Peterson’s phone. During this examination, Troopers located a photograph of a 16-year-old female performing oral sex on Peterson. In a subsequent examination, Troopers located a 10-second video showing the sexual assault of an incapacitated 15-year-old girl. This video was taken at a party attended by Peterson and others in July 2016. During the party, Peterson gave the girl marijuana, contributing to her extreme intoxication and subsequent assault.
At sentencing, Judge Beistline addressed Peterson’s role in the 15-year-old girl’s sexual assault, as well as his crimes in the Grunwald case. “You’ve done great damage to the community,” said Judge Beistline. Addressing Peterson’s criminal acts to that point in his young life, and his prospects going forward, Judge Beistline said, “You can’t ever pay back the families of these people you’ve injured, but you can demonstrate that you can be a better person than you have been in the past,” commented Judge Beistline. Judge Beistline warned Peterson in no uncertain terms about the consequences of failing to change his ways, “You mess up again its pretty much over…no one is going to be thinking about mercy.”
The Alaska State Troopers (AST) conducted the investigation leading to the successful prosecution of this case. This case was prosecuted by Assistant U.S. Attorney Kyle Reardon.
United States Intervenes in False Claims Act Lawsuits Accusing Insys Therapeutics of Paying Kickbacks and Engaging in Other Unlawful Practices to Promote Subsys, A Powerful Opioid PainkillerRead the Press Release
On April 13, 2018, the United States intervened in five lawsuits accusing Insys Therapeutics Inc., of violating the False Claims Act in connection with the marketing of Subsys, an opioid painkiller manufactured and sold by Insys, the Department of Justice announced today. Subsys is a sublingual spray form of fentanyl, a powerful, but highly addictive, opioid painkiller. In 2012, Subsys was approved by the Food and Drug Administration for the treatment of persistent breakthrough pain in adult cancer patients who are already receiving, and tolerant to, around-the-clock opioid therapy.
As stated in the complaint, which was unsealed today, the United States alleges that Insys, headquartered in Arizona, paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. Many of these kickbacks took the form of speaker program payments for speeches to physicians that were, in fact, shams; jobs for the prescribers’ relatives and friends; and lavish meals and entertainment. The United States also alleges that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and that Insys employees lied to insurers about patients’ diagnoses in order to obtain reimbursement for Subsys prescriptions that had been written for Medicare and TRICARE beneficiaries.
“Improper financial relationships between physicians and drug companies can distort a physicians’ best judgment for their patients, in addition to undermining patient health and trust. This is especially troubling when the drugs are opioids,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Lying to federal health programs about patients’ medical diagnoses is also completely unacceptable. The Justice Department will pursue these illegal actions and continue to hold drug companies and doctors accountable for their roles in contributing to this deadly epidemic.”
"Insys allegedly bribed doctors who are more concerned with profits than patients," said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. "Encouraging the inappropriate use of this too-often deadly opioid is intolerable enough, but the abuse is compounded when taxpayers are forced to pick up the bill."
"I applaud the Civil Division and the U.S. Attorney for their untiring efforts to hold health care providers accountable to the American taxpayer," said Vice Adm. Raquel Bono, director of the Defense Health Agency. "The Department of Justice's efforts safeguard the health care benefit for American service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate those who participate in fraudulent practices."
“Our intervention in these cases is just one part of the Justice Department’s multi-pronged efforts to combat the opioid crisis,” said United States Attorney Nicola T. Hanna. “The illegal marketing activities alleged in the government’s case helped fuel the crisis by improperly introducing opioids into the market. We are committed to hold accountable corporations and individuals who use kickbacks, off-label promotions and other illegal activities to sell lethal and highly addictive narcotics. Our goal is bring about an end to the tragic epidemic that is harming untold numbers of people across the United States.”
The qui tam provisions of the False Claims Act allow whistleblowers to file lawsuits on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery. The United States has the right to intervene and take over responsibility for litigating these cases. Here, the United States has intervened in five separate lawsuits that have been consolidated together in the Central District of California. They are: United States, et al., ex rel. Guzman v. Insys Therapeutics, Inc., et al., 13-cv-5861; United States ex rel. Andersson v. Insys Therapeutics, Inc., 14-cv-9179; United States ex rel. John Doe and ABC, LLC v. Insys Therapeutics, Inc., et al., 14-cv-3488; United States ex rel. Erickson and Lueken v. Insys Therapeutics, Inc., 16-cv-2956; and United States ex rel. Jane Doe, et al. v. Insys Therapeutics, et al., 16-cv-7937.
The United States has separately pursued a number of criminal cases against Insys employees and Subsys prescribers. Some of these cases have resulted in criminal convictions or guilty pleas, while others are currently pending.
These cases are being handled by the Justice Department’s Civil Division, the United States Attorney’s Office for the Central District of California, the Office of Inspector General of the Department of Health and Human Services, and the Defense Health Agency. The claims asserted against Insys are allegations only, and there has been no determination of liability.
United States Attorney Peter E. Deegan, Jr. Recognizes Police Week and Thanks All Law Enforcement Officers Serving Iowa CommunitiesRead the Press Release
Each day, thousands of law enforcement officers serve the public across the state of Iowa. These officers stand on the front lines in our communities. Every time an officer goes on duty, that officer accepts a measure of personal risk that few in our society face in their everyday jobs. They do so in order to continue the fight against violent crime. They do so in order to combat the dangers of the opioid epidemic. But these officers also risk their lives in ways that are often too easily taken for granted. They patrol our neighborhoods to safeguard our families and our property. They protect our schools. They investigate crimes from theft to murder. They assist those who have lost their way and they provide help to those in need.
How often do we stop and think about the dedication and courage that it takes for an officer to perform even seemingly routine duties – like conducting a traffic stop on a busy highway after dark? The vast majority of law enforcement officers accept these risks - not for personal reward or recognition – but simply wanting to serve their communities well. And when they do so, they are doing far more than their fair share to help establish and maintain a safe and just society. For this, every one of us owes a debt of gratitude.
Toward that end, in 1962, President John F. Kennedy signed a proclamation designating May 15 as Peace Officers Memorial Day and the week surrounding as Police Week. This year, Police Week runs from May 13 to May 19. During this week especially, the United States Attorney’s Office for the Northern District of Iowa wishes to recognize and thank each and every federal, state, and local law enforcement officer in Iowa for making so many sacrifices to keep us safe.
It is also important to recognize and thank our law enforcement officers’ families for the sacrifices they make every day. For every officer putting his or her life on the line, there are people back home, worried for their loved one’s safety. Without the strength and dedication of their families, these officers would not be able to do what they do each day to protect us and our families. And for the families of those officers who have given their lives in the line of duty, there is little that words can do to ease the suffering of their loss. But we can pledge to honor their loved ones by cherishing the freedoms we enjoy.
The United States Attorney’s Office is dedicated to supporting our law enforcement partners at every level. We do this, first and foremost, through a commitment to our common goal of enhancing public safety. Through our Project Safe Neighborhoods program, we work together to take dangerous criminals and guns off our streets. Through our Heroin Initiative, we work together to attack the opioid crisis through enforcement and community outreach.
This Police Week, we are asking the public to join us in saying “thank you” to our friends in law enforcement. We can do this by taking any opportunity to make their jobs just a little easier. We can also say “thank you” by taking the time to share a story about a friendly interaction with an officer, or about a time when we were in need and it was an officer who was there to help. Finally, we can simply and sincerely say “thank you” to the next officer we see.
To our friends on the force, the United States Attorney’s Office thanks you for your service.
Follow us on Twitter @USAO_NDIA.
U.S. Intervenes in ‘Whistleblower’ Lawsuits Alleging Insys Therapeutics Paid Illegal Kickbacks to Promote SubsysRead the Press Release
LOS ANGELES – The United States has intervened in five “whistleblower” lawsuits that accuse Insys Therapeutics, Inc. of paying illegal kickbacks and defrauding federal health programs in connection with the marketing of Subsys, an opioid painkiller manufactured and sold by the Arizona-based company, the Department of Justice announced today.
The five cases brought pursuant to the False Claims Act were ordered unsealed late last week, as was the government’s complaint in intervention. The government learned the cases had been unsealed Monday afternoon.
The cases allege illegal marketing tactics related to Subsys, a sublingual spray form of fentanyl, a highly addictive opioid painkiller. In 2012, Subsys was approved by the Food and Drug Administration for the treatment of persistent breakthrough pain in adult cancer patients who are already receiving, and tolerant to, around-the-clock opioid therapy.
The government’s complaint alleges that Insys paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. Many of these kickbacks allegedly took the form of sham speaker fees to physicians, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment.
The United States also alleges that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and that Insys employees lied to insurers about patients’ diagnoses in order to obtain reimbursement for Subsys prescriptions that had been written for Medicare and TRICARE beneficiaries.
“Our intervention in these cases is just one part of the Justice Department’s multi-pronged efforts to combat the opioid crisis,” said United States Attorney Nicola T. Hanna. “The illegal marketing activities alleged in the government’s case helped fuel the crisis by improperly introducing opioids into the market. We are committed to hold accountable opioid manufacturers who use kickbacks, off-label promotions and other illegal activities to sell lethal and highly addictive narcotics. Our goal is to bring about an end to the tragic epidemic that is harming untold numbers of people across the United States.”
“Improper financial relationships between physicians and drug companies can distort a physicians’ best judgment for their patients, in addition to undermining patient health and trust. This is especially troubling when the drugs are opioids,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Lying to federal health programs about patients’ medical diagnoses is also completely unacceptable. The Justice Department will pursue these illegal actions and continue to hold drug companies and doctors accountable for their roles in contributing to this deadly epidemic.”
“Insys allegedly bribed doctors who are more concerned with profits than patients,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Encouraging the inappropriate use of this too-often deadly opioid is intolerable enough, but the abuse is compounded when taxpayers are forced to pick up the bill.”
“I applaud the Civil Division and the U.S. Attorney for their untiring efforts to hold health care providers accountable to the American taxpayer,” said Vice Adm. Raquel Bono, director of the Defense Health Agency. “The Department of Justice's efforts safeguard the health care benefit for American service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate those who participate in fraudulent practices.”
The qui tam provisions of the False Claims Act allow whistleblowers to file lawsuits on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery.
The United States has the right to intervene and take over responsibility for litigating these cases. Here, the United States has intervened in five separate lawsuits that have been consolidated in United States District Court in Los Angeles.
The civil claims asserted against Insys are allegations only, and there has been no determination of liability.
The United States has separately pursued a number of criminal cases against Insys employees and Subsys prescribers.
The cases announced today are being handled by the United States Attorney’s Office for the Central District of California, the Justice Department’s Civil Division, the Office of Inspector General of the Department of Health and Human Services, and the Defense Health Agency.
U.S. Attorney’s Office Honors Commitment of Law Enforcement During Ceremonies Commemorating National Police WeekRead the Press Release
WASHINGTON – U.S. Attorney Jessie K. Liu is joining Principal Assistant U.S. Attorney Alessio D. Evangelista and other leaders of the U.S. Attorney’s Office for the District of Columbia in commemorating National Police Week by attending various events in honor of the sacrifice and contributions made by law enforcement officers here and across the nation.
