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7 May 2018
Debt Collection Outfit Fined $350,000 and Ordered to Forfeit $946,770 for Paying Bribes to Arizona Official in Exchange for Non-Public InfoRead the Press Release
LOS ANGELES – A now-defunct debt collection company that was based in Culver City was sentenced today for its role in a scheme that paid bribes to a public official in Arizona in exchange for confidential information that helped the company collect nearly $1 million in outstanding debts.
Professional Collection Consultants (PCC) was ordered to pay a $350,000 fine and to forfeit $946,770, which represent the amount of money PCC was able to collect in eight months as a result of the information obtained through bribes.
PCC was sentenced by United States District Judge S. James Otero, who is scheduled to sentence a PCC employee later this month for his role in the scheme.
According to court documents, PCC paid bribes to an employee of the Arizona Department of Economic Security, the state agency that provided unemployment insurance benefits, from approximately September 2010 through August 2013. In exchange for the bribes, the public official disclosed to PCC wage and earnings information for specific Social Security numbers that had been provided by a PCC employee. The state agency maintained employment-related data in its computer systems that were linked with federal and state databases containing confidential information for people across the nation.
The PCC employee who was charged in this case – Michael S. Flowers, 56, of Mid-City Los Angeles – provided the Arizona official with the names and social security numbers of thousands of people who owed money on accounts being serviced by PCC, and the official sent confidential information found on each individual or advise that no wages existed for a specific Social Security number. PCC used the confidential information to analyze the collectability of each debtor’s debt and to determine whether it made financial sense for PCC to sue a debtor in an effort to obtain a judgment that would allow PCC to garnish wages.
Flowers deposited the bribe payments into a local bank where the Arizona official maintained an account.
During the first eight months of 2013, the confidential information assisted PCC’s efforts in collecting $946,770 in debts owed, and Flowers received a 10 percent commission on these recoveries.
PCC and Flowers each pleaded guilty to one count of conspiracy to commit bribery concerning a program receiving federal funds. Flowers is scheduled to be sentenced on May 29.
This matter was investigated by the United States Department of Labor, Office of the Inspector General, which received assistance from the Federal Bureau of Investigation.
The case is being prosecuted by Assistant United States Attorney Elisa Fernandez of the Public Corruption and Civil Rights Section.
DEA Brings in Record Number of Unused Pills During 15th Annual National Prescription Drug Take Back DayRead the Press Release
Americans nationwide did their part to drop off a record number of unused, unwanted or expired prescription medications during the DEA’s 15th National Prescription Drug Take Back Day, at close to 6,000 sites across the country. Together with a record-setting amount of local, state and federal partners, DEA collected and destroyed close to one million pounds—nearly 475 tons—of potentially dangerous expired, unused, and unwanted prescription drugs, making it the most successful event in DEA history.
This brings the total amount of prescription drugs collected by DEA since the fall of 2010 to 9,964,714 pounds, or 4,982 tons.
“Today we are facing the worst drug crisis in American history, with one American dying of a drug overdose every nine minutes,” said Attorney General Jeff Sessions. “An unprecedented crisis like this one demands an unprecedented response--and that's why President Trump has made this issue a priority for this administration. DEA's National Drug Take Back Days are important opportunities for people to turn in unwanted and potentially addictive drugs with no questions asked. These Take Back Days continue to break records, with the latest taking nearly 1 million pounds of prescription drugs off of our streets. And so I want to thank DEA and especially every American who participated in this event. I have no doubt it will help keep drugs out of the wrong hands and stop the spread of addiction."
“National Prescription Drug Take Back Day is a day for every American, in every community across the country, to come together and do his or her part to fight the opioid crisis – simply by disposing of unwanted prescription medications from their medicine cabinets,” said DEA Acting Administrator Robert W. Patterson. “This event – our 15th – brings us together with local, state and federal partners to fight the abuse of prescription drugs that is fueling the nation’s opioid epidemic.”
Now in its 9th year, National Prescription Drug Take Back Day events continue to remove ever-higher amounts of opioids and other medicines from the nation’s homes, where they could be stolen and abused by family members and visitors, including children and teens.
This initiative addresses a vital public safety and public health issue. Medicines that languish in home cabinets are highly susceptible to diversion, misuse and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet.
DEA launched its prescription drug take back program when both the Environmental Protection Agency and the Food and Drug Administration advised the public that their usual methods for disposing of unused medicines—flushing them down the toilet or throwing them in the trash—posed potential safety and health hazards.
Helping people to dispose of potentially harmful prescription drugs is just one way DEA is working to reduce the addiction and overdose deaths plaguing this country due to opioid medications.
Complete results for DEA’s fall Take Back Day are available at www.deatakeback.com. DEA’s next Prescription Drug Take Back Day is October 27, 2018.Conway Man Sentenced in Federal Court for Drug ChargesRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Artemio Bustos Solano, age 35, of Conway, SC, was sentenced in federal court in Florence, South Carolina, for conspiracy to distribute cocaine, a violation of Title 21, United States Code, Section 846. United States District Judge Bryan Harwell, of Florence, sentenced Solano to 48 months’ imprisonment followed by 3 years of supervised release,
Evidence presented at the guilty plea hearing established that in the later part of 2010, agents learned from a confidential informant that Solano and a codefendant, who previously pled guilty and has been sentenced, were involved in the distribution of multiple kilograms of cocaine in the Horry County area. The informant was able to approach Solano and the codefendant and arrange for the controlled purchase of two kilograms of cocaine from them. Solano negotiated the details of the deal which was to take place on April 8, 2011 in the parking lot of a grocery store in Conway. On April 8 the informant brought the “buy money” to the grocery store parking lot and showed it to the codefendant who then left to retrieve the cocaine from Solano’s residence. After the codefendant returned to the grocery store parking lot with the cocaine, agents arrested the codefendant and seized the two kilograms. However, agents were not able to apprehend Solano at the scene. In fact, he was not arrested until September 2017.
The case was investigated by agents of ICE- Homeland Security Investigations with the assistance of the 15th Circuit Drug Enforcement Unit (DEU). Assistant United States Attorney A. Bradley Parham of the Florence office prosecuted the case.
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Columbus Man Pleads Guilty to Federal Drug ChargeRead the Press Release
HUNTINGTON, W.Va. – A Columbus, Ohio man who helped set up multiple drug deals in Huntington in August and September 2016 pled guilty today to multiple federal drug crimes, announced United States Attorney Mike Stuart. Carl Keylow Jackson, 38, entered his guilty pleas to two counts of aiding and abetting the distribution of heroin, as well as aiding and abetting the distribution of cocaine base, also known as “crack.” United States Attorney Stuart commended the investigative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
“Thanks to the tireless work of our law enforcement partners, another out-of-state drug dealer has been removed from the streets of Huntington,” said United States Attorney Mike Stuart. “We are united and determined in our efforts to take back our streets from those wreaking havoc.”
On September 13, 2016, law enforcement used a confidential informant to contact Jackson and arrange a crack deal. When the informant called Jackson, the informant was directed to go to the area of the Little Caesar’s on 1st Street in Huntington. Jackson also confirmed how much crack the informant wanted to purchase and the price for the crack. Stephen Somon subsequently met the informant and distributed 6.5 grams of crack to the informant in exchange for $850. Jackson also admitted to assisting in the sale of heroin in Huntington on at least two occasions in August 2016. On one occasion, the heroin purchased by an informant was tested by a chemist and found to be mixed with fentanyl, a powerful prescription painkiller.
Jackson faces up to 20 years in federal prison when he is sentenced on August 6, 2018.
Somon previously pled guilty and is scheduled to be sentenced on May 29, 2018.
Assistant United States Attorneys Joseph F. Adams is handling the prosecution. The plea hearing was held before United States District Judge Robert C. Chambers.
This prosecution is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Camp Hill Attorney Charged with Obstruction of Proceedings Before Agencies of the United StatesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Charles W. Johnston, age 70, of Camp Hill, Pennsylvania, was indicted by a federal grand jury on April 12, 2018, for obstruction of proceedings before agencies of the United States. The indictment was unsealed today
According to United States Attorney David J. Freed, the indictment alleges that from August 28, 2014 to May 1, 2015, Johnston, legal counsel for the Plumbers and Pipefitters Local Union 520 Plan, corruptly withheld and concealed documents related to allegations of mismanagement of the pension plan and fraud made by PATH, the pension’s third party administrator.
"An important mission of the Office of Inspector General is to investigate allegations of fraud affecting the employee benefit plans covered by the Employee Retirement Income Security Act. We will continue to work with our law enforcement partners to investigate these types of allegations,” said Richard Deer, Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.
“The prosecution of those who obstruct the investigative activities of the Employee Benefits Security Administration is essential to this agency’s mission to protect the rights of America’s workers,” said Michael Schloss, EBSA Regional Director in Philadelphia. “We and our law enforcement partners will continue to aggressively investigate such crimes on behalf of workers nationwide.”
The case was investigated by the U.S. Department of Labor Office of Inspector General, the Employee Benefits Security Administration, and the Federal Bureau of Investigation. Assistant U.S. Attorney Joseph J. Terz is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is four years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Brooklyn Man Convicted of Stealing from a Disabled Army Veteran and the VARead the Press Release
BINGHAMTON, NEW YORK – A jury voted on Friday to convict Kevin Green, age 57, of Brooklyn, New York, of theft of government property and misappropriation by a fiduciary, following a 5-day trial.
The announcement was made by United States Attorney Grant C. Jaquith and Special Agent in Charge Sean Smith of the U.S. Department of Veterans Affairs Office of Inspector General (VA-OIG), Northeast Field Office.
The evidence at trial established that Green received approximately $71,000 in disability compensation benefits from the VA as fiduciary for a disabled 73-year old Army veteran, between March 2011 and May 2013. Green was required to spend that money solely for the benefit of the veteran. The veteran had lived in a cottage on Green’s property in Kerhonkson, New York, but moved into a Vermont veterans’ home in April 2012. All of the veteran’s expenses at the veterans’ home were paid for by the VA, but Green continued to collect the veteran’s disability compensation benefits. When asked for an accounting, Green misrepresented how he had spent the benefits. The evidence demonstrated that he had spent tens of thousands of dollars on himself.
Green faces up to 10 years in prison, and up to 3 years of post-imprisonment supervised release, when he is sentenced by Senior United States Judge Thomas J. McAvoy. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by VA-OIG and is being prosecuted by Assistant U.S. Attorney Cyrus P.W. Rieck.
Bowling Green Physician Sentenced to 96 Months in Prison for Unlawfully Distributing and Dispensing Controlled Substances and Health Care FraudRead the Press Release
BOWLING GREEN, Ky. –Warren County, Kentucky, physician Charles Fred Gott was sentenced in United States District Court, before United States District Judge Greg N. Stivers, to 96 months’ imprisonment for multiple charges of unlawful distribution and dispensing of controlled substances and health care fraud, announced United States Attorney Russel M. Coleman.
Charles Fred Gott, age 66, a formerly licensed physician in the Commonwealth of Kentucky, was initially indicted by a grand jury in Bowling Green on June 10, 2015. Today, Gott was sentenced in accordance with his plea of guilty, entered on February 5, 2018, and ordered to pay restitution and Court costs in the amount of $162,366.46, and forfeited his medical license, which had previously been suspended. Furthermore, Gott was order to pay a fine in the amount of $17,500.
Today’s sentence covers criminal activity between 2006 and September 19, 2013, in Warren County, Kentucky. Gott admitted to conspiring with members of his office and others to knowingly and intentionally distribute and dispense, not for a legitimate medical purpose in the usual course of professional practice, Schedule II, Schedule III and Schedule IV controlled substances. Included are 14 counts of unlawfully dispensing Methadone and Fentanyl – Schedule II controlled substances, Hydrocodone – a Schedule III controlled substance, and Clonazepam and Oxymorphone – Schedule IV controlled substances – between June 10, 2010 and September 19, 2013.
Further, between 2006 and September 19, 2013, Gott admitted to falsely and fraudulently billing various health care benefit programs, including Medicare and Medicaid, among others, by submitting claims for office visits at a higher code than the service actually provided for patients under his care.
Also, during that same period, Gott falsely and fraudulently billed various health care benefit programs, including Medicare and Medicaid, among others, by submitting claims for medically unnecessary spirometry tests for patients and electrocardiogram (EKG/ECG) tests for patients.
This case is being prosecuted by Assistant United States Attorneys Mac Shannon, Lettricea Jefferson-Webb and Joseph Ansari. This case was investigated by the Warren County Drug Task Force, Drug Enforcement Administration (DEA) Drug Diversion Section, the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), Kentucky State Police, Kentucky Office of the of the Attorney General, Office of Medicaid Fraud and Abuse, and Federal Bureau of Investigation (FBI). The Warren County Drug Task Force, led by Director Tommy Loving, along with detectives from KSP’s West Drug Enforcement Branch, were instrumental in identifying and developing this case for federal prosecution.
Arizona Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Ron Parsons announced that a Tucson, Arizona, man charged with Conspiracy to Distribute a Controlled Substance (methamphetamine) was sentenced on April 30, 2018, by U.S. District Court Judge Roberto A. Lange.
Antonio Valentino Foster, age 26, was sentenced to 60 months in custody, followed by 4 years of supervised release, forfeiture of $5,382 in U.S. currency, and a special assessment to the Federal Crime Victims fund in the amount of $100.
Foster was indicted by a federal grand jury on August 16, 2017, for Conspiracy to Distribute a Controlled Substance, Possession with Intent to Distribute a Controlled Substance, and Distribution of a Controlled Substance. Foster pleaded guilty on February 20, 2018.
Between March 1, 2017, and August 16, 2017, Foster conspired with other individuals to distribute methamphetamine. Foster admitted that he received distributable quantities of methamphetamine from individuals who knew that he intended to engage in further distribution. Foster distributed some of that methamphetamine in South Dakota, and also provided methamphetamine to others knowing that they intended to engage in further distribution within South Dakota. It was reasonably foreseeable to Foster that at least 50 grams of methamphetamine would be distributed during the course of the conspiracy.