The week honors the law enforcement community with special recognition of those who have been killed or disabled in the line of duty. In 1962, Congress created National Police Week and designated May 15th as National Peace Officers Memorial Day. Attorney General Jeff Sessions will be among officials attending today's 37th Annual National Peace Officers’ Memorial Service at the United States Capitol, one of the largest gatherings of the week.
On May 13, 2018, U.S. Attorney Liu attended the 30th Annual Candlelight Vigil on the National Mall, in honor of fallen officers. Attorney General Sessions spoke at the event. Earlier, she attended a memorial service on May 8, 2018, at the U.S. Capitol honoring four United States Capitol Police officers who have died over the years in the line of duty. This year’s ceremony was especially poignant, with speakers recalling the heroism of Officer Jacob J. Chestnut and Detective John M. Gibson, who died 20 years ago while protecting the U.S. Capitol from a gunman’s attack. U.S. Attorney Liu and Principal Assistant U.S. Attorney Evangelista also attended the 24th Annual Blue Mass on May 1, 2018 at Saint Patrick’s Catholic Church.
“National Police Week is a time to reflect on the courage and commitment shown by law enforcement officers here in the District of Columbia and across the nation,” said U.S. Attorney Liu. “The citizens of the District of Columbia are especially fortunate to be kept safe by thousands of dedicated men and women from a wide array of federal and District of Columbia law enforcement agencies. Their devotion to duty comes at great risk and sacrifice. The ceremonies this week give all of us an opportunity to remember those who died serving their communities and a chance to thank those who work around the clock to protect us. ”
This year, National Police Week is observed from Sunday, May 13 to Saturday, May 19, 2018.
“One officer death is too many,” Attorney General Sessions said. “While we are inexpressibly grateful to have had a decrease in the number of officers killed in the line-of-duty last year, the number is still far too high. At the Department of Justice, we honor the memories of the fallen and we pray for their families. We are also following President Trump's Executive Orders to back the women and men in blue, to enhance law enforcement safety, and to reduce violent crime in America. Those priorities will help keep every American safe, including those who risk their lives for us. As always, we have their backs and they have our thanks.”
According to statistics collected by the FBI, 93 law enforcement officers were killed in line-of-duty incidents in 2017 – a 21 percent decrease from 2016 when 118 law enforcement officers were killed in line-of-duty incidents.
Additionally, in 2017 there were 46 law enforcement officers killed in line-of-duty incidents as a result of felonious acts – this is a 30 percent decrease from 2016, when 66 law enforcement officer were killed in line-of-duty incidents as a result of felonious acts.
For the full comprehensive data tables about these incidents and brief narratives describing the fatal attacks and selected assaults resulting in injury, please see the newly released 2017 edition of Law Enforcement Officers Killed and Assaulted. To access the FBI's 2017 Law Enforcement Officers Killed and Assaulted report, please visit www.fbi.gov.
The names of all 93 fallen officers nationwide were formally dedicated on the National Law Enforcement Officers Memorial in Washington, DC, during the 30th Annual Candlelight Vigil on the evening of May 13, 2018.
For more information about other National Police Week events, please visit www.policeweek.org.
U.S. Attorney's Office Joins in Recognizing National Police Week, May 13-19, 2018Read the Press Release
PORTLAND, Ore. – Attorney General Jeff Sessions and Billy J. Williams, U.S. Attorney for the District of Oregon, recognize the service and sacrifice of federal, state, local, and tribal police officers on the occasion of National Police Week, and commented on the FBI's 2017 Law Enforcement Officers Killed and Assaulted report.
“One officer death is too many,” Attorney General Sessions said. “While we are inexpressibly grateful to have had a decrease in the number of officers killed in the line-of-duty last year, the number is still far too high. At the Department of Justice, we honor the memories of the fallen and we pray for their families. We are also following President Trump's Executive Orders to back the women and men in blue, to enhance law enforcement safety, and to reduce violent crime in America. Those priorities will help keep every American safe, including those who risk their lives for us. As always, we have their backs and they have our thanks.”
“Working with federal, state, local, and tribal law enforcement officers in Oregon is a distinct honor and one of the highlights of my job,” said Billy J. Williams, U.S. Attorney for the District of Oregon. “During National Police Week, we honor the 93 men and women who lost their lives protecting their communities as well as the countless others who continue to serve with unfailing dedication and an unwavering commitment to excellence. Supporting police and fostering strong relationships between our communities and law enforcement is top priority for the U.S. Attorney’s Office.”
According to statistics collected by the FBI, 93 law enforcement officers were killed in line-of-duty incidents in 2017 – a 21 percent decrease from 2016 when 118 law enforcement officers were killed in line-of-duty incidents.
Additionally, in 2017 there were 46 law enforcement officers killed in line-of-duty incidents as a result of felonious acts – this is a 30 percent decrease from 2016, when 66 law enforcement officer were killed in line-of-duty incidents as a result of felonious acts.
For the full comprehensive data tables about these incidents and brief narratives describing the fatal attacks and selected assaults resulting in injury, please see the 2017 edition of Law Enforcement Officers Killed and Assaulted report, released today.
In October 1962, Congress passed and President Kennedy signed a joint resolution declaring May 15th as National Peace Officers Memorial Day to honor law enforcement officers killed or disabled in the line of duty. The resolution also created National Police Week as an annual tribute to law enforcement service and sacrifice.
During Police Week, which is observed from Sunday, May 13 to Saturday, May 19, 2018, our nation celebrates the contributions of police officers from around the country, recognizing their hard work, dedication, loyalty and commitment in keeping our communities safe.
The names of all 93 fallen officers nationwide were formally dedicated on the National Law Enforcement Officers Memorial in Washington, DC, during the 30th Annual Candlelight Vigil on the evening of May 13, 2018. One District of Oregon officer was added this year: John Edward Lawrence, City of Bend Police Department, End of Watch: December 4, 2014.
The Candlelight Vigil is one of many commemorative events taking place in the nation’s capital during National Police Week 2018.
For more information about other National Police Week events, please visit www.policeweek.org.
To access the FBI's 2017 Law Enforcement Officers Killed and Assaulted report, please visit www.fbi.gov.
U.S. Attorney Attends Investiture of U.S. Magistrate JudgeRead the Press Release
Rapid City, SD – On May 11, 2018, United States Attorney Ron Parsons attended the Investiture of United States Magistrate Judge Daneta Wollmann. Judge Wollmann is the first person to serve in the newly created full-time federal magistrate position in the Western Division of the District of South Dakota.
The ceremony, held at the Andrew W. Bogue Federal Building and United States Courthouse in Rapid City, opened with celebratory music before the Hon. Jeffrey L. Viken, Chief Judge, welcomed the attendees with some opening remarks. Additional remarks were presented by the Hon. Karen E. Schreier, United States District Judge. Chief Judge Viken then administered the oath of office. The ceremony concluded with comments from Judge Wollmann.
Judge Wollmann was appointed by the United States District Court to serve an eight-year term of office effective April 1, 2018. She had been serving as a part-time magistrate judge since March 2015. She is a graduate of Purdue University and the University of South Dakota School of Law.
Two Nashville Men Receive Lengthy Prison Sentences for Violent Crime and Drug OffensesRead the Press Release
NASHVILLE, Tenn. – May 15, 2018 – Two Nashville, Tennessee men have been sentenced in U.S. District Court to more than 20 years in prison for committing crimes involving drugs and violence, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
Michael D. Bright, aka Groove, 27, was sentenced on May 11, 2018, to 23 years in prison, for his involvement in two armed robberies of Nashville businesses. Yesterday, Emmanuel Thirkill, aka Hot Boy, 36, was sentenced to 21 years and 10 months in prison on firearms and drug offenses.
According to court documents, Michael Bright was one of four participants in the armed robbery of the Express Market, located at 2408 Antioch Pike in Nashville, on June 3, 2015. During that robbery, Bright acted as the driver while the other participants, Dominique Cordell Wallace, aka DeuceFace, Robert Dewayne Brooks, aka YG, and Demontay Thomas entered the store with guns. Thomas crawled under the counter while Brooks was climbing over the counter. Brooks became startled by Thomas and began firing his pistol, striking Thomas and killing him. Wallace then shot a clerk in the head before fleeing the store with Brooks and Bright.
On June 21, 2015, Bright again participated in an armed robbery of the Jack in the Box, located at 622 McGavock Pike in Nashville. During this robbery, Bright and Corin Porter forced several female employees at gunpoint, into the office area and took money from the safe, while threatening them with the firearms. Michael Wilson acted as the driver for this robbery.
Bright pleaded guilty on December 12, 2017. All other defendants have also pleaded guilty and are awaiting sentencing.
In an unrelated case, Emmanuel Thirkill, aka Hot Boy, 36, was sentenced yesterday to 21 years and 10 months in prison on firearms and drug offenses.
Court documents reflect that beginning in May 2016, after being released from prison, Thirkill began selling cocaine in the Tony Sudekem Public Housing Development on a daily basis. Thirkill became the subject of a criminal investigation by the Metropolitan Nashville Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives as part of a concerted effort to reduce crime in the city’s public housing areas.
The investigation determined that Thirkill was receiving a supply of cocaine on a weekly basis, which he stored in his Antioch home located near Thomas Edison Elementary School. On December 6, 2016, Metro Nashville police officers attempted to stop Thirkill as he was leaving his home, but Thirkill fled and temporarily escaped capture. A search warrant was subsequently obtained and executed at Thirkill’s home and officers found five ounces of cocaine, $15,000 cash and a loaded Glock 9mm pistol, which was determined to have been stolen during a home burglary in Sumner County, Tennessee in 2013. Metro Police located and arrested Thirkill the following day at a hotel in West Nashville.
Thirkill pleaded guilty to these offenses on October 23, 2017.
Thirkill has four prior felony convictions in state court, since 2001, for trafficking cocaine; two prior felony convictions for being a convicted felon in possession of a firearm; and a conviction for attempted reckless aggravated assault.
These investigations were conducted by the Metropolitan Nashville Police Department’s Gang Division and the ATF. Assistant U.S. Attorneys Sunny A.M. Koshy and Philip H. Wehby prosecuted the cases.
Two Local Men Head to the Pen for Possessing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – Two residents of Corpus Christi have been ordered to federal prison following their respective convictions of possession of child pornography, announced U.S. Attorney Ryan K. Patrick.
Rogelio Castaneda, 61, and Jose Ivan Davila, 54, pleaded guilty Jan. 23, 2018, in separate, but similar cases.
Today, Senior U.S. District Judge John D. Rainey sentenced Castaneda to 121 months in prison. Davila received a 70-month term of imprisonment. Both men were further ordered to serve 10 years of supervised release following completion of the prison terms, during which time they will have to comply with numerous requirements designed to restrict access to children and the internet. They will also be ordered to register as sex offenders.