On April 25, 2017, near Rosebud, South Dakota, Foster distributed methamphetamine to a confidential informant. On April 27, 2017, near Rosebud, Foster was apprehended by law enforcement with 89.15 grams of methamphetamine and $5,285 in U.S. currency in his possession. Foster admitted that the cash was proceeds from the sale of the methamphetamine and agreed to forfeit his interest in the currency.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Foster was immediately turned over to the custody of the U.S. Marshals Service.
Alleged Robber of IBC Bank in Shawnee in Custody in MississippiRead the Press Release
OKLAHOMA CITY – ADAM J. STEELE, 26, has been charged with the robbery of an IBC Bank in Shawnee, Oklahoma, announced Robert J. Troester, Acting U.S. Attorney for the Western District of Oklahoma.
According to a complaint filed in federal court in Oklahoma City on May 1, 2018, a man robbed a branch of IBC Bank on North Harrison Avenue in Shawnee on April 14, 2018, by presenting a note that read: "give me $10,000, you won’t get shot if you give it to me, don’t be stupid." The man allegedly left the bank with $2,909 in cash. According to the complaint, he was carrying a canvas bag and wearing a dark-colored ball cap, dark sunglasses, and a bright orange sweatshirt.
The complaint alleges the robber was Steele and that he was arrested in Hernando, Mississippi, on April 27 for driving a stolen 2005 Chevrolet Tahoe registered in Oklahoma. Investigators searched the vehicle and found clothing matching the description of the suspect during the robbery, as well as a canvas bag.
Steele is currently in Mississippi state custody. He is expected to be returned to Oklahoma in the coming weeks to make his appearance in federal court.
This case is the result of an investigation by the FBI, with assistance from the Shawnee Police Department and the Hugo Police Department. Assistant U.S. Attorney Arvo Mikkanen is prosecuting the case.
The public is reminded that this complaint is merely an allegation and that Steele is innocent unless proven guilty beyond a reasonable doubt.
Reference is made to public filings for further information.
Abingdon Nurse Practitioner Pleads Guilty to Conspiring to Illegally Prescribe Buprenorphine, Clonazepam, and Gabapentin at Substance Abuse Treatment ProgramRead the Press Release
Abingdon, VIRGINIA – United States Attorney Thomas T. Cullen announced today that an Abingdon, Virginia, nurse practitioner pleaded guilty to charges related to the illegal distribution of opiates and other prescription drugs.
Matthew Justin Sykes, 43, pleaded guilty in the U.S. District Court for the Western District of Virginia to one count of conspiring to (a) misbrand a drug in interstate commerce by causing prescription drugs to be dispensed without a valid prescription and (b) illegally distribute Schedule III and IV controlled substances. In addition, he pleaded guilty to eight counts of distributing oxycodone, a Schedule II opiate, one count of distributing alprazolam, a Schedule IV benzodiazepine, and one count of using the United States Postal Service in committing, causing or facilitating a felony drug trafficking offense.
Sykes was employed by Watauga Recovery Center from March 2012 until April 2017, a practice that holds itself out as a substance abuse treatment program. Watauga Recovery Center has locations in Virginia, Tennessee and North Carolina. Sykes worked primarily at Watauga Recovery Center’s Duffield, Virginia, office. Sykes was also employed by E & C Counseling, another practice holding itself out as a substance abuse treatment center, located in Abingdon, Virginia. Sykes had a valid DEA registration number during this time which was surrendered in May 2017.
Sykes pleaded guilty to conspiring with other health care providers and employees at Watauga Recovery Centers, a cash payment practice, to regularly prescribe a combination of buprenorphine, clonazepam, and gabapentin, without a legitimate medical purpose and outside the usual course of professional practice. This included issuing prescriptions to patients knowing there was no legitimate reason to do so, and prescribing three dosage units of buprenorphine per day to patients, knowing that at least one of the three doses would be diverted and sold. In addition, Sykes and his co-conspirators would cause prescriptions to be issued in the name of a prescriber who had not examined the patient.
In addition, on multiple occasions from January 2014 until April 2017, Sykes wrote prescriptions for Schedule II controlled substances in various individuals’ names. These prescriptions were not recorded in regular patient files of Watauga Recovery Center or E & C Counseling. The prescriptions were filled at various pharmacies located in the Western District of Virginia. Some of these prescriptions were filled by Sykes himself without the individual’s knowledge or consent, while others were filled by the individuals, who then gave Sykes part of the controlled substances dispensed by the pharmacies. Sykes has admitted that he wrote the prescriptions and that they were issued without a legitimate medical purpose and beyond the bounds of professional practice.
On October 30, 2017, Sykes received a package at his home in Abingdon, Virginia, delivered by the United States Postal Service, which contained alprazolam, a schedule IV controlled substance. Sykes has stated that he ordered this alprazolam from an anonymous internet source on the “dark web.” He has stated that he had been ordering and receiving controlled substances from several different anonymous sources on the dark web since 2013, including oxycodone, hydrocodone, Adderall, and alprazolam, and that he has given and sold controlled substances ordered on the dark web to other individuals.
This case is part of an investigation by the Food and Drug Administration-Office of Criminal Investigations, the Drug Enforcement Administration, the United States Postal Inspection Service, the Tennessee Bureau of Investigation, the Virginia State Police, and the Virginia Office of the Attorney General’s Medicaid Fraud Control Unit.
Special Assistant United States Attorney/Virginia Assistant Attorney General Janine Myatt and Assistant United States Attorney Randy Ramseyer are prosecuting the case with assistance from the United States Attorney’s Office for the Eastern District of Tennessee.
41-Count Indictment Charges 10 Alleged Latin Kings Members and Associates with Drug and Gun OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, Patricia M. Ferrick, Special Agent in Charge of the Federal Bureau of Investigation, and Hartford Police Chief David Rosado today announced the unsealing of a 41-count indictment charging 10 alleged members and associates of the Almighty Latin Kings Nation with narcotics offenses related to the distribution of heroin, fentanyl and crack cocaine in Hartford. The indictment also charges four of the defendants with firearm offenses stemming from a shooting incident last year in Hartford’s South End.
The indictment, which was returned by a grand jury in Hartford on May 1 and unsealed today, stems from a joint law enforcement investigation headed by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department’s Vice and Narcotics Division targeting gang violence and narcotics trafficking in Hartford.
Charged in the indictment are:
WILSON VELEZ, a.k.a. “Wiso,” 33, of Newington
MIGUEL CLAUDIO, a.k.a. “Mega,” 35, of Hartford
JOSHUA AMARAL, a.k.a. “Ill Child,” 33, of Hartford
ANGEL CABRERA, 23, of Hartford
SAMMY DIAZ, a.k.a. “Shorty,” 30, of Meriden
CRUZ FERNANDEZ, a.k.a. “Blood,” 27, of Hartford
JOSE RODRIGUEZ, a.k.a. “Juice,” 47, of Hartford
FRANKIE VEGA, a.k.a. “Lips,” 33, of Hartford
MIGUEL MARTINEZ, a.k.a. “Nitro,” 33, of Hartford
MARIO MERCADO, a.k.a. “Taz,” 33, of HartfordClaudio, Diaz, Fernandez, Rodriguez, Vega, and Mercado were arrested today. They appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford and are detained.
Velez was arrested on related narcotics offenses on December 7, 2017, and was subsequently released on bond. He was arrested again on April 5, 2018, and his bond was revoked after the court determined there was probable cause that Velez committed additional offenses while he was released. Amaral and Cabrera are incarcerated in state custody. Martinez is still being sought.
The indictment alleges that between April 2017 and April 2018, Velez, Claudio, Amaral, Cabrera, Diaz, Fernandez, Rodriguez and Vega conspired to distribute and to possess with intent to distribute heroin, fentanyl, cocaine and cocaine base (“crack cocaine”). If convicted of conspiracy, based on the type and quantity of narcotics charged, Velez faces a minimum term of imprisonment of 10 years and a maximum term of imprisonment of life; Claudio and Rodriguez face a minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years, and Amaral, Cabrera, Diaz, Fernandez and Vega face a maximum term of imprisonment of 20 years.
In addition to the conspiracy count, Velez, Claudio, Amaral, Cabrera, Fernandez, Vega, Martinez and Mercado are each charged with one or more counts of possession and/or distribution of various controlled substances. Velez also is charged with one count of employing a minor to distribute heroin and fentanyl, and Diaz and Vega are charged in one or more counts with using a telephone to facilitate the distribution of heroin and/or fentanyl.
The indictment also charges Velez, Claudio, Amaral and Cabrera with firearms offenses stemming from a shooting incident that occurred on April 28, 2017, in the area of Franklin Avenue and Barker Street in Hartford. If convicted of using and carrying a firearm in relation to, and furtherance of, a drug trafficking crime, these defendants face a mandatory consecutive 10-year term of imprisonment. In addition, Martinez is charged with being a convicted felon in possession of a firearm on June 8, 2017, an offense that carries a maximum term of imprisonment of 10 years.
U.S. Attorney Durham stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department. The Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics Division and Shooting Task Force have provided valuable assistance to the investigation.
The case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
4 May 2018
‘Incorrigible’ Defendant Responsible for $7.5 Million Bank Fraud Scheme Sentenced to more than 16 Years in PrisonRead the Press Release
A Seattle man with a lengthy history of bank fraud was sentenced today in U.S. District Court in Seattle to 196 months in prison and five years of supervised release for a $7.5 million bank fraud scheme, announced U.S. Attorney Annette L. Hayes. LONNIE EUGENE LILLARD, 42, pleaded guilty to conspiracy to commit bank fraud in January 2017. At a subsequent hearing, the court determined that the scheme involved attempts—most of which were successful—to steal more than $7.5 million over a period of about 18 months. At the sentencing hearing Chief Judge Ricardo S. Martinez noted that LILLARD had 12 felony convictions by the age of 20. “You’ve spent your entire life trying to defraud other people . . . . Time spent in prison has not been a deterrent to get you to stop criminal activity.”
According to records filed in the case, LILLARD was the leader of a large group of conspirators who stole point-of-sale terminals, then reprogrammed them with stolen merchant identification numbers to make it appear that the conspirators were in fact the merchants. They used the stolen point-of-sale terminals to process unauthorized return and refund transactions, and applied those credits to thousands of prepaid credit cards, prepaid debit cards, and gift cards. The conspirators then quickly spent the fraudulent proceeds—withdrawing cash from ATMs, buying merchandise they returned for cash, purchasing money orders and other negotiable instruments, transferring the funds to other gift cards or bank accounts, and buying precious metals—before the fraud was detected and the transactions reversed. The co-conspirators hid their fraud in part by setting up their operations first in hotel rooms, then in rented office space, and sometimes spoofing phone numbers, so that the transactions could not easily be traced to them. When search warrants were served on the homes of LILLARD and two of his co-conspirators, as well as a storage locker, law enforcement located more than 1,000 access devices, about 15 point-of-sale terminals, notebooks filled with used and unused merchant identification numbers, and thousands of receipts documenting the fraud. The victims in this case include payment processors (some owned by banks such as Chase) and dozens of merchants such as Old Country Buffet, See’s Candies, Michaels, Quiznos, and many more.
LILLARD was the leader of the scheme, and has a long history of fraud convictions in both state and federal court. In 2006, when LILLARD was sentenced in Nevada to nearly nine years in prison, the prosecutor called him ‘incorrigible’ – something LILLARD denied, claiming he planned to turn his life around upon release from prison. Evidence indicates he began planning the current fraud even before he completed his last prison sentence. Within weeks of his release, LILLARD had the new fraud scheme up and running.
A co-defendant, Nathaniel Wells, who also participated in leading the implementation of the scheme, was sentenced to just over 11 years in prison in March 2018. The defendants are responsible for $5,816,938 in restitution.
The case was investigated by the FBI Cyber Task Force. The case was prosecuted by Assistant United States Attorney Erin H. Becker and Special Assistant United States Attorney Benjamin Diggs.
West Haven Man Sentenced to 27 Months in Prison for Distributing Fentanyl to Bridgeport Overdose VictimRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JOHN RODRIGUEZ, 37, of West Haven, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 27 months of imprisonment, followed by four years of supervised release, for distributing fentanyl to a Bridgeport man who overdosed on the drug in 2015.
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, shortly after midnight on November 7, 2015, Bridgeport Police and emergency medical personnel responded to a residence in Bridgeport after a 29-year-old male had been found unresponsive by his roommate. The victim was transported by ambulance to the hospital where, after several attempts to revive him, he was pronounced dead.
The investigation, which included witness interviews and analysis of text message communication, revealed that RODRIGUEZ supplied what he believed to be heroin to the victim the day before the victim died.
A post-mortem toxicology report found fentanyl, marijuana and several anti-depressant drugs in the victim’s system, and the Office of the Chief Medical Examiner for the State of Connecticut concluded that the victim died from acute fentanyl intoxication.
RODRIGUEZ was arrested on a federal criminal complaint on September 22, 2016. On December 12, 2017, he pleaded guilty to one count of possession with intent to distribute, and distribution of, heroin.
This matter was investigated by the Drug Enforcement Administration’s New Haven Task Force and the West Haven and Bridgeport Police Departments. The case was prosecuted by Assistant U.S. Attorneys John T. Pierpont, Jr. and Jocelyn Courtney Kaoutzanis.
Walnut Creek Man Pleads Guilty to Conducting Illegal Gambling Business in Sacramento and ElsewhereRead the Press Release
SACRAMENTO, Calif. — May Levy, 27, of Walnut Creek, pleaded guilty today to conducting an illegal gambling business, U.S. Attorney McGregor W. Scott announced.
According to court documents, between September 2015 and November 2017, Levy conducted an illegal gambling business in concert with his co-defendants, Eran Buhbut, 32, of Oakland; Yaniv Gohar, 34, of Berkeley; and Orel Gohar, 27, of San Francisco, as a part of the Gohar organization. In violation of California law, members of the Gohar organization, including Levy, installed and maintained video slot machines at businesses open to the public across Northern California. Levy and other members of the Gohar organization then split the proceeds from these illegal gambling machines with the owners of the small businesses in which the machines were installed. Levy was responsible for machines placed in businesses in Stockton, Sacramento, Concord, Hayward, Antioch, El Cerrito, San Pablo, Richmond, San Jose, Watsonville, and Salida. Levy collected approximately $3,000 to $4,000 per week from these locations on behalf of the organization.