In imposing Castaneda’s sentencing, Judge Rainey noted that it was “disturbing” that he was a repeat offender.
The investigation into Castaneda began after authorities discovered he had uploaded images of child pornography to his email accounts. Law enforcement learned Castaneda had a prior conviction related to child pornography and, as such, is required to register as a sex offender. However, he had failed to do so and was taken into custody in February 2017. Law enforcement seized several digital devices at the time of his arrest which led to the discovery of approximately 2,500 images and 700 videos of child pornography. At the time of his arrest, Castaneda admitted to having an interest in adolescent girls.
In Davila’s case, authorities were investing a file sharing program in February 2017, during which they identified a computer as a potential source of at least 41 files of known images of child pornography. That computer was later linked to Davila.
The next month, law enforcement executed a search warrant at his residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 296 images and approximately 260 videos child pornography. Two of those videos included images of young girls, approximately nine and 11 years of age, performing oral sex on an adult male.
Both men have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted both investigations with the assistance of the Corpus Christi Police Department - Internet Crimes Against Children Task Force.
Assistant U.S. Attorney Hugo R. Martinez prosecuted the cases, which were brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Two Delaware Residents Charged with Sex Trafficking of MinorsRead the Press Release
Dkyle Jamal Bridges, 32, and Kristian Jones, 24, both of Claymont, Delaware, have been charged with multiple counts of sex trafficking of minors in an indictment unsealed May 11, announced United States Attorney William M. McSwain.
Specifically, the defendants are charged with conspiracy to engage in forcible sex trafficking of minors, two counts of forcible sex trafficking, and three counts of forcible sex trafficking of minors. According to the indictment, Bridges and Jones committed the various sex trafficking offenses between 2012 and 2017.
“The indictment alleges that the defendants and their associates operated a violent sex-trafficking enterprise in which women and several minor children were sold for commercial sex,” said U.S. Attorney McSwain. “Stopping human exploitation, and particularly child exploitation, is a priority for the Department of Justice, and we are working very hard with our law enforcement partners to find and prosecute all such offenders. In this case, we worked with the FBI and local police in both Pennsylvania and Delaware. That’s what it’s going to take to stop the unconscionable exploitation of these young victims.”
If convicted as charged, each defendant faces a maximum possible sentence of 1life imprisonment, a mandatory minimum term of fifteen years’ imprisonment, supervised release for a minimum term of five years and a lifetime maximum term, a $1,500,000 dollar fine, mandatory restitution, and a maximum $30,600 special assessment.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by the Federal Bureau of Investigation, the Philadelphia Police Department, the Tinicum Township Police Department, and the Newark (DE) Police Department. The case is being prosecuted by Assistant United States Attorney Seth Schlessinger.
Treatment Center Owners Sentenced to Prison for Multi-Million Dollar Health Care Fraud and Money Laundering Scheme Involving Sober Homes and Alcohol and Drug Addiction Treatment CentersRead the Press Release
Two treatment center owners were sentenced to prison for their participation in a multi-million dollar health care fraud and money laundering scheme that involved the filing of fraudulent insurance claim forms and defrauded health care benefit programs.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida; Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI); Jimmy Patronis, Florida Chief Financial Officer; Michael J. Waters, Special Agent in Charge, Amtrak Office of Inspector General (Amtrak-OIG); Isabel Colon, Regional Director, United States Department of Labor, Employee Benefits Security Administration (DOL-EBSA); and Dennis Russo, Director of Operations, National Insurance Crime Bureau (NICB), made the announcement.
Tovah Lynn Jasperson, a/k/a Tara, 48, of Wellington, was sentenced to 78 months in prison, to be followed by 3 years of supervised release. Alan Martin Bostom, 75, of Wellington, was sentenced to 30 months in prison, to be followed by 3 years of supervised release. Both were also ordered to pay restitution of $4,045,364.98. Jasperson previously pled guilty to one count of conspiracy to commit health care fraud, in violation of Title 18, United States Code, Section 1347; all in violation of Title 18, United States Code, Section 1349. Bostom previously pled guilty to one count of making false statements related to a health care matter, in violation of Title 18, United States Code, Section 1035(a)(1).
According to court documents, Jasperson and Bostom were the owners of Angel’s Recovery, a business with multiple locations in Palm Beach County that purportedly operated as a licensed substance abuse service provider (or treatment center) offering clinical treatment services for persons suffering from alcohol and drug addiction. Angel’s Recovery also offered medication-based treatment for opioid addiction.
At different times, the defendants managed all aspects of Angel’s Recovery, including hiring and firing personnel, admitting and discharging patients, and making financial decisions. To secure a steady stream of patients, the defendants established illegal kickback/bribe relationships with owners of sober homes, in exchange for referring the sober homes’ insured residents to Angel’s Recovery for treatment. Sober homes were purportedly in the business of providing safe and drug-free residences for individuals suffering from drug and alcohol addiction. The defendants provided the money used to purchase or rent several properties used as “sober homes,” although the purchase agreements or leases would bear the names of third parties.
The defendants and co-conspirators provided kickbacks and bribes, in the form of free or reduced rent, insurance premium payments, and other benefits to individuals with insurance who agreed to reside at the sober homes and attend drug treatment, which included regular and random drug testing (typically three or more times per week), so that members of the conspiracy could bill the testing and treatment to the residents’ insurance plans. To disguise kickbacks and bribes to patients, the defendants used a separate entity to pay insurance premiums for patients of Angel’s Recovery so that Angel’s Recovery could continue to bill the patients’ insurance companies for treatment expenses.
Jasperson and Bostom hired a doctor to serve as the medical director of Angel’s Recovery who frequently pre-signed prescriptions that were used to dispense controlled substances to patients of Angel’s Recovery by other employees. After the doctor’s medical license was suspended, the defendants continued to employ him and failed to inform the Florida Department of Children and Families because it could not continue to operate as a licensed facility without a licensed medical director.
The defendants and co-conspirators caused the submission of insurance claims that: falsely stated the testing and treatment were medically necessary, failed to disclose that patients were referred to Angel’s Recovery in exchange for kickbacks and bribes, failed to disclose that patients were not asked to pay kickbacks and deductibles, failed to disclose that the defendants paid some patients’ insurance premiums, and failed to disclose that the prescribing physician’s license was suspended.
Mr. Greenberg commended the investigative efforts of the Greater Palm Beach Health Care Fraud Task Force. Agencies of the task force include the FBI, IRS-CI, the Florida Division of Investigative and Forensic Services, Amtrak-OIG, DOL-EBSA, and NICB. This matter and related cases are being prosecuted by Assistant United States Attorneys A. Marie Villafaña and Alexandra Chase.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Three Men Charged in Scheme to Purchase Firearms in Kentucky and Illegally Re-Sell Them in Chicago AreaRead the Press Release
CHICAGO — Three men have been charged with federal firearms violations for scheming to purchase dozens of guns in Kentucky and illegally re-sell them in the Chicago area.
On several occasions in 2016 and 2017, CHRISTOPHER HENDERSON and JOHN L. PHILLIPS purchased firearms from private sellers in Kentucky and brought them to the Chicago area, according to a criminal complaint and affidavit filed in federal court in Chicago. The pair then worked with JAIQAIL WRIGHT to re-sell the guns to buyers in Chicago and the surrounding suburbs, the charges allege. Many of the guns were recovered by law enforcement during criminal investigations, the complaint states. Authorities estimate that 80 to 90 firearms recovered by law enforcement in the Chicago area are associated with the defendants’ firearms trafficking.
All three defendants were arrested last week. The complaint charges Henderson, 23, of Louisville, Ky., Phillips, 23, of Hillside, and Wright, 23, of Chicago, with dealing firearms without a license. Phillips, who was previously convicted of a firearm-related felony, also faces a charge of illegal possession of a firearm by a felon. Detention hearings are scheduled for May 17, 2018, at 11:00 a.m., before U.S. Magistrate Judge Maria Valdez.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. Valuable assistance was provided by the Louisville, Ky., ATF Field Division, Chicago Police Department, Illinois State Police, and the Chicago High Intensity Drug Trafficking Area (HIDTA).
According to the charges, Henderson and Phillips bought the guns in Kentucky from individuals they met on Armslist.com, a website dedicated to the sale or trade of firearms and firearm-related items, such as ammunition and gun parts. Using various names and email addresses, the pair contacted sellers on the website and arranged to meet them in Kentucky, the complaint states. After the purchases, Phillips and Henderson transported the guns to the Chicago area, where they worked with Wright to re-sell them, the charges allege.
Wright allegedly acted as a broker, using Facebook and other means to advertise the weapons. In one transaction described in the complaint, Wright brokered a deal to sell six handguns to a documented gang member. The complaint also describes a purchase by Henderson of a .45-caliber pistol on or about Dec. 23, 2016. The gun was recovered by law enforcement less than three months later while investigating a vehicular hijacking in the western suburbs, the complaint states.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Dealing firearms without a license is punishable by a maximum sentence of five years in prison. The felon-in-possession charge against Phillips carries a maximum sentence of ten years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Elizabeth Pozolo and Kalia Coleman.
Ten Individuals Charged for Conspiring to Traffic Contraband Through the Dallas/Ft. Worth International AirportRead the Press Release
DALLAS — A federal grand jury has returned an Indictment charging ten individuals for their role in conspiring to traffic contraband through Dallas Fort Worth International (DFW) Airport, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas, at a press conference today. The law enforcement operation was led by the Federal Bureau of Investigation, the Dallas Police Department, the Internal Revenue Service Criminal Investigation, and the Dallas Fort Worth International Airport Police Department.
The Indictment, returned last week and unsealed this morning, charges Nelson Pabon, 47, Jean Loui Vargas-Malave, 28, Juan Camacho Melendez, aka “Kendo Kaponi” and “Anthony,” 22, Ruben Benitez-Matienzo, 45, Jose Luis Gaston-Rolon, 24, Joshua Israel Pagan Zapata, 21, Domingo Villafane Martinez, III, 30, Luis Javier Collazo Rosado, aka “Luisito,” 21, Michael LNU, and Cristian David Cruz-Rodriguez, 23, with one count of conspiracy to possess with intent to distribute a schedule II controlled substance. The defendants were arrested yesterday and will make their initial appearances before a United States Magistrate Judge later this week.
“We have zero tolerance for employees who seek to undermine and evade the security protocols at airports,” said U.S. Attorney Erin Nealy Cox. “Smugglers are constantly seeking new ways to move illegal contraband across the country and we will do whatever necessary to thwart these criminals at every turn. Working together with federal and local law enforcement partners, we continue to prioritize efforts to help mitigate the insider threat to aviation security.”
According to the Indictment and beginning in August 2016, the defendants acquired a substance that they believed to be methamphetamine. They arranged for the transportation and delivery of the counterfeit drugs through the DFW Airport and onto commercial airline flights. The defendants utilized their position of employment with companies at DFW Airport to bypass security measures and in return, they accepted payment for the transportation and delivery of the counterfeit drugs. The defendants would also act as “look-outs” or engage in counter-surveillance to undermine police presence.