This case is the product of an investigation by the Federal Bureau of Investigation and California Department of Justice – Bureau of Gambling Control. Assistant U.S. Attorneys Matthew M. Yelovich and Miriam R. Hinman are prosecuting the case.
Levy remains out of custody pending sentencing. Buhbut is set for a status conference on June 1, 2018. Yaniv Gohar and Orel Gohar failed to appear at January court hearings, and warrants have been issued for their arrest.
Levy is scheduled to be sentenced by U.S. District Judge Garland E. Burrell, Jr. on August 3, 2018. Levy faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Violent Crime Federal Prosecution UpdateRead the Press Release
St. Louis, MO – The United States Attorney’s Office will prosecute aggressively violent criminals and drug dealers. Federal prosecution is a powerful tool in the fight to reduce violent crime. Below is a list of defendants prosecuted federally in April:
Marquise Dukes, 28, was indicted by a federal grand jury on one felony count of felon in possession of a firearm and felon in possession of ammunition.
Amanda Jackson, 32, was indicted by a federal grand jury on one felony count of felon in possession of a firearm and felon in possession of ammunition.
Jeremiah Hart, 21, St. Peters, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Maurice Jones, 24, was indicted by a federal grand jury on one felony count of felon in possession of a firearm; possession with intent to distribute a controlled substance; and possession of a firearm in furtherance of a drug trafficking crime.
Kristin Johnson-Arnold, 24, was indicted by a federal grand jury on one felony count of felon in possession of a firearm; possession with intent to distribute a controlled substance; and possession of a firearm in furtherance of a drug trafficking crime.
Calvin Lawson, 32, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Tito Santiago, 33, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Daren Skinner, 32, St. Louis, was indicted by a federal grand jury on one felony count of possession, receipt, transport of firearm or ammunition by prohibited person, felon.
Ricardo Valdespino, 37, was indicted by a federal grand jury on one felony count of distributing 5g or more of actual methamphetamine; felon in possession of a firearm; and possess with intent to distribute cocaine.
Darian Clark, 25, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Robert Goss, 22, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Deandre Johnson, 24, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Matthew McDonald, 33, Alton, IL, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Stacy Minor, 43, was indicted by a federal grand jury on one felony count of felon in possession of a firearm; possession with intent to distribute a controlled substance; and possession of a firearm in furtherance of a drug trafficking crime.
Matthew Stidmon, 31, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Darrell Taylor, 18, St. Louis, was indicted by a federal grand jury on one felony count of receiving a firearm while under indictment.
Anthony Williams, 40, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Chico Buckingham, 45, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Keith Carpentier, 45, was indicted by a federal grand jury on three felony counts of possessing cocaine and two felony counts of felon in possession of a firearm.
James Fields, 20, was indicted by a federal grand jury on one felony count of felon in possession of a firearm; possession with intent to distribute fentanyl; and possession of one or more firearms in furtherance of a drug trafficking crime.
Michael Gladney, 41, St. Louis, was indicted by a federal grand jury on one felony count of armed robbery and possessing a firearm in furtherance of a crime of violence.
Douglas Jones, 39, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Edgar Love, 32, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm; possess with intent to distribute heroin; possess with intent to distribute fentanyl; and possession of a firearm in furtherance of a drug trafficking crime.
Carl Willis, 63, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Eddie Govan, 60, Collinsville, IL, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
William Howard, 25, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Vergil Thomas, 28, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Raymond Willis, 35, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
John Young, 40, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Mario McKnight, 24, St. Louis, was indicted by a federal grand jury on one felony count of felon in possession of a firearm.
Terrill Watt, 32, St. Louis, pled guilty to felon in possession of a firearm.
Terran Eggleston, 32, St. Louis, pled guilty to felon in possession of a firearm.
Daniel Eldridge, 41, Mineral Point, MO, pled guilty to felon in possession of a firearm.
Michael Buckner, 31, St. Louis, pled guilty to felon in possession of a firearm.
Cory R. Smith, 29, Fenton, pled guilty to felon in possession of a firearm.
Clarence Bradford, 29, St. Louis, pled guilty to possession of a firearm in furtherance of a drug trafficking crime.
Jerry B. Jones, 30, Belleville, IL, pled guilty to possession of a firearm in furtherance of a drug trafficking crime.
Derick Bowers, 30, St. Louis, pled guilty to felon in possession of a firearm.
Tayler Griffin, 20, St. Louis, pled guilty to felon in possession of a firearm.
Xaviaire D. Moton, 29, St. Louis, pled guilty to felon in possession of a firearm.
Jeffrey M. Meyer, 40, St. Louis, pled guilty to felon in possession of a firearm.
Frederick Townley, 51, St. Louis, pled guilty to felon in possession of a firearm.
Kerry Caldwell, 54, St. Louis, pled guilty to carjacking and brandishing a firearm in furtherance of a crime.
Luther Hall, 25, St. Louis pled guilty to felon in possession of a firearm.
Michael Lewis, 27, St. Louis, pled guilty to felon in possession of a firearm and possession with intent to distribute fentanyl.
Jermaine Lewis, 37, St. Louis, pled guilty to armed robbery and brandishing a firearm in furtherance of a crime.
Derick Bowers, 30, St. Louis, pled guilty to felon in possession of a firearm.
Kenneth Johnson, 41, St. Louis, pled guilty to felon in possession of a firearm.
Deante Works, 38, pled guilty to felon in possession of a firearm.
Trevon McClelland, 26, St. Louis, pled guilty to felon in possession of a firearm.
Simon Gebregziabher, 29, St. Louis, pled guilty to felon in possession of a firearm and felon in possession of ammunition.
Ramiro Castillo Velenzuela, 29, St. Charles, pled guilty to felon in possession of a firearm.
Tyrell Reed, 31, pled guilty to felon in possession of a firearm.
Darrell R. Gordon, 25, St. Louis, pled guilty to felon in possession of a firearm.
Robert Reinhardt, 53, St. Louis, pled guilty to felon in possession of a firearm and possession with the intent to distribute methamphetamine.
Jason Baker, 41, Imperial, pled guilty to felon in possession of a firearm.
Derek Brown, 40, St. Louis, pled guilty to felon in possession of a firearm; possession with intent to distribute heroin; possession with intent to distribute cocaine; and possession of a firearm in furtherance of a drug trafficking crime.
Edward Crawford, 37, pled guilty to felon in possession of a firearm.
Donald Haynes, 33, St. Louis, pled guilty to felon in possession of a firearm.
Lenard Kelly, 29, St. Louis, was sentenced to 60 months in prison for armed robbery.
Darryl Richard, 44, St. Louis, was sentenced to 57 months in prison for felon in possession of a firearm.
Nisean Davis, 29, St. Louis, was sentenced to 13 months in prison for felon in possession of a firearm.
Devin Jones, 28, St. Louis, was sentenced to 40 months in prison for felon in possession of a firearm.
Olugbenga Folarin, 28, St. Louis, was sentenced to 46 months in prison for felon in possession of a firearm.
Andre Thompson, 35, St. Louis, was sentenced to 62 months in prison for felon in possession of a firearm.
Stephen Redd, 21, was sentenced to 144 months in prison for carjacking and use of a firearm during a crime of violence.
Keonta C. Douglas, 19, was sentenced to 102 months in prison for carjacking and use of a firearm during a crime of violence.
Stacy L. Bonds, 55, Hazelwood, was sentenced to 70 months in prison for felon in possession of a firearm.
Joshua Jackson, 31, St. Louis, was sentenced to 46 months in prison for felon in possession of a firearm.
Walter M. White, 46, St. Louis, was sentenced to 30 months in prison for felon in possession of a firearm.
Arthur Jackson, 40, Florissant, was sentenced to 48 months in prison for felon in possession of a firearm and drug charges.
Demetrius Lewis, 28, St. Louis, was sentenced to 24 months in prison for felon in possession of a firearm.
Leman H. Dobbins, Jr., 52, St. Louis, was sentenced to 84 months in prison for felon in possession of a firearm; possession with the intent to distribute heroin; and possession of a firearm in furtherance of a drug trafficking crime.
Reginald M. Higgins, 44, St. Louis, was sentenced to 90 months in prison for use of a firearm during a crime of violence.
Kenneth Murphy, 35, St. Louis, was sentenced to 42 months in prison for felon in possession of a firearm.
Walter M. White, 46, St. Louis, was sentenced to 30 months in prison for felon in possession of a firearm.
Warren Turner, 27, St. Louis, was sentenced to 18 months in prison for felon in possession of a firearm.
Glenn Hamer, 36, St. Louis, was sentenced to 60 months in prison for felon in possession of a firearm.
Tyrone Armstrong, 44, St. Louis, was sentenced to 46 months in prison for felon in possession of a firearm.
William Lumpkins, 35, St. Louis, was sentenced to 72 months in prison for felon in possession of a firearm and manufacture a controlled substance.
Max Haynes, 26, Florissant, was sentenced to 30 months in prison for felon in possession of a firearm.
Andrew Henderson, 30, St. Louis, was sentenced to 48 months in prison for felon in possession of a firearm.
Avion Allen, 25, St. Louis, was sentenced to 33 months in prison for felon in possession of a firearm.
Laythan Hearton, 22, St. Louis, was sentenced to 37 months in prison for felon in possession of a firearm.
These cases are 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.
U.S. District Court Chief Judge Appoints Stephen G. Dambruch U.S. AttorneyRead the Press Release
PROVIDENCE, RI – United States District Court Chief Judge William E. Smith of the United States District Court for the District of Rhode Island has appointed Stephen G. Dambruch as court appointed United States Attorney for the District of Rhode Island. The appointment, effective today, is made pursuant to 28 U.S.C. § 546.
Mr. Dambruch was appointed Interim United States Attorney by Attorney General Jeff Sessions, effective January 5, 2018, pursuant to 28 U.S.C. § 546, which provides that “the Attorney General may appoint a United States Attorney for the district in which the office of United States Attorney is vacant.” Pursuant to 28 U.S.C. § 546, the appointment by the Attorney General expires after 120 days. Pursuant to 28 U.S.C. § 546, if an appointment expires, the district court may appoint a United States attorney to serve until the vacancy is filled by a Presidential appointee.
A career prosecutor, Mr. Dambruch was appointed as an Assistant United States Attorney in January 2004. Mr. Dambruch was named Criminal Division Chief in February 2007 and First Assistant United States Attorney in January 2014. Mr. Dambruch became Acting United States Attorney on March 13, 2017, pursuant to the Vacancies Reform Act, with the departure of former United States Attorney Peter F. Neronha.
Prior to his beginning his tenure with the United States Attorney’s Office, Mr. Dambruch served as a state prosecutor with the Rhode Island Department of Attorney General for over sixteen years, including appointments as Chief of the Narcotics Prosecution Unit, Chief Prosecutor for Kent, Newport and Washington Counties, and Deputy Chief of the Criminal Division.
Mr. Dambruch is a 1982 graduate of Providence College. He received his law degree from Boston College Law School in 1985.
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Two Romanian citizens extradited to Atlanta to face cyber and fraud charges in connection with a “vishing and smishing” schemeRead the Press Release
ATLANTA – Two international computer hackers, Teodor Laurentiu Costea and Robert Codrut Dumitrescu, were extradited from Romania and arraigned on federal charges of wire fraud conspiracy, wire fraud, computer fraud and abuse, and aggravated identity theft. A federal grand jury returned the 31-count superseding indictment on August 16, 2017. Cosmin Draghici, another co-defendant, is in custody in Romania awaiting extradition to the U.S.
“While in Romania, the defendants allegedly targeted victims throughout the U.S., including in the Northern District of Georgia, stealing personal information and possibly causing millions of dollars in losses,” said U. S. Attorney Byung J. “BJay” Pak. “These extraditions send a strong warning to cybercriminals and fraudsters worldwide, that we, along with our law enforcement partners, will work tirelessly to bring you to justice.”
“Our message to the victims of cyber fraud is that the FBI won’t let geographic boundaries stop us from pursuing and prosecuting the persons who cause them tremendous financial pain,” said David J. LeValley, Special Agent in Charge of FBI Atlanta. “Our message to the perpetrators of these crimes is that cybercriminals cannot hide in the shadows of the internet. We will identify them and bring them to justice.”
According to U.S. Attorney Pak, the charges, and other information presented in court: From approximately October 2011 until February 2014, Costea and Dumitrescu resided in Ploiesti, Romania. An investigation revealed that Costea and Dumitrescu allegedly identified vulnerable computers in the U.S., and installed interactive voice response software that would automatically interact with call recipients. In addition, the defendants allegedly utilized computers in the Atlanta area to install software to initiate thousands of automated telephone calls and text messages to victims in Atlanta and around the country. The messages purported to be from a financial institution and directed victims to call a telephone number due to a problem with their respective financial account.
When victims called the telephone number, they were prompted by the interactive voice response software to enter their bank account numbers, PINs, and full or partial Social Security numbers. The stolen account numbers were stored on the compromised computers and accessed by Costea and Dumitrescu, who then allegedly sold or used the fraudulently obtained information with the assistance of Draghici.
At the time of his arrest in Romania, Costea possessed 36,051 fraudulently obtained financial account numbers. The financial losses from the defendants’ scheme are estimated to be over $18 million.
Teodor Laurentiu Costea, 41, Robert Codrut Dumitrescu, 40, and Cosmin Draghici, 28 are all from Ploiesti, Romania. The charges result from the defendants’ alleged “vishing” and “smishing” attacks from Romania. “Vishing” is a type of phishing scheme that communicates a phishing message, that is, a message that purports to be from a legitimate source, in this case the victims’ banks, through a voice recording. “Smishing” is similar to “vishing,” but communicates a phishing message through text messages.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
This case is being investigated by the FBI.
Assistant U.S. Attorney Michael Herskowitz is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Two Individuals Charged with Advance Fee Scheme that Defrauded over $2 Million from Nigerian CompanyRead the Press Release
Two individuals have been charged in connection with a scheme to defraud a Nigerian company of over $2 million.
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, and Drew J. Breakspear, Commissioner, Florida Office of Financial Regulation (OFR), made the announcement.
Vicente Jesus Zubero, 40, of Miami, Florida, and Oyeyemi Olatunji Owagboriaye, 62, of Skokie, Illinois, were charged by indictment with one count of conspiracy to commit wire fraud and three counts of wire fraud, in violation of Title 18, United States Code, Sections 1343 and 1349.
As alleged in the unsealed indictment, Zubero, through his corporation, the Consortium for International Development (CID), purported to broker loans for clients. In August 2014, Zubero and Owagboriaye induced a company headquartered in Nigeria to provide approximately $2.1 million upfront in order to obtain a loan from CID. The $2.1 million was then used for Zubero and Owagboriaye’s personal use and benefit, in violation of the company’s agreement with CID.
The indictment further alleges that in order to facilitate the scheme, Zubero made it appear as if his girlfriend and others worked for CID as executives, when, in fact they did not. Zubero also made materially false statements to the company, including that the money would be placed into a secure escrow account, and that the money would be used to generate the company’s loan.
Each count of conspiracy and wire fraud carries a maximum term of twenty years in prison.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty in a court of law.
Mr. Greenberg commended the investigative efforts of the FBI and OFR. This case is being prosecuted by Assistant U.S. Attorney Roger Cruz.
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.
The United States District Court for the Eastern District of Washington Appoints Joseph H. Harrington to Serve as United States AttorneyRead the Press Release
Today, by way of the Vacancies Reform Act, the United States District Court for the Eastern District of Washington appointed Joseph H. Harrington as the United States Attorney for the Eastern District of Washington. The Eastern District of Washington comprises the twenty counties east of the crest of the Cascade Mountains.
Harrington said, “I am humbled that the District Court extended me the honor of serving as the U.S. Attorney: I consider it a great honor and privilege. I look forward to continuing to work with the outstanding, dedicated Assistant U.S. Attorneys and staff in this office, together with our federal, state, county, local, and tribal law enforcement partners, to carry on the remarkable work being accomplished in the Eastern District of Washington. The office continues to ‘punch above its weight’”.
Harrington served as the Acting U.S. Attorney, then as Interim U.S. Attorney, since March 10, 2017. He worked for the U.S. Securities and Exchange Commission in Washington D.C. before joining the office in 1990. During his tenure in the office he has held the positions of First Assistant U. S. Attorney, Criminal Chief, Deputy Criminal Chief, Anti-Terrorism Advisory Coordinator, and Health Care Fraud Coordinator. Harrington was involved with the prosecutions of: Kevin W. Harpham, an avowed white supremacist who planted a sophisticated remotely-controlled IED along the route of the Martin Luther King, Jr. Day Unity March in Spokane; the Phineas Priest domestic terrorism case involving bank robberies and bombings of a Planned Parenthood office and a Spokane newspaper facility; and the Karl F. Thompson / Otto Zehm civil rights case. In addition to his broad-ranging criminal practice, Harrington has also defended the United States in civil cases involving medical malpractice tort claims, employment discrimination allegations, and the like. He has argued dozens of cases in the Ninth Circuit Court of Appeals.
Harrington received his J.D. from Gonzaga University in 1986, where he was a Thomas Moore Scholar (full academic scholarship) and served as the Editor-in- Chief of the Gonzaga Law Review. He holds a B.A. in Mathematics and a B.S. in Engineering.
Southern District of Georgia Announces Results of Recent Criminal and Civil Procurement Fraud ProsecutionsRead the Press Release
AUGUSTA and SAVANNAH, GA: As part of a new emphasis on procurement fraud enforcement within the Southern District of Georgia, the United States Attorney’s Office for the Southern District of Georgia announced the results of a series of recent procurement fraud prosecutions. Over the past several months, the strike force’s efforts resulted in five guilty pleas and twelve civil settlements, including the following publically available actions:
- United States of America v. Dwayne Fulton (1:17-CR-35)
- United States of America v. Calvin Lawyer (1:17-CR-35)
- United States of America v. Anthony Roper (1:17-CR-35)
- United States of America v. Audra Roper (1:17-CR-35)
- United States ex rel. Major Contracting Services, Inc. v. Military Training Solutions, LLC and ADCO Holdings, Inc., et al. (4:16-cv-115)
- United States of America v. Robert Obradovich (4:18-CR-47)
These prosecutions and civil settlements with the named individuals and entities, as well as others, stemmed from a wide variety of fraudulent conduct, including bribery of public officials, illegal kickbacks, illegal arrangements between large contracting companies and certified small or 8(a) businesses acting as “front” companies, and billing for services not rendered. Each of the individuals who has pled guilty awaits sentencing. The total financial recovery for the United States thus far has exceeded $7.4 million. Several of these investigations remain ongoing.“The Southern District of Georgia is the proud home of several major military installations that serve a vital role both in our national defense and the district’s local economy,” said United States Attorney Bobby L. Christine. “Those who do business with these installations should be on notice – ripping off the United States will not be tolerated! This office will bring to bear the full weight of our resources to hold fraudsters accountable.”
The joint strike force that led to these convictions and settlements involved agents, investigators, and auditors from the Department of Justice, Defense Criminal Investigative Service, Army Criminal Investigation Command (Major Procurement Fraud Unit), Naval Criminal Investigative Service, the Small Business Administration Office of Inspector General. Significant and critical assistance was also provided by civilian and military personnel from the Army, Navy, and Air Force stationed at affected military installations.
“The American public expects the Department of Defense (DoD) to spend limited taxpayer funds efficiently and economically. Bribery and other corrupt behavior by public officials and defense contractors diverts and wastes precious dollars intended to provide critical products and services for our Warfighters. These results demonstrate the effectiveness of investigative efforts by the Defense Criminal Investigative Service to protect the integrity of all DoD programs,” said Special Agent in Charge John F. Khin, Southeast Field Office.
“These settlements stand as proof of the tenacity of our special agents,” said Frank Robey, director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “It is important for those who conspired to profit from illegal payments take responsibility for their actions. The settlements hold the defendants accountable and send a message to others that these violations will be taken seriously.”
“Our partnership with the joint procurement fraud strike force ensures fair and open competition for U.S. Government contracts which support the training and readiness of Marine Corps personnel,” said H. Andrew Goodridge, Special Agent in Charge, NCIS Carolinas Field Office.
“SBA OIG will aggressively investigate allegations of fraud involving SBA’s preferential contracting programs, to include false statements made to gain access to contracting opportunities set aside for small businesses,” said SBA OIG Eastern Region Special Agent-in-Charge Kevin Kupperbusch. “SBA’s preferential contracting programs are intended to promote the economy and grow and develop small businesses across the nation. I want to thank the U.S Attorney’s Office and our law enforcement partners for their dedication and hard work throughout these investigations.”
SBA’s General Counsel, Christopher Pilkerton said, “These successful prosecutions demonstrate the tremendous results achieved through the combined efforts of federal agencies to uncover and forcefully respond to procurement fraud. SBA is strongly committed to identifying and aggressively pursuing instances of fraud perpetrated by those participating in SBA's procurement programs.”
The United States was represented by Assistant United States Attorneys Brian T. Rafferty, Shannon H. Statkus, J. Thomas Clarkson, Matthew A. Josephson, and Jonathan A. Porter. Any claims resolved by the civil settlement agreements are allegations only and there has been no determination of liability.
Each of the civil settlements resolved potential liability under the False Claims Act. Under the False Claims Act, whistleblowers can be entitled to a portion of the amount recovered by the United States. The United States Attorney’s Office also reminds contractors that businesses and individuals that self-disclose potential violations can be eligible for significantly reduced penalties. If you have any information regarding potential procurement fraud, please contact Assistant United States Attorney J. Thomas Clarkson at (912) 201-2601.
For additional information about this press release, please contact First Assistant United States Attorney David Estes at (912) 652-4422.
Shreveport felon sentenced to 41 months in prison for possessing a handgun, ammunitionRead the Press Release
SHREVEPORT, La. – United States Attorney David C. Joseph announced that a Shreveport felon was sentenced Thursday to three years and five months in prison for possessing a handgun with an obliterated serial number.
Jarvis L. Alexander, 33, of Shreveport, was sentenced by U.S. District Judge S. Maurice Hicks Jr. on one count of possession of a firearm by a convicted felon. He was also sentenced to three years of supervised release. According to the January 12, 2018 guilty plea, a Shreveport Police officer was attempting to execute an arrest warrant at a Canal Street residence when the officer came upon Alexander sleeping in a car in the driveway. The officer asked Alexander to step out of the car and noticed a black and silver handgun in the driver’s door compartment. The loaded Smith and Wesson SD 40 caliber handgun also had an obliterated serial number. Alexander has a previous felony conviction in Caddo Parish.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The ATF and Shreveport Police Department conducted the investigation. Assistant U.S. Attorney Tiffany E. Fields prosecuted the case.
Sacramento Man Sentenced for Bank Fraud and Identity Theft Scheme Using Stolen U.S. MailRead the Press Release
SACRAMENTO, Calif. — U.S. District Judge Garland E. Burrell Jr. sentenced a Sacramento man today for his participation in a scheme that involved stealing and deconstructing U.S. Postal Service locks to reverse engineer keys in order to steal U.S. Mail, steal identities and defraud financial institutions, U.S. Attorney McGregor W. Scott announced.
Billee Vang, 27, was sentenced to two years and eight months in prison and ordered to pay $5,733 in restitution. On November 17, 2017, Vang and his co-defendant, Dang Vue, 28, of Sacramento pleaded guilty to bank fraud, aggravated identity theft, theft of stolen U.S. mail, stealing and reproducing postal service locks and keys, and unlawful possession of at least five identification documents for fraudulent purposes.
According to court documents, between January 13, 2017, and May 12, 2017, Vang and Vue stole mail throughout Sacramento and Placer Counties, including neighborhoods in Roseville, Elk Grove, and Sacramento. As part of their criminal scheme, the defendants stole Postal Service locks and used them to reverse engineer keys to open neighborhood mailbox units and steal mail from them.
Vang and Vue used the stolen mail, including checks and identification documents, to take over victim bank and credit accounts. Additionally, they used and attempted to use credit and debit cards, credit card convenience checks, and personal checks that had been stolen from postal customers to conduct unauthorized transactions at the expense of federally insured financial institutions.
On May 12, 2017, when arrested in Elk Grove, the defendants were found to possess numerous reverse engineered counterfeit keys, metal filing tools, pry bars and other burglary tools, and stolen U.S. mail from neighborhood mailbox units. On April 27, 2018, Vue was sentenced to three years and nine months in prison and ordered to pay $5,733 in restitution.
This case was the product of an investigation by the U.S. Postal Inspection Service with assistance from Elk Grove Police Department, Sacramento County Sheriff’s Office, and Roseville Police Department. Assistant U.S. Attorney Michelle Rodriguez prosecuted the case.
Roseboro Man Charged with Carjacking on Interstate 95Read the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., announced that in federal court, before United States Magistrate Judge Robert T. Numbers, II, RAYMOND LEE BRYANT, JR, of Roseboro, North Carolina, was charged in a federal Criminal Complaint with carjacking and carrying and brandishing a firearm during and in relation to the carjacking.
According to the affidavit attached to the Criminal Complaint, BRYANT, is alleged to have committed multiple carjackings on Interstate 95 in Dunn, North Carolina on May 3, 2018. BRYANT is alleged to have approached a semi-truck and trailer, forced the driver and passenger out of the truck at gunpoint after firing a round and attempted to drive the truck away. As BRYANT was backing up the truck, it jack-knifed which blocked the northbound lanes of Interstate 95. BRYANT exited the truck, attempted to carjack another semi-truck and trailer however the driver of that truck exited the vehicle as he saw BRYANT approach. BRYANT then approached a third vehicle, had a confrontation with the two occupants, the two occupants fled the vehicle and BRYANT sped from Harnett County in the truck heading north on Interstate 95.
The charge and allegations contained in the Criminal Complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty in a court of law.
This case is part of the Take Back North Carolina Initiative, which was newly implemented by United States Attorney’s Office for the Eastern District of North Carolina. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the North Carolina State Highway Patrol and the Harnett County Sheriff’s Office investigated this case.
Randolph Man Sentenced for Drug TraffickingRead the Press Release
BOSTON – A Randolph man, who was involved in drug trafficking with his father and others, was sentenced yesterday in federal court in Boston.
Larry Lovell Bailey, 42, was sentenced by U.S. District Court Judge Richard G. Stearns to 46 months in prison and three years of supervised release. Judge Stearns also ordered Bailey to forfeit $300,000, a vehicle and other property. In March 2016, Bailey pleaded guilty to possession of cocaine base (crack cocaine) with intent to distribute. Bailey, along with 53 members and associates of the Columbia Point Dogs street gang, was arrested in June 2015 on various racketeering, drug trafficking, and firearms charges.
Bailey was involved with his father, Larry Bailey, in the distribution of cocaine base and cocaine. The two used two Boston businesses – Finest Cuts barbershop on Blue Hill Avenue and Bailey’s Laundromat on Harrison Avenue – to distribute cocaine and cocaine base. During the investigation, law enforcement determined that Bailey was cooking cocaine base at his residence in Randolph. A search warrant executed at Bailey’s residence resulted in the seizure of cocaine base, powder cocaine, drug trafficking paraphernalia, a loaded .40 caliber handgun and over $300,000 in cash.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Albert Angelucci, Acting Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; John Gibbons, U.S. Marshal for the District of Massachusetts; Suffolk County District Attorney Daniel F. Conley; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Suffolk County Sheriff Steven W. Tompkins; Boston Police Commissioner William Evans; and Commissioner Thomas Turco of the Massachusetts Department of Correction, made the announcement.
Quad Cities Men Found Guilty of Crack Cocaine and Firearms OffensesRead the Press Release
DAVENPORT, Iowa - On May 3, 2018, following a three-day jury trial, Bruce Zachary Pugh, age 26, Darren Lamont Warren, age 22, and Desharrlequez Malike Vesey, age 23, were each found guilty of conspiracy to distribute crack cocaine, carrying a firearm during and in relation to a drug trafficking crime, and felon in possession of a firearm, announced United States Attorney Marc Krickbaum. Additionally, Warren and Vesey were convicted of possession of crack cocaine with the intent to distribute.