Also during the investigation, one of the defendants stated he could transport guns via commercial airlines. There were also discussions about transporting C-4 but the fees for transporting this type of contraband would be higher than what was charged for the smuggling of illegal narcotics. All told, the defendants facilitated the transportation of 66 kilograms of counterfeit drugs. The counterfeit drugs were transported to various locations throughout the United States, including Newark Liberty International Airport in Newark, New Jersey, Charlotte Douglas International Airport in Charlotte, North Carolina, and Sky Harbor Airport in Phoenix, Arizona.
“The FBI would like to thank its local and federal partners that assisted in this investigation. This joint operation allowed us to successfully arrest ten individuals who used their positions of employment and access to compromise an aspect of airport security,” said Eric K. Jackson, FBI Dallas Special Agent-In-Charge. “We at the FBI will continue to work diligently with our partners to ensure we aggressively investigate anyone who poses a threat to or attempts to compromise any aspect of U.S. aviation security.”
"DFW and the FBI have a strong partnership that is focused on keeping our customers and employees safe and secure, and these arrests demonstrate how well we work together,” said DFW Airport Police Chief Charles Cinquemani. “There will always be people who attempt to access the airport for illegal activities, but we will remain vigilant by investing in security and collaboratively sharing information and resources with the FBI, TSA, Customs and Border Protection and other federal, state and local agencies.”
A federal criminal Indictment is a written statement of the essential facts of the offense charged. A defendant is entitled to the presumption of innocence until proven guilty. If convicted, the defendants’ sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the violation.
Assistant U.S. Attorneys George Leal, John De La Garza and John Kull are prosecuting the case.
# # #
Taylor County Convicted Felon Pleads Guilty to Narcotics and Gun Charges Under Project Safe NeighborhoodsRead the Press Release
COLUMBUS: Charles E. Peeler, United States Attorney for the Middle District of Georgia, announces that on May 14, 2018, Andre Hendricks, aged 39, of Woodland, Georgia, entered a guilty plea to Possession with Intent to Distribute Cocaine Base and Possession of a Firearm by a Convicted Felon before Chief United States District Judge Clay D. Land in Columbus.
At his plea hearing, Mr. Hendricks admitted that he sold narcotics from his residence to a confidential informant on two occasions in December 2016. A subsequent search of his residence revealed nine (9) firearms, ammunition, crack cocaine, a quantity of pills containing methamphetamine, hydrocodone pills, powder cocaine, marijuana and drug paraphernalia.
Mr. Hendricks is prohibited from possessing a firearm after having been convicted of Possession of Cocaine with Intent to Distribute in Superior Court in Talbot County in 2003; Possession of Cocaine with Intent to Distribute Cocaine in Superior Court in Meriwether County in 2005; Possession of a Firearm by a Convicted Felon, Possession of Ecstasy and Possession of Cocaine in Muscogee County Superior Court in 2006; and Possession of a Firearm by a Convicted Felon in Talbot County Superior Court in 2009.
Mr. Hendricks faces a maximum penalty of forty (40) years imprisonment, a $5 million fine, or both, for the narcotics charge and a maximum of ten (10) years imprisonment, a $250,000 fine or both, on the firearms charge. His sentencing hearing will take place following a pre-sentence investigation. There is no parole in the federal system.
“Mr. Hendricks had both a virtual pharmacy and arsenal when arrested. His past record of drug and weapons possession charges, together with his current charges, make it clear that only incarceration will prevent the same conduct from him in the future. Fortunately, that is what he now faces,” said United States Attorney Peeler.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The case was investigated by the Taylor County Sheriff’s Office, the Georgia Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Crawford Seals is prosecuting the case for the United States.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Sumter Men Sentenced on Federal Firearm and Drug ChargesRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated that Brandon Leroid Cummings, age 28, and Brandon Christopher Craft, age 31, both of Sumter, were both sentenced today in federal court in Columbia by Chief United States District Judge Terry L. Wooten after pleading guilty earlier this year to various firearm and drug charges.
Cummings was sentenced to a total of 108 months imprisonment with 6 years of supervised release on charges of possession with intent to distribute and distribution of heroin and cocaine base (commonly known as “crack cocaine”) and conspiracy to use/carry/possess a firearm during a drug trafficking crime, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C) and Title 18, United States Code, Section 924(o).
Craft was sentenced to a total of 63 months imprisonment with 3 years of supervised release to follow on charges of felon in possession of a firearm and conspiracy to use/carry/possess a firearm during a drug trafficking crime, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(o).
Evidence presented in court during the guilty plea hearings established that May 17, 2017, Cummings distributed crack cocaine and four baggies of heroin to a confidential informant and undercover officer in exchange for $400. The transaction, which occurred in Sumter, was recorded on audio/video. Thereafter, on May 25, 2017, Cummings made arrangements to sell a firearm and heroin to the confidential informant in exchange for $800. When Cummings arrived to meet the confidential informant and the undercover officer, he was accompanied by Craft. Cummings provided the confidential informant what he said was heroin. Craft produced a Taurus .38 caliber revolver from a bag hidden in his waistband and gave it to the confidential informant. The investigation revealed that the firearm had been previously reported as stolen. Additionally, the heroin sold by Cummings on this occasion, while packaged like the previously sold heroin, was found to be cocaine during a laboratory analysis.
Cummings had prior state convictions for possession with distribution of marijuana, possession of crack cocaine (2 counts), and possession schedule I/schedule II controlled substance 2nd offense. Craft had prior state convictions for burglary 2nd degree (2 counts), possession of crack cocaine, possession of a firearm, assault and battery 2nd degree, and forgery (2 counts).
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and the Sumter County Sheriff’s Department and was prosecuted as part of Project CeaseFire, a joint federal, state and local initiative focused upon aggressively prosecuting firearm cases in an effort to reduce violent crime and make our neighborhoods safer. Project CeaseFire is South Carolina’s implementation of Project Safe Neighborhoods (PSN), a crime reduction strategy originally launched in 2001. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority and reinstituted PSN nationwide. Assistant United States Attorney Stacey D. Haynes of the Columbia office handled the case.
#####
Statement of United States Attorney Mike Stuart on the Appointment of Hank Dial as Chief of Police for the Huntington Police DepartmentRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart issued the following statement:
“I congratulate Hank Dial on the removal of the word “Interim” from his official title and his appointment as Chief of Police for the Huntington Police Department,” said United States Attorney Mike Stuart. “Hank has done an excellent job while serving as Interim Chief, and I expect nothing less from him and his Department moving forward. I look forward to our continued partnership and making Huntington the safest city in America. Mayor Steve Williams has placed the Huntington Police Department in good hands.”
Follow us on Twitter: SDWVNews
###
Statement of United States Attorney Mike Stuart on Passing of W. Warren Upton, former United States Attorney for the Southern District of West Virginia (1970 – 1972)Read the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart issued the following statement:
“It is a sad day for West Virginia and the Department of Justice family to learn about the passing of our esteemed colleague, W. Warren Upton. I offer prayers and condolences to his family and friends. Upton served as an Assistant United States Attorney in the Southern District of West Virginia from 1965 to 1970 before being appointed as Acting United States Attorney, and honorably served in that position from 1970 to 1972. I have the utmost respect and gratitude for his service to the United States and the Southern District of West Virginia.”
Follow us on Twitter: SDWVNews
###
Statement of U.S. Attorney John H. Durham in Recognition of National Police WeekRead the Press Release
In my 40-year career as a state and federal prosecutor, I have had the pleasure of working side by side with hundreds of federal, state and local law enforcement officers in the cause of justice. As a group, they are the finest people anyone could hope to know and work with. I have the greatest respect and admiration for these men and women, whose mission encompasses the most dangerous work undertaken in our communities.
A quote attributed to George Orwell reminds us of the debt we owe to members of law enforcement: “We sleep safe in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
In 1962, President Kennedy signed a proclamation designating today, May 15, as Peace Officers Memorial Day, and the week surrounding this date as National Police Week, to honor federal, state and municipal officers who made the ultimate sacrifice in the line of duty. So far this year, 53 brave men and women of law enforcement have lost their lives in service to the citizens of the United States. That figure includes Connecticut State Police Trooper First Class Kevin M. Miller, who was tragically killed in a vehicle crash on I-84 in Tolland on March 29.
Please take a moment today to remember them, and their families and loved ones who live with their loss.
I also encourage all to take some time this year to visit the Connecticut Law Enforcement Memorial, located at the Connecticut Police Academy in Meriden. The Memorial, which was dedicated in 1989, recognizes the sacrifice of 139 men and women of law enforcement who died in service to the people of Connecticut. This year, three more names will be added to the memorial, including Trooper Miller.
While most of us are fortunate to be able to live our lives freely without fear for our physical safety, too many of us take for granted that, in times of trouble, the police will be there to protect us from harm. For this, we owe a debt of gratitude to all officers, detectives, troopers and agents, who put themselves at risk every day for the safety of our communities, for our peace of mind, and for the security of our loved ones. It has been, and continues to be, my great honor to be able to work with all of them.
Statement from U.S. Attorney Bob Troyer in Support of National Police WeekRead the Press Release
“The partnerships among federal, state and local law enforcement in Colorado are unparalleled and set a gold standard of which we all can be proud,” said U.S. Attorney Bob Troyer. “The U.S. Attorney’s Office is truly thankful for everything Colorado Law Enforcement does to make this state such a great place to live.” National Police Week runs from May 13 through May 19. For information about National Police Week events, please visit www.policeweek.org.
Statement by U.S. Attorney Andrew E. Lelling Regarding Peace Officer’s Memorial DayRead the Press Release
BOSTON – Today marks the 55th anniversary of Peace Officer’s Memorial Day. It is the one day of the year when we are called upon to recognize those who preserve law and order, particularly those who have been injured in the line of duty or who have made the ultimate sacrifice to keep our communities safe. In truth, we should be keeping our peace officers – federal agents, state troopers, police officers, probation officers, corrections officers and others – in our daily thoughts and prayers.
Being a peace officer is neither easy nor without risk. The number of firearms-related law enforcement officer fatalities is up 56% in comparison to this time last year. This is a trend that we must stop, through aggressive enforcement and by encouraging respect for the law.
Our peace officers are also at a higher risk than ever of exposure to traumatic events, resulting in a steady increase in post-traumatic stress and suicidal behavior among those who keep us safe. I cannot over-emphasize the need for improved support, training and equipment for these brave men and women. The least we can do is give them the resources they need to do their jobs. While the federal government will do its part in this area, state and local government must also prioritize the safety and well-being of their officers. Local law enforcement agencies cannot bear this responsibility alone.
To the peace officers in this Commonwealth – today and every day – you have my deepest regard and admiration. The U.S. Attorney’s Office supports you, respects you and has the greatest appreciation for what you do. To the families and loved ones of those who have died or been injured in the line of duty, we remember, and we will not forget the sacrifices that have been made on our behalf.