Evidence was presented at trial that the Defendants occupied a rented Jeep Compass at a gas station in the 1000 block of West River Drive in Davenport. While at that location, the rear seat occupant, Pugh, waived a black pistol at another man. The Davenport Police were alerted as to the threat and the Jeep was stopped by officers. The driver, Warren, and the front passenger, Vesey, fled and Pugh was arrested while attempting to exit the vehicle.
Davenport Police Officers recovered crack cocaine; a box of plastic sandwich bags; two digital scales, cash; and a loaded black Hi-Point 9mm pistol from the vehicle. Evidence at trial showed in the minutes preceding the threat, the Defendants were engaged in conduct consistent with the distribution of crack cocaine.
The Defendants’ sentencings are scheduled for September 12, 2018, before United States District Court Judge John A. Jarvey.
The Davenport Police Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this matter. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Phoenix Spice and Bath Salts Manufacturer SentencedRead the Press Release
PHOENIX – This week, Juan Mark Sayegh, 44, of Phoenix, Ariz., was sentenced by U.S. District Judge David G. Campbell to 48 months’ imprisonment and ordered to forfeit approximately $1.7 million in cash, real property, and other assets. Sayegh had previously pleaded guilty to conspiracy to distribute a controlled substance analogue and conspiracy to commit money laundering.
A controlled substance analogue is a substance that is intended for human consumption and is substantially similar in chemical structure and pharmacological effect, or intended effect, to any drug scheduled under the federal Controlled Substances Act, like cocaine, methamphetamine, JWH-018, Methcathinone, or Methylone.
Sayegh owned and operated Greenlight Distribution in Phoenix, Ariz., from July 2010 through July 2012. Greenlight manufactured and distributed designer synthetic drugs. Specifically, Greenlight manufactured and distributed synthetic cannabinoid products (commonly referred to as “spice”) under the brand names Mary Jane’s Potpourri and Mary Jane’s Private Reserve. Greenlight also manufactured and distributed synthetic cathinone products (commonly referred to as “bath salts”) under the brand names Go Fast Carpet Deodorizer and Quick Clean Carpet Deodorizer. These synthetic drugs were manufactured with chemicals imported from China and were designed to be smoked or ingested in order to get users high. These designer drugs were intentionally and falsely mislabeled as innocuous household products that were “not for human consumption” in order to circumvent federal consumer and drug laws. The products were sold to stores and individuals across the United States for great profit.
The operations at Greenlight ceased on July 25, 2012, when the Drug Enforcement Administration executed a search warrant at several locations associated with Greenlight and its employees as part of Operation Logjam. Operation Logjam was a U.S. Department of Justice -coordinated investigation of synthetic drug manufacturers and distributors across the United States.
The investigation in this case was conducted by the Drug Enforcement Administration’s Phoenix, Milwaukee, and Kansas City field offices, the Internal Revenue Service Criminal Investigation Phoenix field office, and the Johnson County Sheriff’s Office in Kansas under the Department of Justice’s Organized Crime Drug Enforcement Task Force (OCDETF) Program. The prosecution was handled by Lacy Cooper, D.J. Pashayan, and Mark Wenker, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-16-00506-PHX-DGC (DKD)
RELEASE NUMBER: 2018-057_ Sayegh
# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Philadelphia Man Charged with Failing to Register as a Sex OffenderRead the Press Release
James Samuel McKethan, 51, of Philadelphia, and formerly of Baltimore, Maryland, was charged today by indictment with failure to register as a sex offender, announced U.S. Attorney William M. McSwain.
McKethan was previously convicted of 4th degree sexual contact in Maryland and, as a result of his conviction, is required to register as a sex offender. When he failed to update his sex offender registration as required, a warrant was issued for his arrest. The U.S. Marshal Service located him in Philadelphia after it was discovered that he had been residing and working in Pennsylvania for all four quarters of 2017, but had failed to register his sex offender status with the Pennsylvania State Police.
If convicted, the defendant faces 10 years’ imprisonment, 3 years’ supervised release, a $250,000 fine, and $100 special assessment.
The case was investigated by the U.S. Marshal Service and is being prosecuted by Assistant U.S. Attorney Michelle Rotella.
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 Attorney’s 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.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Oxford Restaurant to Make Changes to Comply with Americans with Disabilities ActRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that the U.S. Attorney’s Office has reached a settlement agreement with Fritz’s Snack Bar in Oxford to resolve allegations that the restaurant was not operating in compliance with the Americans with Disabilities Act of 1990 (“ADA”).
The settlement agreement resolves an ADA complaint filed by an individual with disabilities alleging that Fritz’s Snack Bar was not accessible for individuals with physical disabilities. The restaurant is in the process of making the changes required by the settlement agreement, including adding accessible parking, ensuring that there is an accessible entry route to the restaurant, increasing the number of accessible dining seats within the restaurant and in the patio area, ensuring that the patio area has an accessible entrance, and ensuring that the surface of the patio has a stable, firm and slip resistant surface so that it is accessible for individuals with mobility disabilities. Fritz’s Snack Bar will continue to make improvements over the next nine months.
Under federal law, private entities that own or operate places of “public accommodation,” including restaurants, are prohibited from discriminating on the basis of disability. The ADA authorizes the U.S. Department of Justice to investigate complaints and undertake periodic reviews of compliance of covered entities. The Justice Department is also authorized to commence a civil lawsuit in federal court in any case that involves a pattern or practice of discrimination or that raises issues of general public importance, and to seek injunctive relief, monetary damages, and civil penalties.
U.S. Attorney Durham noted that the owners of Fritz’s Snack Bar have worked cooperatively and collaboratively with the U.S. Attorney’s Office to address the ADA issues without litigation.
“The Americans with Disabilities Act ensures that individuals are able to access and enjoy the state’s restaurants and other places of public accommodation,” stated U.S. Attorney Durham. “Our Office is committed to enforcing the ADA, which requires businesses to appropriately serve the diverse populations of patrons who live, work, and visit Connecticut. We appreciate the cooperation of the owners of Fritz’s Snack Bar and their commitment to increase the accessibility of their restaurant.”
Any member of the public who wishes to file a complaint alleging that any place of public accommodation or public entity in Connecticut is not accessible to persons with disabilities may contact the U.S. Attorney’s Office at 203-821-3700.
Additional information about the ADA can be found at www.ada.gov, or by calling the Justice Department’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TTY). More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
This matter was handled by Assistant U.S. Attorney Jessica H. Soufer of the District of Connecticut in coordination with the Disability Rights Section of the U.S. Department of Justice Civil Rights Division.
Owner of Colorado Martial Arts Academy Charged with Tax CrimesRead the Press Release
A federal grand jury sitting in Denver, Colorado has returned an indictment, which was unsealed yesterday, charging an Arvada, Colorado resident with failure to pay over payroll taxes to the Internal Revenue Service (IRS) and filing false corporate tax returns, announced Principal Deputy Assistant Attorney Richard E. Zuckerman of the Justice Department’s Tax Division.
According to the indictment, Marlene Seo owned and operated National Martial Arts Academy. From 2011 through 2013, Seo allegedly directed deposits of income from her martial arts school into bank accounts that she did not disclose to her bookkeeper and accountants, which resulted in her underreporting the business’s gross receipts on corporate tax returns for tax years 2011, 2012, and 2013.
The indictment further alleges that from 2012 through June 2014 Seo failed to pay the IRS payroll taxes that she withheld from employees’ paychecks, despite her obligation to do so.
Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Anahi Cortada and Lisa L. Bellamy, who are prosecuting the case.
Owner of Bus Repair and Transportation Company Found Guilty in White Plains Federal Court of Fraud, Bribery, and TheftRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that RICHARD BREGA, the former owner of Brega D.O.T. Maintenance Corp. in Rockland County, was found guilty by a federal jury in White Plains of fraud, bribery, and theft of government property. The convictions were for BREGA’s billing the Rockland Board of Cooperative Educational Services (“Rockland BOCES”) for maintenance of school buses that was never performed, and bribery of a Rockland BOCES official. The convictions resulted from a three-week trial before the United States District Judge Kenneth M. Karas. BREGA is scheduled to be sentenced by Judge Karas on October 17, 2018.
U.S. Attorney Geoffrey S. Berman said: “As a unanimous jury found, Richard Brega engaged in fraud, bribery, and theft of government property. The scheme not only defrauded Rockland school districts and the federal government by billing for bus maintenance work that was not performed, but it also put children at risk of riding unsafe buses. Now Brega awaits sentencing for his crimes.”
The evidence at trial showed, among other things, the following:
Rockland BOCES serves eight school districts in Rockland County. Among the services that Rockland BOCES offers to its students – particularly children with special physical, intellectual, and emotional needs – is transportation, for which it has a fleet of buses and other vehicles (hereinafter collectively referred to as “Rockland BOCES buses” and “bus fleet”), some of which are specially equipped for students with physical disabilities. Rockland BOCES receives federal funding each year, often in excess of $1 million.
BREGA owned and controlled vehicle repair and transportation companies in Rockland County, including Brega D.O.T. Maintenance Corp. (“Brega DOT”), a fleet maintenance repair shop. From in or about 2008 or 2009, through in or about 2015, Brega DOT provided vehicle repair service and maintenance for Rockland BOCES bus fleet, including regular preventive maintenance (“Preventive Maintenance”), which is supposed to involve a thorough and detailed inspection and testing of the buses at Brega DOT’s facility, designed to ensure that the buses are defect-free and safe to operate with children aboard. Brega DOT would fix any problems with the buses that it found during Preventative Maintenance inspections before releasing the buses back to Rockland BOCES. Brega DOT also created invoices documenting the work done and provided those invoices to Rockland BOCES for payment. Rockland BOCES’ director of transportation, William Popkave, would then approve the invoice as accurately stating work that was performed on Rockland BOCES buses, and Rockland BOCES would mail payment to Brega DOT.
From in or about 2012 through in or about 2014, BREGA stole money from Rockland BOCES by, among other things, billing Rockland BOCES for Preventative Maintenance inspections that were never performed. To do so, BREGA directed his employees to prepare fraudulent invoices, as well as fraudulent supporting documentation, giving the false appearance that his company had performed regular Preventive Maintenance inspections on certain buses, when in fact those buses were not even brought to Brega DOT and Preventative Maintenance inspections were not performed.
To create the fraudulent invoices, and to obtain payment from Rockland BOCES for work that was never performed, BREGA bribed Popkave – who oversaw upkeep and maintenance of its buses – with tens of thousands of dollars’ worth of free personal vehicle repairs. Popkave sent BREGA lists of buses and their mileages so that BREGA could create fraudulent invoices and supporting documentation, and thereafter approved payment of the fraudulent invoices at Rockland BOCES, even though Popkave and BREGA knew that the buses had not even been to Brega DOT on the days for which Brega DOT billed Rockland BOCES, and had not received Preventative Maintenance inspections.
* * *
BREGA, 50, of Rockland County, was convicted of three counts: (1) mail fraud, which carries a maximum potential penalty of 20 years in prison; (2) bribery concerning a program receiving federal funds, which carries a maximum potential penalty of 10 years in prison; and (3) theft concerning a program receiving federal funds, which carries a maximum potential penalty of 10 years in prison.
Popkave, 62, who currently resides in Florida, pled guilty before Magistrate Judge Judith C. McCarthy on January 24, 2017, to five counts: (1) conspiracy to commit mail fraud, which carries a maximum potential penalty of 20 years in prison; (2) mail fraud, which carries a maximum potential penalty of 20 years in prison; (3) theft concerning a program receiving federal funds, which carries a maximum potential penalty of 10 years in prison; (4) bribery concerning a program receiving federal funds, which carries a maximum potential penalty of 10 years in prison; and (5) obstruction of justice, which carries a maximum potential penalty of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as the sentencings of the defendants would be determined by the judge. BREGA will be sentenced on October 17, 2018. Popkave will be sentenced at a future date.
Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation, the Rockland County District Attorney’s Office, and the United States Department of Transportation Office of Inspector General. Mr. Berman also thanked the United States Department of Education, Office of Inspector General, for its assistance.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Michael D. Maimin and Benjamin Allee are in charge of the prosecution.
New York Resident Pleads Guilty to Conspiracy to Defraud the United StatesRead the Press Release
A Brooklyn, New York, resident pleaded guilty today to conspiracy to defraud the government and theft of public funds, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents, Akim Martin, also known as Akim Davis, 41, conspired with others to file fraudulent tax returns for companies and individual taxpayers. As part of the scheme, from March 2009 through March 2013, Martin and his coconspirators filed false tax returns in the names of businesses they purportedly owned and operated, claiming phony deductions for wages paid to employees that did not exist. Martin and his conspirators, in turn, then filed fraudulent tax returns in the names of the employees claiming bogus tax refunds.
Martin and his conspirators obtained the personal identifying information (PII) to use on the employees’ false tax returns by stealing it and by recruiting individuals to provide their information in exchange for a cut of the proceeds. Martin cashed and deposited fraudulently obtained refund checks into bank accounts that he controlled and spent the money on his personal expenses. Martin’s conduct resulted in a loss exceeding $550,000.
Sentencing is scheduled for August 24, 2018, before U.S. District Court Judge Carol Bagley Amon. Martin faces a statutory maximum sentence of 15 years in prison. He also faces a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Jason M. Scheff and Ann M. Cherry, who are prosecuting these cases.
Monroe felon pleads guilty to possessing pistolRead the Press Release
MONROE, La. – United States Attorney David C. Joseph announced that a Monroe resident pleaded guilty Thursday to illegal possession of a loaded pistol at his residence.
Daryl Nelson, 49, of Monroe, pleaded guilty before U.S. Magistrate Judge Karen L. Hayes to one count of possession of a firearm by a convicted felon. The plea will be final when accepted by U.S. District Judge S. Maurce Hicks Jr. According to the guilty plea, Monroe police executed a search warrant on March 28, 2017 and found Nelson alone in bed with a loaded Ruger, Model P85, 9-mm caliber pistol. The firearm belonged to Nelson, and he has been convicted of multiple felonies. During the same search, officers found a loaded Glock, model 26, 9 mm caliber pistol that belonged to codefendant Santron Jones, 33, of Monroe. Jones has been previously convicted to two drug felonies and is not allowed to possess a handgun.