Somerset County Man Possessed Sexual Images and Videos of Prepubescent MinorsRead the Press Release
JOHNSTOWN, Pa. – A Somerset County resident pleaded guilty in federal court in Johnstown to a charge of possession of child pornography, United States Attorney Scott W. Brady announced today.
Robert G. Landsbach, 36, of Stoystown, Pa., pleaded guilty before United States District Judge Kim R. Gibson.
In connection with the guilty plea, on October 5, 2016, Landsbach knowingly possessed pictures and videos in individual computer graphic files, which were produced using prepubescent minors engaging in sexually explicit conduct. The computer graphic files were shipped or transported in interstate or foreign commerce.
Judge Gibson scheduled sentencing for Oct. 1, 2018, at 1:30 p.m. The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
The Department of Homeland Security, Child Exploitation, the Pennsylvania Attorney General’s Office, and the Pennsylvania State Police, Somerset, conducted the investigation that led to the prosecution of Landsbach.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who sexually exploit children and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Roswell Felon Pleads Guilty to Unlawful Possession of Firearm and AmmunitionRead the Press Release
ALBUQUERQUE – Shane Mann, 30, of Roswell, N.M., pled guilty today in federal court in Las Cruces, N.M., to violating the federal firearms laws by being a felon in possession of a firearm and ammunition.
The Bureau of Alcohol, Tobacco, Firearms and Explosive arrested Mann in Feb. 2018, on a criminal complaint charging him with being a felon in possession of a firearm and ammunition on Aug. 9, 2017, in Chaves County, N.M. According to the complaint, law enforcement officers found multiple firearms and ammunition, and drug paraphernalia in Mann’s residence while executing a state search warrant. Mann was prohibited from possessing firearms or ammunition because of his prior felony convictions for shooting from a motor vehicle, aggravated fleeing a law enforcement officer, and possession of a controlled substance.
During today’s proceedings, Mann pled guilty to a felony information charging him with being a felon in possession of a firearm and ammunition. In entering the guilty plea, Mann admitted that on Aug. 9, 2017, law enforcement officers found firearms and ammunition in his residence, including a loaded handgun that was under a pillow in the bed in which Mann was laying, during the execution of the warrant. Mann acknowledged that he was prohibited from possessing firearms or ammunition because of his status as a convicted felon.
At sentencing, Mann faces a maximum penalty of ten years in federal prison. He remains in custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Roswell Police Department and the HIDTA Chaves County Metro Narcotics Task Force. The case is being prosecuted by Assistant U.S. Attorney Alfred J. Perez of the U.S. Attorney’s Las Cruces Branch Office.
The HIDTA Chaves County Metro Narcotics Task Force is comprised of investigators from the Roswell Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI and the Chaves County Sherriff’s Office. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Recidivist Securities Fraudster Edward Durante Sentenced to 18 Years in Prison for Securities Fraud, Money Laundering, and Perjury OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that EDWARD DURANTE, a/k/a “Ted Wise,” a/k/a “Efran Eisenberg,” a/k/a “Yulia,” a/k/a “Ed Simmons,” was sentenced today to 216 months in prison for defrauding at least 100 investors of more than $15 million. DURANTE was also sentenced for his perjurious testimony during an SEC deposition. DURANTE pled guilty on August 23, 2016, to conspiracy to commit securities fraud, securities fraud, money laundering, and perjury. DURANTE was sentenced today by United States District Judge Andrew L. Carter Jr.
U.S. Attorney Geoffrey S. Berman said: “The fraud scheme for which Edward Durante was sentenced today began while he was still in prison from a prior securities fraud conviction. Durante returned to what he knew best, lying to investors – many of whom were retirees who lost their life savings – about how their money would be used, and concealing his manipulation of the securities market. Edward Durante is now a twice-sentenced securities fraud felon.”
According to the allegations contained in the Indictment filed against DURANTE and his co-conspirators, and statements made in related court filings and proceedings:
2001 Securities Fraud Conviction
In December 2001, DURANTE was convicted in federal court of conspiracy to commit securities fraud, wire fraud, and money laundering, as well as making false statements in connection with a market manipulation scheme in which the defendant also used the alias “Ed Simmons.” The defendant was sentenced to 121 months in prison and was released in or about 2009, the year he began the current scheme. In connection with that scheme, DURANTE was ordered to pay disgorgement and prejudgment interest totaling over $39 million. DURANTE was also barred from certain activities in connection with the securities industry, including the sale of securities.
Private Placement Securities Fraud Involving VGTL
After being released from prison, between 2009 and in or about March 2015, DURANTE and his co-conspirators fraudulently induced victims to invest in private shares of VGTL by, among other things, concealing from investors that DURANTE controlled the entities selling the shares; that DURANTE was prohibited from any association with the sale of securities; and that DURANTE was previously convicted of crimes related to a similar scheme to defraud. Furthermore, DURANTE and certain of his co-conspirators lied to investors by (a) representing that their investments would be used to fund the operations and growth of VGTL in connection with potential reverse mergers, when in reality no reverse mergers were ever consummated and investor funds were instead used primarily to benefit the defendants personally; and (b) representing that the investors would receive an eight percent dividend on their investments until their private shares could be sold at a promised premium on the public market, when, in reality, no interest payments were ever provided to the investors and many investors never obtained VGTL stock certificates or the ability to sell the stock. In order to fund his illegal scheme, DURANTE used a network of brokers, including co-conspirators Larry Werbel and Abida Khan, investment advisers in Cleveland, Ohio, and Los Angeles, California, respectively, to induce investors to buy shares of VGTL.
Manipulation of the Market for Shares of VGTL
DURANTE also engaged in a scheme to control and manipulate the publicly traded stock of VGTL in order to artificially inflate the stock price and trading volume so as to profit from his own sales of VGTL stock and to further induce investments in private shares of VGTL. To that end, through entities he controlled, DURANTE held a majority of the publicly traded stock of VGTL. DURANTE recruited co-conspirator Christopher Cervino, a broker, to open brokerage accounts associated with DURANTE-controlled entities and investors who were clients of Werbel and Khan, many of whom did not know that brokerage accounts under their names had been opened with Cervino. Werbel and Khan, along with DURANTE, induced their clients to purchase VGTL stock through Cervino – sometimes without the clients’ knowledge or permission – while DURANTE and Cervino ensured that many of these purchases were matched with sales of VGTL stock by DURANTE-controlled accounts. The result of these transactions was that DURANTE and his co-conspirators were effectively taking both sides of a single transaction in VGTL stock in order to artificially control VGTL’s stock price. The efforts of DURANTE and his co-conspirators to artificially inflate the market for VGTL increased the stock price from approximately $.25 per share in April 2012 to as much as $1.90, and dramatically inflated the trading volume, which increased DURANTE’s ability to raise private investments in VGTL. To compensate Cervino for his efforts to control and manipulate the market in VGTL, DURANTE made at least two cash payments to Cervino totaling $35,000. Moreover, DURANTE then laundered proceeds from the scheme to accounts controlled by him and his co-conspirators, concealing the true nature of these transactions by utilizing wire transfers among multiple accounts in the names of other individuals.
* * *
In addition to the 18-year prison term, DURANTE, 64, was sentenced to three years of supervised release and ordered to forfeit $15,404,231.
Abida Khan and Christopher Cervino, each of whom was found guilty after trial of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and wire fraud, and – with respect to Khan only – aggravated identity theft and investment adviser fraud, were sentenced on January 18, 2018. Khan was sentenced to 53 months in prison; Cervino was sentenced to one year and one day in prison. Larry Werbel, who pled guilty to conspiracy to commit securities fraud and to investment adviser fraud, does not have a final date for sentencing. Walter Reissman, another co-conspirator, pled guilty to conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, wire fraud, and making false statements to federal officers. Co-conspirator Kenneth Wise pled guilty to conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, and money laundering. Reissman and Wise were sentenced, on February 23, 2018, and March 6, 2018, respectively, to time served.
Mr. Berman praised the work of the Federal Bureau of Investigation and the U.S. Postal Inspection Service, and thanked the Securities and Exchange Commission for its assistance. He added that the investigation is continuing.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Andrea M. Griswold and Rebecca Mermelstein are in charge of the prosecution.
Recidivist Defendant Pleads Guilty to Defrauding A Native American Tribe and Various Investors Through the Fraudulent Issuance and Sale of More Than $60 Million of Tribal BondsRead the Press Release
Robert Khuzami, Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced that GARY HIRST pled guilty today to defrauding a Native American tribal entity and various investment advisory clients of tens of millions of dollars in connection with the issuance of bonds by the tribal entity and the subsequent sale of those bonds through fraudulent and deceptive means. HIRST pled guilty to conspiracy to commit securities fraud, securities fraud, investment adviser fraud, and conspiracy to commit investment adviser fraud before U.S. Magistrate Judge Barbara Moses.
Mr. Khuzami said: “Today, Gary Hirst admitted that he and his co-conspirators placed tens of millions of dollars of Native American bonds with clients of an investment advisory firm, without telling those clients about numerous conflicts of interest surrounding the issuance and placement of the bonds. In addition, Hirst and his co-conspirators then misappropriated the bond proceeds, by failing to invest the money as promised and instead using it to finance their other business endeavors and to pay personal expenses. Now, thanks to the dedicated work of the U.S. Postal Inspection Service and the FBI, Hirst will have to answer for his crimes.”
According to the allegations contained in the Superseding Indictment filed against GARY HIRST and his co-conspirators and statements made in related court filings and proceedings[1]:
From March 2014 through April 2016, HIRST, along with his co-conspirators Jason Galanis, John Galanis, a/k/a “Yanni,” Hugh Dunkerley, Michelle Morton, Devon Archer, and Bevan Cooney, engaged in a fraudulent scheme to misappropriate the proceeds of bonds issued by the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity (the “Tribal Bonds”), and to use funds in the accounts of clients of asset management firms controlled by HIRST and others to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market.
The WLCC was convinced to issue the Tribal Bonds through false and fraudulent representations by John Galanis. Once the Tribal Bonds were issued, HIRST and Morton used funds belonging to clients of two related investment advisers, Hughes Capital Management, Inc. (“Hughes”) – where HIRST served as Chief Investment Officer – and Atlantic Asset Management, LLC (“Atlantic”), to purchase the Tribal Bonds, even though HIRST and Morton were well aware that material facts about the Tribal Bonds had been withheld from clients in whose accounts they were placed, including the fact that the Tribal Bond purchases fell outside of the investment parameters set forth in the investment advisory contracts of certain Hughes clients and of the Atlantic pooled investment vehicle in which the Tribal Bonds were purchased. In addition, HIRST and his co-defendants failed to apprise clients of Hughes and Atlantic regarding substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf.
Hughes and Atlantic clients were provided no prior notice that HIRST and Morton caused them to purchase the Tribal Bonds. When these clients learned about the purchase of the Tribal Bonds in their accounts, several of them demanded that the Tribal Bonds be sold. However, because there was no ready secondary market for the Tribal Bonds, no Tribal Bonds have been sold from any Hughes or Atlantic client accounts.
Documents governing the Tribal Bonds specified that an investment manager would invest the proceeds of the Tribal Bonds in investments that would generate annuity payments sufficient to pay interest on the Tribal Bonds and provide funds to the WLCC to be used for tribal economic development purposes. In fact, none of the proceeds of the Tribal Bonds were turned over to the investment manager specified in the closing documents. Instead, significant portions of the proceeds were misappropriated by the defendants for their personal and professional use.
Specifically, the proceeds of the Tribal Bonds were deposited into a bank account in the name of Wealth Assurance Private Client Corporation (“WAPCC”), an entity controlled by HIRST and Dunkerley. Dunkerley transferred more than $38 million from the WAPCC account to an account controlled by Jason Galanis, who then misappropriated more than $8.5 million of the proceeds for his personal use, including for expenses associated with his home, jewelry and clothing purchases, travel and entertainment, and restaurant meals.
In addition, a portion of the misappropriated proceeds were recycled and provided by Jason Galanis to entities affiliated with Archer and Cooney in order to enable Archer and Cooney to purchase subsequent Tribal Bonds issued by the WLCC. As a result of the use of recycled proceeds to purchase additional issuances of Tribal Bonds, the face amount of Tribal Bonds outstanding increased and the amount of interest payable by the WLCC increased, but the actual bond proceeds available for investment on behalf of the WLCC did not increase.
* * *
GARY HIRST, 65, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; one count of conspiracy to commit investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and one count of investment adviser fraud, which also which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.
Jason Galanis, 47, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; and one count of conspiracy to commit investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. On August 11, 2017, Galanis was sentenced principally to a term of 173 months in prison.
Hugh Dunkerley, 44, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; two counts of securities fraud, each of which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; one count of bankruptcy fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and one count of falsification of records with the intent to obstruct a Government investigation, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Trial against the remaining defendants is scheduled to begin on May 22, 2018, before U.S. District Judge Ronnie Abrams.
The guilty plea in this matter is HIRST’s second conviction in this District on charges of securities fraud. On September 28, 2016, HIRST was convicted following a jury trial before U.S. District Judge P. Kevin Castel for several offenses relating to a scheme to manipulate the market for shares of Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange. In that case, HIRST was sentenced to a term of 78 months in prison.
Mr. Khuzami praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Rebecca Mermelstein, Brendan F. Quigley, and Negar Tekeei are in charge of the prosecution.
[1] As for the defendants who have not pled guilty (John Galanis, Michelle Morton, Devon Archer, and Bevan Cooney) the description of the charges set forth herein constitute only allegations.
Registered Sex Offender Sentenced to 30 Years in Prison for Sex Offenses Against Wisconsin MinorRead the Press Release
WASHINGTON - James A. Huskisson, aka Jason Desantes, 45, of Ozone Park, New York, was sentenced yesterday to 30 years in federal prison by Chief District Judge William C. Griesbach, announced United States Attorney Matthew D. Krueger of the Eastern District of Wisconsin.
Huskisson, a registered sexual offender in the state of New York, initiated an online relationship with a Shawano, Wisconsin, 15 year-old using a popular online messaging system to correspond with the minor. Shortly after establishing contact, he began sending digital images of his genitalia, as well as demanding sexually explicit photographs from the child. Within two weeks of establishing contact, Huskisson travelled from his home in New York City to Shawano and engaged in illicit sexual activity with the minor victim.
Huskisson was convicted of first degree rape in 1997 and again in 1999 in New York, for which he was sentenced to seven years in prison, but was released after serving approximately five years. He was also required to register as a sexual offender for the remainder of his life.
In handing down the sentence, Chief Judge Griesbach noted the defendant’s “horrendous” record of sexual assaults. He further stated his belief that a 30 year sentence was both “just” and lengthy enough to protect the community, noting the uncertainty of Mr. Huskisson ever walking out of prison given his current age.
This case was investigated by the F.B.I.’s offices in Green Bay and New York City, the Shawano County Sheriff’s Office, the Shawano Police Department, the Brown County Internet Crimes Against Children (ICAC) Task Force, the New York Police Department, and the U.S. Marshal’s Service. It was prosecuted by Assistant United States Attorney Daniel R. Humble.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006, by the U.S. Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
# # #
Prince George’s County Man Pleads Guilty to Production of Child PornographyRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE www.justice.gov/usao/md at (410) 209-4885
Greenbelt, Maryland – Jayron Khalil Foster, age 21, of Riverdale, Maryland, has pled guilty to production of child pornography.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Chief Henry P. Stawinski III of the Prince George’s County Police Department; and Prince George’s County State’s Attorney Angela D. Alsobrooks.
According to his plea agreement, between at least August 2016 through January 2017, Foster allegedly engaged in sexually explicit conduct with a 7-year-old female, in order to produce visual depictions documenting the abuse. In April 2017, Maryland State Police (MSP) began investigating ten tips that were sent to the MSP Internet Crimes Against Children (ICAC) task force from the National Center for Missing and Exploited Children in reference to possible child pornography. On April 25, 2017, investigators executed a search warrant at Foster’s residence and seized a hard drive, which contained numerous images and videos depicting Foster engaged in sexually explicit conduct with the minor victim.
Foster faces a mandatory minimum of 15 years in prison and up to 30 years in prison for the one count of production of child pornography. Foster is currently detained in Prince George’s County on related state charges.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Robert K. Hur commended HSI, Maryland State Police, the Prince George’s County Police Department, and the Prince George’s County State’s Attorney’s Office for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Kelly O’Connell Hayes, who is prosecuting the case.
Port St. Lucie Resident Pleads Guilty to International Firearms TraffickingRead the Press Release
A Port St. Lucie resident pled guilty today to unlawfully exporting firearms, firearm accessories, and ammunition from South Florida to Rio de Janeiro, Brazil.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, and Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI); Diane J. Sabatino, Director, Field Operation, U.S. Customs and Border Protection (CBP), Miami Field Office; Peter J. Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division; and Ken J. Mascara, Sheriff, St. Lucie County Sherriff’s Office, made the announcement.
Frederik Barbieri, 46, of Port St. Lucie, Florida, pled guilty to one count of conspiracy to commit offenses against the United States, in violation of Title 18, United States Code, Section 371, and one count of unlicensed exportation of defense articles, in violation of Title 22, United States Code, Section 2778. Barbieri faces a possible maximum statutory sentence of 25 years in prison. Barbieri is scheduled to be sentenced on July 19, 2018, at 9:30 a.m., by United States District Court Judge Federico A Moreno.
According to stipulated facts filed in court, from May of 2013 through February of 2018, Barbieri conspired with others to: possess firearms with obliterated serial numbers; deliver packages containing those firearms to contract carriers for international shipment without providing notice that the packages contained firearms; and smuggle firearms, firearm accessories, and ammunition from the United States to Rio de Janeiro, Brazil.
During this period, a shipment sent by Barbieri was intercepted in Rio de Janeiro by Brazilian law enforcement and found to contain approximately thirty AR-15 and AK-47 rifles and firearm magazines, all concealed in four 38-gallon Rheem water heaters. The water heaters were hollowed out and loaded with the contraband, and the serial numbers on each of the firearms had been obliterated. The same day that Brazilian authorities intercepted his shipment, Barbieri called and requested that the freight forwarder destroy the related paperwork.
Documentation provided by the freight forwarder revealed Barbieri’s historical shipments. In addition to shipping the four Rheem water heaters in which he concealed approximately thirty rifles, Barbieri also shipped to Brazil an additional 120 Rheem water heaters, as well as 520 electric motors and 15 air conditioning units, from May of 2013 to May of 2017, using that freight forwarder. These items are all consistent with objects used to conceal the illegal international shipment of firearms and ammunition.
In February 2018, federal agents executed a warrant to search a storage unit rented by Barbieri in Vero Beach, Florida. In the storage unit, law enforcement discovered 52 rifles, 49 of which were wrapped for shipment with obliterated serial numbers. In addition, law enforcement discovered dozens of high capacity firearm magazines, over 2,000 rounds of ammunition, and packaging materials. Barbieri was arrested the following day.
It is illegal for civilians to possess firearms in Brazil. According to Brazilian law enforcement, AK and AR rifles have a black market value of approximately $15,000 to $20,000 in the black market. The retail cost of those firearms in the United States is approximately $700 to $1,000.
Neither Barbeiri, nor any of his coconspirators, obtained a license or written approval from the United States Department of State to export any defense articles. Non-automatic firearms, firearm accessories, and ammunition are articles designated as “defense articles,” pursuant to federal regulations.
Mr. Greenberg commended the investigative efforts of ICE-HSI, ATF, and CBP in connection with this matter. This case is being prosecuted by Assistant U.S. Attorney Brian J. Shack.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Pine Ridge Man Sentenced for Involuntary ManslaughterRead the Press Release
United States Attorney Ron Parsons announced that a Pine Ridge, South Dakota, man convicted of Involuntary Manslaughter was sentenced by Chief Judge Jeffrey L. Viken, U.S. District Court.
Brent Janis, age 22, was sentenced on May 8, 2018, to 37 months’ custody, followed by 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Janis was indicted for the charge by a federal grand jury in June 2016. The charge related to Janis driving a vehicle, while under the influence of alcohol, on April 8, 2016, at Pine Ridge. Janis lost control of the vehicle, which went into the ditch and rolled. Two individuals were ejected and killed in the crash.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, the Oglala Sioux Tribe Department of Public Safety, and the Federal Bureau of Investigation. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Janis was ordered to self-report to a Bureau of Prisons facility upon designation of the facility where Janis will serve his sentence.
Physician, Nurse Practitioner, and Nurse Plead Guilty in Montgomery “Pill Mill” CaseRead the Press Release
Montgomery, Alabama – During the past few weeks, three more health care providers have pleaded guilty in the ongoing “pill mill” prosecution arising out of a now-closed Montgomery medical office, announced United States Attorney Louis V. Franklin, Sr. That medical practice was known as “Family Practice” and was located at 4143 Atlanta Highway in Montgomery. In November of last year, the practice’s owner, Dr. Gilberto Sanchez, pleaded guilty to drug distribution, health care fraud, and money laundering charges. The details of each new guilty plea are as follows.
On Friday May 11, 2018, Dr. Julio Delgado, 56, of Homewood, Alabama, pleaded guilty to aiding and abetting the fraudulent acquisition of controlled substances. According to court documents, Dr. Delgado worked for Sanchez at Family Practice during 2015 and 2016. During that time, Dr. Delgado saw some of Dr. Sanchez’s patients when Dr. Sanchez was too busy. In open court on May 11, Dr. Delgado admitted to writing a prescription for someone who was never his patient and without ever examining the person.
On Monday, April 23, 2018, Elizabeth Cronier, 70, of Montgomery, Alabama, also pleaded guilty to aiding and abetting the fraudulent acquisition of controlled substances. Court documents show that Cronier was a certified registered nurse practitioner and that she worked for Sanchez at Family Practice from 2016 to 2017. When she pleaded guilty, Cronier admitted to aiding and abetting a patient in obtaining a fraudulent prescription for buprenorphine.