The defendants face up to 10 years in prison, three years of supervised release, a $250,000 fine and forfeiture of the seized weapons. The court set sentencing for August 29, 2018. Jones pleaded guilty February 15, 2018 to the firearms count. The court set sentencing for May 21, 2018.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The ATF and Monroe Metro Narcotics conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
Manhattan U.S. Attorney Announces Extradition of Four Mexican Nationals for International Sex Trafficking OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Acting Assistant Attorney General John M. Gore of the Civil Rights Division, and Angel M. Melendez, Special Agent in Charge of the New York Field Office of ICE’s Homeland Security Investigations (“HSI”), announced the extradition of EFRAIN GRANADOS-CORONA, a/k/a “Chavito,” a/k/a “Cepillo,” EMILIO ROJAS-ROMERO, ALAN ROMERO-GRANADOS, a/k/a “El Flaco,” and PEDRO ROJAS-ROMERO, who are charged together with RAUL ROMERO-GRANADOS, a/k/a “Chicarcas,” a/k/a “El Negro,” ISAAC LOMELI-RIVERA,” a/k/a “Giro,” JULIO SAINZ-FLORES, a/k/a “Rogelio,” and JUAN ROMERO-GRANADOS, a/k/a “Chegoya,” a/k/a “El Guero,” with sex trafficking offenses in a 23-count Superseding Indictment (the “Indictment”) in the United States District Court for the Southern District of New York. EFRAIN GRANADOS-CORONA and EMILIO ROJAS-ROMERO were extradited to the United States from Mexico on April 26, 2018, and presented before United States Magistrate Judge Stewart D. Aaron on April 27, 2018. ALAN ROMERO-GRANADOS and PEDRO ROJAS-ROMERO were extradited to the United States from Mexico on May 2, 2018, and presented yesterday before United States Magistrate Judge Debra Freeman. This case is assigned to United States District Judge Andrew J. Carter, Jr.
The Indictment, which was returned under seal on September 15, 2016, alleges that the defendants are members of an international sex trafficking organization that exploited and trafficked adult and minor women in Mexico and in the United States from at least 2000 to 2016. Members of the defendants’ sex trafficking organization, which operated largely as a family business, used false promises, physical and sexual violence, and threats to force and coerce adult and minor women to engage in commercial sex for the organization’s profit in both Mexico and the United States.
As part of a coordinated bilateral law enforcement action, six defendants located in Mexico – EFRAIN GRANADOS-CORONA, EMILIO ROJAS-ROMERO, ALAN ROMERO-GRANADOS, PEDRO ROJAS-ROMERO, JULIO SAINZ-FLORES, and JUAN ROMERO-GRANADOS – were arrested in Mexico and taken into custody by Mexican authorities pursuant to provisional arrest warrants requested by the United States in August 2016. As noted, the first four of these defendants were extradited to the United States from Mexico within the past week. The fifth of these defendants, JULIO SAINZ-FLORES, was previously extradited to the United States from Mexico on June 8, 2017, and was presented in Manhattan federal court before Chief United States Magistrate Judge Gabriel W. Gorenstein on June 9, 2017. JUAN ROMERO-GRANADOS remains in Mexico pending extradition proceedings. The two defendants who were arrested in the United States, RAUL ROMERO-GRANADOS and ISAAC LOMELI-RIVERA, were presented in Manhattan federal court on October 27, 2016, before United States Magistrate Judge Kevin Nathaniel Fox.
U.S. Attorney Geoffrey S. Berman said: “Sex trafficking is a heinous crime that violates both the rule of law and the most basic standards of human dignity. These defendants allegedly deprived women and girls of their freedom, and forced them into prostitution against their will. The scope of devastation these defendants allegedy inflicted on countless victims is beyond comprehension. But now they face significant criminal charges in an American court, and will have to answer for their allegedly reprensible actions. Our office is dedicated to combatting this demoralizing crime and helping survivors reclaim their lives.”
Acting Assistant Attorney General John M. Gore of the Civil Rights Division said: “The Civil Rights Division will not tolerate anyone violating an individual’s rights and freedoms through sex trafficking. We will continue to work with our law enforcement partners to vindicate the rights of victims and survivors of sex trafficking by dismantling transnational organized trafficking enterprises and putting an end to these egregious civil rights violations.”
HSI Special Agent in Charge Angel M. Melendez said: “These four individuals were transported more than 2,000 miles from Mexico to be held accountable for the callous criminal actions alleged in this case. Those extradited, along with others, allegedly operated a family business centered on making money from exploiting females they forced into sex slavery. Now these traffickers will face justice where they allegedly made their income, right here in New York. Human Trafficking remains a priority for HSI, whose primary focus is to rescue victims and release them from the grip of their captors.”
As alleged in the Indictment:[1]
EFRAIN GRANADOS-CORONA, RAUL ROMERO-GRANADOS, ISAAC LOMELI-RIVERA, JULIO SAINZ-FLORES, JUAN ROMERO-GRANADOS, ALAN ROMERO-GRANADOS, PEDRO ROJAS-ROMERO, and EMILIO ROJAS-ROMERO, the defendants, are members of an international sex trafficking organization (the “STO”). Many of the members of the STO are related by blood, marriage, and community. For example: EFRAIN GRANADOS-CORONA is the uncle of RAUL ROMERO-GRANADOS, ISAAC LOMELI-RIVERA, JUAN ROMERO-GRANADOS, and ALAN ROMERO-GRANADOS; PEDRO ROJAS-ROMERO and EMILIO ROJAS-ROMERO are brothers; JUAN ROMERO-GRANADOS and ALAN ROMERO-GRANADOS are also brothers; and ISAAC LOMELI-RIVERA is RAUL ROMERO-GRANADOS’s brother-in-law.
Between 2000 and the present, members of the STO (the “Traffickers”) have used false promises, physical and sexual violence, threats of the same, lies, and coercion to force and coerce adult and minor women (the “Victims”) to work in prostitution in both Mexico and the United States.
In most cases, a Trafficker entices a Victim – frequently a minor – in Mexico. The Trafficker then uses multiple means to isolate the Victim from her family. In some cases, the Trafficker uses romantic promises to induce the Victim to leave her family and live with him. In other cases, the Trafficker rapes the Victim, making it difficult for her to return to her family due to the associated stigma of the rape. Once a Victim is separated from her family, the Trafficker frequently monitors her communications, keeps her locked in an apartment, leaves her without food, and engages in physical or sexual violence against the Victim. Traffickers often tell Victims that the Traffickers owe a significant debt and that the Victim must work in prostitution to assist in repaying the debt. Traffickers typically begin forcing the Victims to work in prostitution in Mexico, frequently in a neighborhood of Mexico City known as “La Merced.” Victims are often required to see at least 20 to 40 customers per day. Traffickers monitor the number of clients a Victim sees by surveilling the Victim, communicating with brothel workers, and by counting the number of condoms provided to a Victim. Traffickers typically require the Victims to turn over all of the prostitution proceeds to the Traffickers.
After a Victim has worked in prostitution in Mexico for some time, Traffickers typically arrange for the Victim to be smuggled into the United States. Members of the STO assist one another in making smuggling arrangements. In many cases, multiple Traffickers and multiple Victims are smuggled into the United States together. In other cases, one Trafficker may remain in Mexico while arranging for a Victim to be smuggled together with another Trafficker and other Victims.
Once in the United States, the members of the STO generally maintain their Victims at one of several shared apartments in New York City. Victims living in the same apartment are frequently forbidden to communicate with one another. Once in the United States, Traffickers continue to use physical and sexual violence, threats of the same, lies, and coercion to force the Victims to work in prostitution.
In most cases, the Trafficker or another member of the STO provides a Victim with contact information with which to find work. The Victims typically work weeklong shifts either in a brothel, or in a “delivery service.” In a delivery service, the Victim is delivered to a customer’s home by a “driver.” These brothels and delivery services are located both within New York and in surrounding states, including, but not limited to, Connecticut, Maryland, Virginia, New Jersey, and Delaware.
Generally, each customer pays $30-35 for 15 minutes of sex. Of that, half of the money typically goes to the driver (in the case of a delivery service) or to the brothel. The other $15 goes to the Victim, who is then typically forced to give all of the proceeds to the Trafficker. When a Trafficker is unavailable, a Victim may also give the proceeds to another member of the STO.
The Traffickers then frequently send, or have their Victims send, some of the prostitution proceeds to Traffickers’ family members and associates in Mexico by wire transfer. Such transfers provide financial assistance to the Traffickers’ families and provide financial support to the Traffickers themselves if they return to Mexico.
* * *
Since 2009, the Department of Justice – through the Civil Rights Division’s Human Trafficking Prosecution Unit – and HSI have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative aimed at strengthening high-impact prosecutions under both U.S. and Mexican law. The initiative is aimed at dismantling human trafficking networks operating across the United States-Mexico border, bringing human traffickers to justice, reuniting victims with their children, and restoring the rights and dignity of human trafficking victims held under the trafficking networks’ control. These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of over 50 defendants in multiple cases in New York, Georgia, Florida, and Texas since 2009, and numerous Mexican federal and state prosecutions of associated sex traffickers. In announcing the extradition, U.S. Attorney Geoffrey S. Berman and Acting Assistant Attorney General John M. Gore of the Civil Rights Division commended U.S. and Mexican law enforcement partners for their shared and continued commitment to coordinated bilateral anti-trafficking efforts.
Mr. Berman also praised the outstanding investigative work of HSI, the work of the Mexican government, and Mexican law enforcement in executing the arrests and preparing for the extradition of the defendants to the United States, and the assistance provided by the New York City Police Department, the State Department, the Civil Rights Division’s Human Trafficking Prosecution Unit, and the Criminal Division’s Office of International Affairs. The Justice Department also acknowledged the non-governmental victim service providers and advocates for their dedicated efforts to restore and improve the lives of survivors of trafficking and their families in connection with this case and others.
* * *
Charts containing the names, ages, residences, charges, mandatory minimum penalties, and maximum penalties for the defendants are set forth below. 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.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The prosecution is being handled by the Violent and Organized Crime Unit of the U.S. Attorney’s Office for the Southern District of New York. Assistant U.S. Attorneys Kristy J. Greenberg, Jacqueline C. Kelly, Elinor L. Tarlow, and Jane Kim are in charge of the prosecution.
United States v. Efrain Granados-Corona, a/k/a “Chavito,” a/k/a “Cepillo,” et al.,
S2 16 Cr. 324 (ALC)
COUNT / CHARGE
DEFENDANT(S)
MANDATORY MINIMUM PENALTIES
MAXIMUM PENALTIES
Count 1: Conspiracy to Commit Sex Trafficking
18 U.S.C. § 1594
EFRAIN GRANADOS-CORONA,
a/k/a “Chavito,”
a/k/a “Cepillo,”
RAUL ROMERO-GRANADOS,
a/k/a “Chicarcas,”
a/k/a “El Negro,”
ISAAC LOMELI-RIVERA,
a/k/a “Giro,”
JULIO SAINZ-FLORES,
a/k/a “Rogelio,”
JUAN ROMERO-GRANADOS,
a/k/a “Chegoya,”
a/k/a “El Guero,” ALAN ROMERO-GRANADOS,
a/k/a “El Flaco,”
PEDRO ROJAS-ROMERO,
EMILIO ROJAS-ROMERO
N/A
Life in prison
Count 2: Sex Trafficking of a Minor by Force, Fraud, or Coercion
18 U.S.C. §§ 1591(a), (b)(1), (b)(2), and 2
RAUL ROMERO-GRANADOS,
a/k/a “Chicarcas,”
a/k/a “El Negro”
15 years in prison
Life in prison
Count 3: Sex Trafficking of a Minor by Force, Fraud, or Coercion
18 U.S.C. §§ 1591(a), (b)(1), (b)(2), and 2
EFRAIN GRANADOS-CORONA, a/k/a “Chavito,”
a/k/a “Cepillo”
15 years in prison
Life in prison
Count 4:
Sex Trafficking of a Minor by Force, Fraud, or Coercion
18 U.S.C. §§ 1591(a), (b)(1), (b)(2), and 2
JULIO SAINZ-FLORES,
a/k/a “Rogelio”
15 years in prison
Count 5:
Sex Trafficking of a Minor by Force, Fraud, or Coercion
18 U.S.C. §§ 1591(a), (b)(1), (b)(2), and 2
EFRAIN GRANADOS-CORONA,
a/k/a “Chavito,”
a/k/a “Cepillo,”
RAUL ROMERO-GRANADOS,
a/k/a “Chicarcas,”
a/k/a “El Negro”
15 years in prison
Life in prison
Count 6:
Sex Trafficking by Force, Fraud, and Coercion
18 U.S.C. §§ 1591(a), (b)(1), and 2
EFRAIN GRANADOS-CORONA,
a/k/a “Chavito,”
a/k/a “Cepillo,”
RAUL ROMERO-GRANADOS,
a/k/a “Chicarcas,”
a/k/a “El Negro,”
PEDRO ROJAS-ROMERO
15 years in prison
Life in prison
Count 7: Sex Trafficking by Force, Fraud, and Coercion
18 U.S.C. §§ 1591(a), (b)(1), and 2
ISAAC LOMELI-RIVERA,
a/k/a “Giro”
15 years in prison
Life in prison
Count 8: Sex Trafficking by Force, Fraud, and Coercion
18 U.S.C. §§ 1591(a), (b)(1), and 2
ISAAC LOMELI-RIVERA,
a/k/a “Giro”
15 years in prison
Life in prison
Count 9: Sex Trafficking by Force, Fraud, and Coercion
18 U.S.C. §§ 1591(a), (b)(1), and 2
JUAN ROMERO-GRANADOS,
a/k/a “Chegoya,”
a/k/a “El Guero”
15 years in prison
Life in prison
Count 10: Sex Trafficking by Force, Fraud, and Coercion
18 U.S.C. §§ 1591(a), (b)(1), and 2
ALAN ROMERO-GRANADOS,
a/k/a “El Flaco”
15 years in prison
Life in prison
Count 11:
Sex Trafficking by Force, Fraud, and Coercion
18 U.S.C. §§ 1591(a), (b)(1), and 2
EMILIO ROJAS-ROMERO
15 years in prison
Life in prison
Count 12:
Sex Trafficking by Force, Fraud, and Coercion
18 U.S.C. §§ 1591(a), (b)(1), and 2
PEDRO ROJAS-ROMERO,
EMILIO ROJAS-ROMERO
15 years in prison
Life in prison
Count 13:
Transportation of a Minor for Purposes of Prostitution
18 U.S.C. §§ 2423(a) and 2
EFRAIN GRANADOS-CORONA,
a/k/a “Chavito,”
a/k/a “Cepillo”
10 years in prison
Life in prison
Count 14:
Transportation of a Minor for Purposes of Prostitution
18 U.S.C. §§ 2423(a) and 2
RAUL ROMERO-GRANADOS,
a/k/a “Chicarcas,”
a/k/a “El Negro”
10 years in prison
Life in prison
Count 15:
Transportation of a Minor for Purposes of Prostitution
18 U.S.C. §§ 2423(a) and 2
RAUL ROMERO-GRANADOS,
a/k/a “Chicarcas,”
a/k/a “El Negro”
10 years in prison
Life in prison
Count 16:
Transportation of a Minor for Purposes of Prostitution
18 U.S.C. §§ 2423(a) and 2
JULIO SAINZ-FLORES,
a/k/a “Rogelio”
10 years in prison
Life in prison
Count 17: Transportation for Purposes of Prostitution
18 U.S.C. §§ 2421 and 2
EFRAIN GRANADOS-CORONA,
a/k/a “Chavito,”
a/k/a “Cepillo”
N/A
10 years in prison
Count 18:
Transportation for Purposes of Prostitution
18 U.S.C. §§ 2421 and 2
ISAAC LOMELI-RIVERA,
a/k/a “Giro”
N/A
10 years in prison
Count 19: Transportation for Purposes of Prostitution
18 U.S.C. §§ 2421 and 2
ISAAC LOMELI-RIVERA,
a/k/a “Giro”
N/A
10 years in prison
Count 20:
Transportation for Purposes of Prostitution
18 U.S.C. §§ 2421 and 2
JUAN ROMERO-GRANADOS,
a/k/a “Chegoya,”
a/k/a “El Guero”
N/A
10 years in prison
Count 21:
Transportation for Purposes of Prostitution
18 U.S.C. §§ 2421 and 2
ALAN ROMERO-GRANADOS,
a/k/a “El Flaco”
N/A
10 years in prison
Count 22:
Transportation for Purposes of Prostitution
18 U.S.C. §§ 2421 and 2
PEDRO ROJAS-ROMERO
N/A
10 years in prison
Count 23:
Transportation for Purposes of Prostitution
18 U.S.C. §§ 2421 and 2
EMILIO ROJAS-ROMERO
N/A
10 years in prison
DEFENDANT
AGE
RESIDENCE
EFRAIN GRANADOS-CORONA,
a/k/a “Chavito,”
a/k/a “Cepillo”
42
Mexico
RAUL ROMERO-GRANADOS,
a/k/a “Chicarcas,”
a/k/a “El Negro”
34
New York
ISAAC LOMELI-RIVERA,
a/k/a “Giro”
35
New York
JUAN ROMERO-GRANADOS,
a/k/a “Chegoya,”
a/k/a “El Guero”
32
Mexico
JULIO SAINZ-FLORES,
a/k/a “Rogelio”
36
Mexico
ALAN ROMERO-GRANADOS,
a/k/a “El Flaco”
24
Mexico
PEDRO ROJAS-ROMERO
38
Mexico
EMILIO ROJAS-ROMERO
36
Mexico
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Manhattan U.S. Attorney Announces $6.6 Million Settlement Against CityMD for Submitting False Claims to MedicareRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today a settlement of a civil fraud lawsuit against CityMD. This settlement resolves federal claims under the False Claims Act, 31 U.S.C. § 3729 et seq., alleging that CityMD billed Medicare for services rendered by physicians who did not actually perform those services, and billed Medicare for more expensive and complex services than were actually provided to patients. Under the terms of the settlement approved yesterday by U.S. District Judge Katherine Polk Failla, CityMD admitted and accepted responsibility for its conduct and agreed to pay $6,606,251.40 in damages to the United States.
Manhattan U.S. Attorney Geoffrey S. Berman said: “CityMD improperly billed Medicare at significant cost to taxpayers. This settlement holds CityMD accountable both through the significant monetary payment and the detailed admissions made by CityMD.”
CityMD manages and operates approximately 88 Urgent Care centers, located primarily in the New York City metropolitan area. As part of the settlement, CityMD admits, acknowledges, and accepts responsibility for the following conduct:
- CityMD billed Medicare for lengthier and/or more complex services or procedures than the services or procedures it actually provided to patients or that were supported with documentation in the medical records. Had CityMD billed Medicare for the services actually rendered or supported by the documents in the medical records, it would have received a lower rate of reimbursement from the Medicare program.
- Medicare rules generally prohibit medical providers, such as CityMD, from seeking reimbursement from the Medicare program for services rendered by a physician unless that physician is both enrolled with the Medicare program when the services are rendered and has reassigned his or her Medicare benefits to the billing provider (collectively known as being “credentialed” with the Medicare program).
- CityMD is generally prohibited from billing Medicare for services rendered by an uncredentialed physician unless and until he or she is credentialed with the Medicare program.
- CityMD employed a number of physicians who were not credentialed with the Medicare program at the time CityMD billed Medicare for their services.
- CityMD falsely billed Medicare for services rendered by these uncredentialed physicians using the National Provider Identification numbers of other credentialed physicians who did not actually render the services in question.
In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.
* * *
Mr. Berman noted that CityMD cooperated fully with this investigation.
The case is being handled by the Office’s Civil Division. Assistant U.S. Attorneys Mónica P. Folch and Jacob M. Bergman are in charge of the case.
- CityMD billed Medicare for lengthier and/or more complex services or procedures than the services or procedures it actually provided to patients or that were supported with documentation in the medical records. Had CityMD billed Medicare for the services actually rendered or supported by the documents in the medical records, it would have received a lower rate of reimbursement from the Medicare program.
Lower Brule Man Acquitted of Sexual AbuseRead the Press Release
United States Attorney Ron Parsons announced that a Lower Brule, South Dakota, man was acquitted of Sexual Abuse of a Person Incapable of Consent as a result of a federal jury trial in Pierre, South Dakota, on May 3, 2018.
Gregory Laroche, Sr., age 53, was indicted by a federal grand jury on February 14, 2018.
The charge relates to an incident which occurred on November 14, 2017, when Laroche allegedly sexually abused a female acquaintance.
The investigation was conducted by the Bureau of Indian Affairs, Lower Brule Agency and the U.S. Attorney's Office prosecuted the case.
Lorain man faces at least 20 years in prison after jury convicts him of selling fentanyl that killed a 23-year-old Lorain manRead the Press Release
A Lorain man faces at least 20 years in prison after a jury convicted him of selling fentanyl that killed a 23-year-old Lorain man in 2016.
Russell Davis, 51, is scheduled to be sentenced on Aug. 29. The jury convicted him on one count of distribution of fentanyl that resulted in death.
Davis sold fentanyl to Jacob Castro-White that resulted in Castro-White fatally overdosing on March 7, 2016, according to trial testimony and court records.
“Aggressively prosecuting people who profit from selling the drugs killing our friends and neighbors is a crucial component to overcoming the opioid epidemic,” U.S. Attorney Justin Herdman said. “The Lorain Police Department, FBI, the Lorain County Prosecutor's Office are all to be commended for their diligence in this case.”
“It is almost a daily occurrence to hear of a death due to heroin or fentanyl,” said FBI Special Agent in Charge Stephen D. Anthony. “Law enforcement will continue to work collaboratively to hold accountable those that bring this poison and destruction to our communities.”
This case was prosecuted by Assistant U.S. Attorneys Robert Corts and Vasile Katsaros following an investigation by the FBI and Lorain Police Department, with assistance from the Lorain County Prosecutor's Office.
Long-Time Fugitive and Repeat Fraudster Sent to Prison AgainRead the Press Release
HOUSTON – The 75-year-old long time fugitive known as “Butch” Ballow has received a second federal sentence following his admission of defrauding investors in a Nevada company with shares traded on the over-the-counter securities market, announced U.S. Attorney Ryan K. Patrick. Harris Dempsey aka “Butch” Ballow, formerly of formerly of Galveston County, pleaded guilty Feb. 2, 2018, to wire fraud and conspiracy to commit wire fraud.
Today, U.S. District Judge Ewing Werlein Jr. sentenced Ballow to serve 40 years in prison – the statutory maximum. He was further ordered to pay $37,544,944 in restitution. At the hearing, the court heard from one victim whom Ballow defrauded out of $5 million. The victim explained that Ballow used religious pretenses to convince victims to invest money and that he presented himself in Mexico as a type of missionary. He further mentioned that he knew victims who had lost their life saving to Ballow.
Judge Werlein added that in all his decades on the bench, he could not think of a more outrageous fraudulent crime spree, calling it “despicable” and noting there were more than 500 victims.
Assistant U.S. Attorney (AUSA) John Lewis told the judge Ballow was a “financial predator” who would keep committing fraud as long as he was out of jail and explained Ballow had been using fake names to commit fraud since at least the early 1980s when he was convicted of a financial crime against a jewelry store in San Diego.
In this case, Ballow admitted to defrauding investors in E-SOL International Corporation.
At the time of the offense, Ballow was a fugitive from justice in the United States. He had previously been convicted of money laundering that centered on misrepresentations made in connection with the purchase and sale of stock. Ballow pleaded guilty in that case before U.S. District Judge David Hittner and was released on bond. He was set for sentencing Dec. 16, 2004, but failed to show, having fled the country for Mexico where he lived for almost five years under a series of fake names. While there, he defrauded numerous investors through a new scheme which is the basis for the sentencing today.
At the time of his plea, Ballow admitted that in 2005, while living as a fugitive in Mexico under the name John Gel, he purchased the majority of the publically traded shares of E-SOL and installed fictitious persons named Robert Remington and Marilyn Desimone as officers. At the time, E-SOL had almost no assets and conducted no business. Nonetheless, over the course of the next four years, Ballow sold E-SOL stock to investors in return for millions of dollars by deceiving them about the company’s assets and finances, while hiding his identity, his criminal convictions and his status as a fugitive.
In June 2008, Ballow pretended to be a banker named Tom Brown and convinced an American investor living in Puerto Aventuras, Mexico, to purchase E-SOL stock for $5 million. Ballow convinced the investor that E-SOL was developing a golf and recreational resort community in the jungle west of Cancun. However, the resort was fictitious and the stock was worthless. Ballow soon fled from Puerto Aventuras and surfaced under a new name a few months later in Puerto Vallarta, Mexico, where he continued to defraud investors.
Ballow was ultimately arrested by Mexican authorities July 13, 2010, in Nuevo Vallarta, Mexico, and extradited to the United States the following year.
Once in the United States, Judge Hittner ordered him to prison for 10 years in prison and to pay $10 million in restitution for the 2003 money laundering conviction.
Several other persons have been convicted of conspiring to commit wire fraud with Ballow while he was in Mexico and ordered to federal prison including Austin lawyer Patrick Lanier, 69, and Christopher Harless, 65, of Georgetown, who are currently serving a 17 and 20 years in federal prison, respectively. Other co-conspirators are awaiting sentencing or remain fugitives in the case.
The FBI and IRS - Criminal Investigation conducted the investigation with the assistance of the U.S. Marshals Service and U.S. Postal Inspection Service. The United States government also received extensive and valuable assistance from the governments of Mexico and Canada.
Assistant U.S. Attorneys John R. Lewis and Belinda Beek are prosecuting the case.
Lewisville Man Sentenced to 62 years in Federal Prison for Home Invasions/CarjackingsRead the Press Release
PLANO, Texas – A 27-year-old Lewisville, Texas man has been sentenced to 62 years in federal prison for violent crimes in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Jermaine Webster Harris was found guilty by a jury on May 25, 2017, of multiple federal charges and was sentenced to 744 months in federal prison today by U.S. District Judge Marcia Crone in Plano. Harris was convicted of 17 federal charges which included multiple violations of carjacking; conspiracy to carry a firearm during and in relation to a crime of violence; possession of a firearm during a violent crime; conspiracy to commit theft of firearms; theft of firearms; conspiracy to possess stolen firearms; and possession of stolen firearms.
According to information presented in court, Harris, along with his co-defendants, committed numerous home invasion robberies, burglaries, and two carjackings in and around Plano and Frisco, Texas. Harris was armed during the carjackings. He was indicted on Feb. 11, 2016, by a federal grand jury. Harris’ co-defendants all pleaded guilty and have already been sentenced. Alton Marshall, 26, of Frisco, Texas, was sentenced to 141 months in federal prison; Derek Polk, 28, of Irving, Texas was sentenced to 240 months in federal prison; and Kenneth Cash, 31, of the Colony, Texas, received a sentence of 300 months. Harris was the only defendant who proceeded to trial. Testimony during trial revealed that Harris was the ring-leader of these violent acts and that he recruited others to assist in the commission of the crimes.
“These were violent crimes, and this defendant terrorized many people,” said U.S. Attorney Brown. “These are the kind of violent offenders that the Justice Department will continue to prioritize for prosecution.”
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Bedford Police Department, the Plano Police Department, the Frisco Police Department, and the Lewisville Police Department. This case was prosecuted by Assistant U.S. Attorneys Tracey Batson and Ernest Gonzalez.
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Illegal alien from Mexico pleads guilty to illegally reentering the United States for 4th timeRead the Press Release
LAFAYETTE, La. – United States Attorney David C. Joseph announced today that an illegal alien from Mexico pleaded guilty to reentering the United States after having been previously removed from the United States on three occasions.
Alberto Rodriguez-Perez, 39, of Mexico, pleaded guilty before U.S. Magistrate Judge Patrick Hanna to one count of illegal reentry of a previously deported alien. The plea will become final when accepted by U.S. District Judge Dee D. Drell. According to the guilty plea, a deportation officer encountered Rodriguez-Perez while at the Lafayette Parish Correctional Center. The officer later discovered that Rodriguez-Perez was illegally in the United States having been previously deported in 2004, 2010 and 2013.