On Monday, April 30, 2018, Stephanie Michelle Ott, 42, of Fairhope, Alabama pleaded guilty to conspiring to make false statements related to health care matters. The charging document states that Ott, a registered nurse, worked for Sanchez during 2015 and 2016, serving as a practice management consultant. Through her work, Ott helped to implement a new medical billing system for the practice. Ott did so knowing that the system she was implementing would cause the practice to report medical services provided by nurse practitioners as though physicians had provided the services. By doing so, the practice collected 15 percent more for each service than it would have had it accurately reported the qualifications of the health care providers.
Each defendant will be scheduled for a sentencing hearing over the next several months. At sentencing, Delgado and Cronier will face maximum sentences of four years in prison, as well as substantial monetary penalties. Ott will face a maximum sentence of five years in prison, along with the monetary penalties.
These guilty pleas now make eight defendants who have pleaded guilty to offenses arising out of the operation of this pill mill. The five defendants who pleaded guilty previously are: (1) Dr. Sanchez, as noted above; (2) Dr. Sanchez’s former partner, Dr. Shepherd A. Odom, who pleaded guilty to drug distribution and money laundering charges; (3) nurse practitioner Steven Cox, who pleaded guilty to drug distribution and health care fraud charges; (4) Misty Fannin, the practice’s former office manager, who pleaded guilty to money laundering; and (5) Farley Pugh, another former office manager, who pleaded guilty to conspiring to make false statements related to health care matters.
This case was investigated by the Drug Enforcement Administration’s Tactical Diversion Squad, the Internal Revenue Service’s Criminal Investigation Division, and the Department of Health and Human Services – Office of Inspector General. The Montgomery County Sheriff’s Office, the Alabama Board of Medical Examiners, the Montgomery Police Department, and the Opelika Police Department all assisted in the investigation. Assistant United States Attorneys Jonathan S. Ross and R. Rand Neeley are prosecuting the case.
Phoenix Woman Sentenced to 51 Months in Prison for $852,000 Embezzlement Scheme, Filing a False Tax Return, and Failure to Appear in CourtRead the Press Release
PHOENIX - On May 11, 2018, Tara Kathleen Valencia, 38, of Phoenix, Ariz., was sentenced by U.S. District Judge Diane J. Humetewa to 51 months’ imprisonment, followed by three years of supervised release. Valencia had previously pleaded guilty to filing a false tax return with the Internal Revenue Service, wire fraud, and failure to appear in court (bail jumping). Valencia was also ordered to pay $852,253 in restitution.
Between 2006 and 2012, Valencia had been employed in Phoenix by Arizona Exterminating Company (AEC) as the HR Administrator. During this time, she embezzled $852,253 from the company by using business credit cards and checks for her own personal use. Some of her unlawful personal expenses included a home, medical and insurance expenses, food, maid services, salon and fitness expenses, home renovations, and a swimming pool and spa for her personal residence. Valencia concealed her scheme to defraud by doctoring credit card and checking account records to make it appear as if these expenses were legitimate expenses incurred by the company.
In addition, Valencia filed false federal income tax returns for the 2008 through 2011 tax years wherein she failed to report her proceeds from the scheme to defraud.
Following her arrest on the indictment on July 20, 2015, Valencia was released on her own personal recognizance to reappear in Court, as required. In the Fall of 2015, Valencia fled to Mexico where she remained a fugitive from justice. The U.S. Marshals Service eventually located Valencia in Mexico where she was arrested by the Mexican authorities on Nov. 5, 2017, and was returned to the United States.
Valencia was ordered to pay $852,253 in restitution to AEC and $252,806 to the Internal Revenue Service in back income taxes plus penalties and interest.
This investigation was conducted by the Internal Revenue Service-Criminal Investigation in Tucson, the United States Postal Inspection Service in Tucson, and the U.S. Marshals Service in Phoenix. The prosecution was handled by Wallace H. Kleindienst and Carolyn Nedder, Assistant U.S. Attorneys, District of Arizona, Tucson.
CASE NUMBERS: CR 15-0314-PHX-DJH/CR 16-1097-PHX-DJH
RELEASE NUMBER: 2018-065_Valencia
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Parmelee Man Sentenced for Sexual ContactRead the Press Release
United States Attorney Ron Parsons announced that a Parmelee, South Dakota, man convicted of Abusive Sexual Contact was sentenced on May 14, 2018, by U.S. District Judge Roberto A. Lange.
Harlan James Two Eagle, age 34, was sentenced to 12 months and 1 day in custody, followed by 5 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Two Eagle was indicted by a federal grand jury on October 12, 2016. He pled guilty on February 8, 2018.
The conviction stems from an incident on December 22, 2015, when Two Eagle and the victim were drinking alcohol with several people in the White Horse Community, in Todd County, South Dakota. At one point, Two Eagle tried to touch the victim in a sexual manner. The victim told Two Eagle to stop, but he touched her in the groin and inner thigh area with his hand without the victim’s permission, and then stopped.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Two Eagle was immediately turned over to the custody of the U.S. Marshals Service.
Northshore Contractor Charged with Conspiracy to Defraud First NBC BankRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that JEFFREY DUNLAP, age 44, a resident of Slidell, Louisiana and owner of Phoenix Civil Contractors was charged yesterday with conspiracy to defraud First NBC Bank, the New Orleans-based bank that failed in April 2017.
According to the Bill of Information, from March 2009 through April 2017, Phoenix Civil Contractors (“PCC”) and JEFFREY DUNLAP had a banking relationship with First NBC Bank. During that timeframe, Bank President A acted as the loan officer for PCC and JEFFREY DUNLAP, reviewing and approving new loans, lines of credit, and advances and incremental increases for PCC and JEFFREY DUNLAP. The largest loan was a revolving line of credit (“LOC”) secured by a borrowing base of eighty-percent of PCC’s accounts receivable. At the direction of Bank President A, JEFFREY DUNLAP submitted false financial statements and inflated accounts receivable on behalf of PCC to justify incremental increases on the LOC. Bank President A caused these false supporting documents to be placed in First NBC Bank’s records.
As alleged in the Bill of Information, the purpose of the conspiracy was for the defendant, JEFFREY DUNLAP, Bank President A, and others to unjustly enrich themselves, disguise the true financial status of PCC, and conceal the accurate performance of PCC’s LOC. The defendant, JEFFREY DUNLAP, Bank President A, and others sought to obtain money from First NBC Bank, in part, so that Bank President A and Owner B could continue using PCC on projects involving Company A, which was co-owned by Bank President A and Owner B. As a result, Bank President A and Owner B benefited by not having to use their own funds to pay PCC for work involving Company A.
The false and fraudulent financial statements, accounts receivable, and other documents submitted by JEFFREY DUNLAP disguised PCC’s true financial condition from First NBC Bank, bank regulators, investors, and others. By April 28, 2017, First NBC Bank had advanced approximately $22 million to PCC on the LOC, based on these false statements.
If found guilty, JEFFREY DUNLAP could face up to 30 years’ imprisonment, a fine of more than $1 million, five years of supervised release, and a special assessment of $100.
U.S. Attorney Duane A. Evans stated that a Bill of Information is merely an accusation and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case is being investigated by the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation, Office of Inspector General, and the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Office of Inspector General. Assistant U.S. Attorneys Sharan E. Lieberman and Hayden Brockett are in charge of the prosecution.
* * *
Norridgewock Man Sentenced to 70 Months on Gun and Ammunition ChargesRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Vance Cayford, 47, of Norridgewock, Maine was sentenced today in U.S. District Court by John A. Woodcock, Jr. to 70 months in prison and three years of supervised release for possession of ammunition and attempted possession of a firearm by a felon. The defendant pled guilty on November 3, 2017.
According to court records, on May 29, 2016, state troopers went to the defendant’s Norridgewock residence to investigate a domestic disturbance. Soon after they arrived, the defendant ran toward one of the troopers and attempted unsuccessfully to take the trooper’s rifle. During a search of Cayford’s residence, troopers recovered 92 rounds of .45-caliber ammunition. The defendant was prohibited from possessing ammunition and firearms because of previous Maine felony convictions for domestic violence assault and illegal possession of a firearm.
The investigation was conducted by the Maine State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted 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.
New Haven Man Pleads Guilty to Distributing Heroin and FentanylRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that ALEX BORRERO, also known as “Red,” 50, of New Haven, waived his right to be indicted and pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to one count of possession with intent to distribute, and distribution of, heroin and 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 February 28, 2017, the Wallingford Police Department and emergency medical personnel responded to a report of an untimely death of a 25-year-old male at a residence in Wallingford. At the scene, officers seized drug and non-drug evidence, including the victim’s cellphone and six empty wax folds bags that contained a white powder residue.
The Connecticut Office of the Chief Medical Examiner determined that the victim’s death was caused by a combination of fentanyl and alprazolam (Xanax).
The investigation revealed that BORRERO, who had been selling heroin and fentanyl in the New Haven area, was the source of the fentanyl involved in the overdose death of the victim. The investigation also revealed that another of BORRERO’s drug customers, a 31-year-old male, died of an overdose in Branford on May 18, 2017.
BORRERO was arrested on a federal criminal complaint on October 23, 2017. At the time of his arrest, he possessed approximately 30 grams of heroin and approximately $1,900 in cash.
Judge Underhill scheduled sentencing for August 7, 2018, at which time BORRERO faces a maximum term of imprisonment of 30 years. BORRERO is released on a $50,000 bond pending sentencing.
BORRERO’s criminal history includes multiple convictions, including a federal conviction for conspiracy to possess with intent to distribute heroin. In 1998, he was sentenced in the U.S. District Court for the Middle District of Florida, in Orlando, to 188 months of imprisonment. He was released from federal prison in 2011.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Task Force and the Wallingford and Branford Police Departments.
This case is being prosecuted by Assistant U.S. Attorneys John T. Pierpont, Jr. and Michael S. McGarry.
Morris County Man Admits Distribution of Child PornographyRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey man today admitted distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Mark Derzko, 74, of Mine Hill, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of distribution of child pornography. Derzko remains on bail pending sentencing.
According to documents filed in the case and statements in court:
Derzko used a peer-to-peer file-sharing program, which he installed on his computer several years ago, to download videos and images of child sexual abuse. In May, August and September of 2016, law enforcement downloaded more than two dozen videos of child sexual abuse from Derzko’s computer. After executing a search warrant at Derzko’s home in October 2016, agents located more than 2,000 videos and over 8,000 images of child sexual abuse on Derzko’s computers. Derzko admitted that he was making available for others to download videos he had previously saved on his computer.
The distribution of child pornography charge to which Derzko pleaded guilty carries a maximum potential penalty of 20 years in prison, a mandatory minimum sentence of five years in prison and a $250,000 fine. Derzko will be required to register as a sex offender. Sentencing is scheduled for Aug. 28, 2018.U.S. Attorney Carpenito credited special agents with the Department of Homeland Security, Homeland Security Investigations, under the direction of Newark Acting Special Agent in Charge Brian Michael, with the investigation leading to today’s guilty plea. He also thanked the Morris County Prosecutor’s Office and the Wharton, New Jersey, Police Department for their assistance with the case.
The government is represented by Senior Litigation Counsel Mark J. McCarren of the U.S. Attorney’s Special Prosecutions Division in Newark.
Defense counsel: Michael Koribanics Esq., Clifton, New Jersey
Missouri Woman Sentenced in Birmingham to 19 Years in Prison for 2016 Multi-State Crime SpreeRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Missouri woman to more than 19 years in prison for conspiracy and armed carjackings connected to a four-state crime spree in 2016 that ended with her partner’s death in a shoot-out with police in Florida, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp Jr.
U.S. District Judge Madeline Hughes Haikala sentenced BRITTANY NICOLE HARPER, 32, of Joplin, Mo., to 19 years and three months in prison on one count of conspiracy to transport a stolen vehicle across state lines, two counts of transporting a stolen vehicle across state lines, three counts of carjacking and one count of brandishing a gun during a crime of violence. Harper pleaded guilty to the charges in January. In exchange for Harper’s plea, the government agreed to drop a second count of brandishing a gun during a crime of violence.
“Harper and her companion crossed four states violently threatening the lives of innocent people,” Town said. “This was a rampage, not a crime spree, and the 20 years Harper will spend behind bars compares well to the grave fate suffered by her co-conspirator as a result of their shared malevolence.”
“Harper, who with her partner moved through four states carjacking vehicles and terrorizing citizens, thankfully, no longer poses a threat,” Sharp said. “Today’s sentence guarantees Harper will spend many years behind bars to face the consequences of her actions.
“For days the world watched as Harper and her boyfriend, Blake Fitzgerald, acted out some criminal fantasy of being a modern day Bonnie and Clyde, but the consequences of their actions in the Northern District of Alabama were very, very real,” said Assistant U.S. Attorney Erica Williamson Barnes. “Early on a Sunday morning, Harper and Fitzgerald kidnapped a young motel clerk in Tuscaloosa and forced him to ride along with them for over an hour; they pointed a gun at a restaurant employee trying to get to work in a busy shopping district; and they invaded a normally sleepy residential neighborhood and kidnapped a mother in her nightgown away from her two young children,” Barnes said. “Harper did not wield the gun, but she played an active role in terrorizing these three victims and the Northern District as a whole. The sentence imposed today holds her accountable for that and sends the message that there is nothing romantic about violent crime.”
The conspiracy between Harper and her male companion was “to unlawfully obtain vehicles, by whatever means necessary,” including acts of violence, and then to use the stolen vehicles as transportation between various states, according to federal court records.
Police arrested Harper in Milton, Fla., on Feb. 5, 2016, after a face-off with police in which her partner was shot and killed and she was wounded.
The couple launched a 10-day crime spree in Webb City, Mo., on Jan. 26, 2016, when they took a 2009 Cadillac on a test drive from a dealership and never returned. Before arriving in Alabama, the couple burglarized a home in Missouri, where they parked the stolen Cadillac in the garage and stole a 2007 Chevrolet Trailblazer parked at the home.
The crimes Harper and her co-conspirator committed in Alabama, according court records, included:
Stealing an air pump at the Walmart in Bessemer on Jan. 30, 2016, before driving the Trailblazer to Tuscaloosa, where they forced a motel clerk at gunpoint into the backseat of his 2011 Volkswagen Jetta. Harper and her companion drove the Jetta to Hoover on Jan. 31, 2016, and tried, unsuccessfully, to take a Camaro from a McDonald’s employee, and then released the motel clerk in Vestavia Hills.
Soon after releasing the clerk, Harper’s companion entered a home on Monte Vista Drive in Vestavia Hills, where he encountered one of the home owners and his minor children. The co-conspirator put a gun to the man’s neck and began forcing him toward the garage, but the man got free and went for help. The co-conspirator then forced the man’s wife at gunpoint into the homeowners’ 2010 Ford Edge and drove away.
Harper and her companion released the woman near the Grandview Medical Center on Cahaba River Road in Birmingham, and then drove the stolen Ford Edge to Perry County, Ga.
The indictment lists other crimes in Georgia and Florida before Harper’s arrest following a high-speed chase through neighborhoods in Milton, Fla., after police confronted the couple.
The FBI investigated the case, which Barnes and Assistant U.S. Attorney Brad Felton prosecuted.
Missouri Man Pleads Guilty in $3.4 Million Real Estate Investment Scheme that Targeted Orange County InvestorsRead the Press Release
SANTA ANA, California – A Missouri man who formerly served as a law enforcement reservist has pleaded guilty to a federal fraud offense and admitted operating a real estate scheme in Orange County that bilked dozens of Southern California investors who collectively suffered approximately $3.4 million in losses.
Shawn Patrick Watkins, 48 – who resided in Layton, Utah during the course of the fraud, but has since relocated to Branson, Missouri – pleaded guilty on Monday to one count of mail fraud.
Watkins pleaded guilty before United States District Judge Cormac J. Carney, who scheduled a sentencing hearing for November 19.
A second person involved in the scheme – Angel Bronsgeest, 55, of Lake Forest – previously pleaded guilty to one count of wire fraud and is also scheduled to be sentenced by Judge Carney on November 19.
According to court documents, Watkins promoted himself as a real estate expert with a background in law enforcement and engineered a scheme that defrauded more than 50 victims. Watkins admitted in his plea agreement that he conducted monthly seminars in which he offered investments in his company, The Equity Growth Group (TEGG) from at least 2007 to at least October 2013. Victims were told their money would be used to acquire or to repair properties. Some investors were asked to provide “bridge loans” to allow TEGG to acquire certain properties when money from another investor had not been received.
Watkins made a number of false promises to investors. For example, investors were falsely advised that TEGG controlled hundreds of properties that generated rental income and that TEGG would continue its growth by acquiring new properties. Investors were led to believe that they would receive substantial interest payments and that their money would be secured by collateral through the filing of deeds of trust on properties.
In reality, over the course of several years leading up to the collapse of TEGG, the company was not acquiring new properties and had a negative cash flow. Investor money was not used to acquire new properties, nor were investments secured by collateral, and many victims did not receive interest payments. In fact, money that was paid to some victims as purported interest or a return on their investment came from investments made by other victims. Investor funds also were used to pay salaries and other expenses, including mortgages on three homes Watkins purchased and were being occupied by Watkins, his parents and his estranged wife and children.
As a result of his guilty plea, Watkins faces a statutory maximum penalty of 20 years in federal prison.
The cases against Watkins and Bronsgeest are the result of an investigation by the Federal Bureau of Investigation.
The prosecution of these cases is being handled by Assistant United States Attorney Greg Staples of the Santa Ana Branch Office.
Mexican Citizen Sentenced for Illegal Re-entryRead the Press Release
ALBANY, NEW YORK – Jeronimo Alvarez-Santiago, age 19, and a citizen of Mexico, was sentenced today to time served (4 months in jail), for 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).
As part of his guilty plea, Alvarez-Santiago admitted that he was removed from the United States to Mexico on May 30, 2017. On January 9, 2018, ICE Officers arrested Alvarez-Santiago in Albany.
Following his sentencing today, Alvarez-Santiago was remanded to the custody of the Department of Homeland Security, for removal proceedings.
This case was investigated by ICE-ERO and prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Mexican Citizen Sentenced for Illegal Re-entryRead the Press Release
ALBANY, NEW YORK – Abel De Jesus-Gonzalez, age 24, and a citizen of Mexico, was sentenced today to time served (19 days in jail), for 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).
As part of his guilty plea, De Jesus-Gonzalez admitted that he was removed from the United States to Mexico on January 22, 2018. On April 26, 2018, ICE Officers arrested De Jesus-Gonzalez in Albany.
Following his sentencing, De Jesus-Gonzalez was remanded to the custody of the Department of Homeland Security, for removal proceedings.
This case was investigated by ICE-ERO and prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Maryland Man Pleads Guilty to Exploiting 12-Year-Old Girl over the InternetRead the Press Release
A Rockville, Maryland man pleaded guilty today to exploiting a 12-year-old Virginia girl by using the Internet to coerce and entice her to engage in illegal sexual activity.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Tracy Doherty-McCormick of the Eastern District of Virginia and Special Agent in Charge Patrick J. Lechleitner of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Washington, D.C., made the announcement after the plea was accepted by U.S. District Judge Anthony J. Trenga of the Eastern District of Virginia.
Jose Adalberto Sandoval Quinonez, 26, pleaded guilty to one count of coercion and enticement of a minor to engage in sexual activity. According to admissions made in connection with his guilty plea, Sandoval initiated contact with the 12-year-old victim over Instagram and the two later began chatting over Google Hangouts. Over the course of several months in 2017, Sandoval used Google Hangouts to groom, persuade, and entice the minor to engage in sex acts, including sexual intercourse. In addition, he repeatedly asked her to produce and send him sexually explicit photos of herself, and he succeeded in persuading her to send him such a photo. Sandoval also sent the victim an image of his penis. During these interactions, Sandoval, who was 25 at the time, pretended to be 16 years old.
Sentencing is scheduled for Aug. 10.
HSI investigated the case with the assistance of the City of Manassas Park Police Department. Trial Attorney Kyle P. Reynolds of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Whitney D. Russell of the Eastern District of Virginia are prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Man Pleads Guilty to Exploiting 12-Year-Old Girl over InternetRead the Press Release
ALEXANDRIA, Va. – A Rockville, Maryland man pleaded guilty today to exploiting a 12-year-old Virginia girl by using the Internet to coerce and entice her to engage in illegal sexual activity.
According to court documents, Jose Adalberto Sandoval Quinonez, 26, initiated contact with the 12-year-old victim over Instagram and the two later began chatting over Google Hangouts. Over the course of several months in 2017, Sandoval used Google Hangouts to groom, persuade, and entice the minor to engage in sex acts, including sexual intercourse. In addition, he repeatedly asked her to produce and send him sexually explicit photos of herself, and he succeeded in persuading her to send him such a photo. Sandoval also sent the victim an image of his penis. During these interactions, Sandoval, who was 25 years old at the time, pretended to be 16 years old.
Sandoval Quinonez pleaded guilty to one count of coercion and enticement of a minor to engage in sexual activity, and faces a mandatory minimum of 10 years in prison and a maximum penalty of life in prison when sentenced on August 10. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Tracy Doherty-McCormick, Acting U.S. Attorney for the Eastern District of Virginia, John P. Cronan, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Patrick J. Lechleitner, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Washington, D.C., made the announcement after U.S. District Judge Anthony J. Trenga accepted the plea. Assistant U.S. Attorney Whitney Doherty Russell and Trial Attorney Kyle P. Reynolds of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) are prosecuting the case.
HSI investigated the case with the assistance of the City of Manassas Park Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-145.