Rodriguez-Perez faces up to two years in prison, one year of supervised release and a $250,000 fine. If he is found to have been removed subsequent to a prior felony offense, or three or more misdemeanor offenses involving drugs, crimes against a person, or both, the defendant will face 10 years in prison, three years of supervised release and a $250,000 fine. The court set sentencing for August 30, 2018.
United States Immigration and Customs Enforcement and the Lafayette Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Daniel J. McCoy is prosecuting the case.
Hammond Woman ChargedRead the Press Release
SOUTH BEND – Michelle Seljan, 47, of Hammond, Indiana, was charged by information with theft of federal funds and tax evasion, announced U.S. Attorney Kirsch.
United States Attorney Kirsch said, “Ms. Seljan betrayed the public trust by using her position with the Hammond Housing Authority for her own private gain. Citizens deserve honest public servants who will efficiently carry out the mission of their agencies. Along with our law enforcement partners, we will continue to investigate and prosecute public corruption across the Northern District of Indiana.”
According to documents in this case, from 2013 through 2016, Ms. Seljan embezzled approximately $633,628 from the Hammond Housing Authority. Ms. Seljan had funds sent from the Hammond Housing Authority to bank accounts she created and made those transactions appear to be legitimate housing assistance recipient payments. During the same time period, Seljan misreported her income, evading more than $200,000 in federal taxes.
Along with this Information, a plea agreement relating to the theft of federal funds and tax evasion has been filed.
This case was being investigated by the United States Department of Housing and Urban Development, Office of Inspector General, and the Internal Revenue Service, Criminal Investigation Division. This case will be handled by Assistant U.S. Attorney Jesse Barrett.
The United States Attorney's Office emphasized that an Information is merely an allegation and that all persons charged are presumed innocent until, and unless, proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
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Fugitive Sentenced to Federal PrisonRead the Press Release
MISSOULA – Martin Jay Hope, a 57-year-old federal felon, was sentenced today to 15 months in prison followed by 3 years supervised release after pleading guilty to escape on January 24, 2018. U.S. District Judge Dana L. Christensen handed down the sentence.
In November 2008, Hope was sentenced to 312 months custody in federal prison for being a felon in possession of a firearm. In March 2017, Hope was re-sentenced to ten years imprisonment. His projected release date was October 27, 2017. Hope was to serve the last month of his sentence at the Butte Prerelease Center. In late September, Hope left California for the Butte RRC using transportation and bus tickets purchased by the BOP for his transfer. He should have arrived in Butte on September 28, 2017. The following day, the BOP notified the United States Marshals Service that Hope failed to report to the Butte RRC as scheduled. Hope was arrested on September 30, 2017, in Longview, Washington. He was returned to BOP custody shortly after his arrest. According to Hope, he absconded in order to see his mother and his sister. While at the bus station, someone offered him methamphetamine and he accepted it.
The case was prosecuted by Assistant U.S. Attorney Paulette Stewart and investigated by the Unites States Marshals Service, United States Probation Office, and Federal Bureau of Prisons.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Four Men Sentenced in Manhattan Federal Court for Their Roles in Two 2016 Bank BurglariesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that four defendants have been sentenced to significant prison terms by United States District Judge Katherine B. Forrest for their participation in two bank burglaries. In April and May 2016, MICHAEL MAZZARA, CHARLES KERRIGAN, and ANTHONY MASCUZZIO, assisted by CHRISTOPHER KERRIGAN, stole more than $20 million in cash, jewelry, collectables, and other valuables from the banks’ vaults and safe deposit boxes.
U.S. Attorney Geoffrey S. Berman said: “By using blow torches to cut through bank roofs, and subsequently into vaults and safe deposit boxes, these defendants deprived hundreds of unsuspecting victims of their valuables, priceless heirlooms, and cherished keepsakes. As a result, the defendants will serve serious prison sentences. We will now be able to reunite many of the stolen items, including religious artifacts, jewelry, baseball cards, and coins, with their rightful owners.”
According to the Complaint and Indictments filed in Manhattan federal court, as well as previous court filings and statements made in public court proceedings:
In April and May 2016, MAZZARA, CHARLES KERRIGAN, MASCUZZIO, and CHRISTOPHER KERRIGAN formed a crew that burglarized banks in Brooklyn and Queens, New York, by cutting into the banks’ vaults and the safe deposit boxes inside. MAZZARA, CHARLES KERRIGAN, and MASCUZZIO, with the assistance of CHRISTOPHER KERRIGAN, burglarized an HSBC Bank branch located at 4406 13th Avenue in Brooklyn from about April 8 through April 10, 2016, and burglarized a Maspeth Federal Savings Bank branch located at 64-19 Woodhaven Boulevard in Queens, New York, from about May 19 to May 22, 2016. On both occasions, the burglars used acetylene blowtorches to cut into the top of the banks’ vaults from the roof of the building. At the Maspeth Federal Savings Bank branch, they shielded their activities from view by constructing a plywood shed on the roof of the bank. The burglars then entered the vaults from above and took cash belonging to the bank and broke open customers’ safe deposit boxes, stealing the valuables inside. In total, the crew obtained more than $600,000 in cash and more than $20 million in valuables from the safe deposit boxes from both banks. Surveillance footage captured some of the burglars’ activities as they prepared for and executed the burglaries. Financial records and video surveillance also showed MAZZARA and MASCUZZIO purchasing some of the supplies that appear to have been used in the Maspeth burglary.
During the course of the investigation of the burglaries, the Federal Bureau of Investigation (“FBI”) and New York City Police Department (“NYPD”) executed multiple search warrants at locations in Brooklyn, Long Island, and Pennsylvania, and seized items that had been taken from safe deposit boxes during the burglaries. In addition, as part of their plea agreements, MAZZARA and MASCUZZIO returned other items that had been stolen from the safe deposit boxes. In total, more than 200 items that were stolen from safe deposit boxes – including religious artifacts, jewelry, and collectibles – have been recovered as a result of this investigation.
* * *
MAZZARA, 46, of Brooklyn, New York, was sentenced by Judge Forrest on April 13, 2018, to a total term of 135 months in prison.
In addition to the burglaries, CHARLES KERRIGAN, 42, of Brooklyn, New York, pled guilty to one count of witness retaliation while on pre-trial release, in connection with his assault of an individual who he believed had provided information regarding the burglaries to the FBI and NYPD. CHARLES KERRIGAN was sentenced by Judge Forrest on April 11, 2018, to a total term of 200 months in prison.
MASCUZZIO, 38, of Brooklyn, New York, was sentenced by Judge Forrest on May 4, 2018, to a total term of 84 months in prison, and three years of supervised release.
CHRISTOPHER KERRIGAN, 41, of Staten Island, New York, was sentenced by Judge Forrest on March 30, 2018, to a total term of 90 months in prison.
In addition to the prison terms, Judge Forrest also ordered that the defendants forfeit more than $20 million. Judge Forrest has adjourned the entry of an order of restitution to the victims of the burglaries until June 28, 2018, so that a final determination of the victims’ losses can be made.
Mr. Berman praised the outstanding investigative efforts of the FBI and NYPD.
If you believe you were a victim of this crime, and you wish to provide information to law enforcement, receive notice of future developments in the case, or review and/or claim any of the stolen items that were recovered during this investigation, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Benet J. Kearney and David W. Denton Jr. are in charge of the prosecution.
Four Men Charged with Violations of Federal Gun Control Act and Federal Narcotics Laws in Twenty-Count IndictmentRead the Press Release
U.S. Attorney Duane A. Evans announced that TERRANCE MORGAN, age 25, of New Orleans, RICHARD GREEN, a/k/a “Blue,” a/k/a “Bam,” age 28, of New Orleans, KENDALL CELESTINE, age 20, of New Orleans, and ERIC ROBINSON, age 26, of New Orleans, were indicted yesterday by a federal grand jury.
The charging document alleges that, MORGAN, GREEN, CELESTINE, and ROBINSON conspired to distribute 100 grams or more of heroin between at least June 2014, and April 2018. If convicted of this charge, each defendant faces a term of imprisonment of 5 to 40 years, a fine of up to $5 million, and at least four years of supervised release following any term of imprisonment. The indictment also alleges that MORGAN, GREEN, CELESTINE, and ROBINSON conspired to possess firearms in furtherance of a drug-trafficking crime during the same time period. If convicted of this count, each defendant faces a term of imprisonment of up to 20 years, a fine of up to $250,000, and up to three years of supervised release following any term of imprisonment. In addition, each defendant is charged with substantive counts of possession of firearms in furtherance of a drug-trafficking crime. If convicted of this offense, each defendant faces a term of imprisonment of 5 years to life, a fine of up to $250,000, and up to five years of supervised release following any term of imprisonment.
The indictment also charges MORGAN, GREEN, and ROBINSON, convicted felons, with illegally possessing firearms. If convicted on these charges, MORGAN, GREEN, and ROBINSON face a term of imprisonment of up to 10 years, a fine of up to $250,000, and up to three years of supervised release following any term of imprisonment. GREEN is charged with six counts of distribution of a quantity of heroin. If convicted of these charges, GREEN faces, as to each count, a term of imprisonment of up to 20 years, a fine of up to $1 million, and at least three years of supervised release following any term of imprisonment. Finally, GREEN, and ROBINSON are charged with possession with intent to distribute heroin and MDMA, and MORGAN and CELESTINE are charged with possession with intent to distribute a Schedule I controlled substance called “U-47700.” If convicted of these crimes, each defendant faces a term of imprisonment of up to 20 years, a fine of up to $250,000, and at least three years of supervised release following any term of imprisonment.
U.S. Attorney Evans reiterated that the indictment is merely an allegation and that the guilt of the defendant must be proven beyond a reasonable doubt.
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.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New Orleans Police Department, the Louisiana State Police, and the Terrebonne Parish Sheriff’s Office. Assistant United States Attorneys Maria M. Carboni and Matthew R. Payne are in charge of the prosecution.
Four Defendants Convicted in Manhattan Federal Court for Stealing Confidential Government Information and Using It to Engage in Illegal TradingRead the Press Release
Robert Khuzami, the Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, announced the conviction of DAVID BLASZCZAK, a political intelligence consultant, CHRISTOPHER WORRALL, a government employee at the Centers for Medicare and Medicaid Services (“CMS”), and THEODORE HUBER and ROBERT OLAN, two partners and analysts at Deerfield Management Company, L.P., a healthcare-focused hedge fund in New York, New York (“Deerfield”). BLASZCZAK, WORRALL, HUBER, and OLAN were convicted yesterday after a four-week trial before United States District Judge Lewis A. Kaplan.
BLASZCZAK, WORRALL, HUBER, and OLAN were charged with participating in a scheme, from in or about 2009 through in or about 2014, to convert United States property, to defraud the United States, and to commit securities fraud and wire fraud for obtaining material nonpublic information from CMS and using it to execute profitable trades at Deerfield.
As part of the scheme, BLASZCZAK was charged with obtaining confidential and nonpublic information from CMS employees, including his friend, CHRISTOPHER WORRALL, who worked at CMS, and who was charged with breaching his duties as a CMS employee by providing confidential information to BLASZCZAK. BLASZCZAK then was alleged to have provided this material nonpublic information in advance of market-moving CMS announcements to employees at Deerfield, including HUBER, OLAN, and Jordan Fogel, who allegedly recommended trades on the basis of the information. Jordan Fogel, a former partner and analyst at Deerfield, previously pled guilty and is cooperating with the Government. As a result of these trades, Deerfield reaped more than $7 million in profits.
BLASZCZAK was also charged in a separate scheme with obtaining confidential and nonpublic CMS information about cuts in CMS’s reimbursement rates for home health providers, and with providing that information to Christopher Plaford, a portfolio manager at Visium Asset Management, L.P., another healthcare-focused hedge fund in New York, New York (“Visium”). Plaford then used BLASZCZAK’s information to execute trades, resulting in approximately $330,000 in profits. Plaford has previously pled guilty to this conduct and is also cooperating with the Government.
Deputy U.S. Attorney Robert Khuzami said: “As a unanimous jury found, these defendants schemed to get highly sensitive and confidential information from CMS, a governmental entity, and feed it to a hedge fund to make illegal profits in the stock market. Trading on confidential nonpublic government information is just as illegal as trading on corporate insider information. Our Office is committed to policing and prosecuting both.”
According to the allegations in the charging documents and statements made in court proceedings:
CMS
CMS, a component of the United States Department of Health and Human Services (“HHS”), administers Medicare and Medicaid, among other things. CMS is also responsible for setting Medicare reimbursement rates for healthcare providers. CMS spends more than $1 trillion annually and pays approximately one-third of the country’s health expenditures. Accordingly, CMS rulemaking decisions, including decisions that affect how much the federal government will pay to reimburse medical providers for services rendered, have a substantial, market-moving impact on publicly traded companies that depend on government healthcare spending.
WORRALL began working at CMS in or about 1999. Beginning in January 2012, WORRALL worked in the Director’s Office for the Center for Medicare (“CM”), which gave WORRALL broad access to CMS’s confidential deliberations about upcoming reimbursement decisions. WORRALL also served as a project manager for a confidential CMS database that contained CMS’s most up-to-date claims data that CMS used to inform its decision-making.
David Blaszczak
At all relevant times, BLASZCZAK served as a consultant at a number of Washington, D.C.-based firms that, in exchange for a fee, provided so-called “political intelligence,” which included analysis about how changes in Government reimbursement rates would affect publicly traded healthcare-related companies. Before becoming a political intelligence consultant, BLASZCZAK worked at CMS, eventually serving as a special assistant to the CMS Administrator. BLASZCZAK met WORRALL while the two worked at CMS.
As a former CMS employee, BLASZCZAK was well aware of CMS’s rules governing the dissemination of nonpublic information.
Deerfield Management Company, L.P.
At all relevant times, Deerfield managed multiple hedge funds specializing in healthcare-related investments. As of 2017, Deerfield had more than $7 billion in assets under management. HUBER, OLAN, and Fogel were partners and analysts at Deerfield, where their job was to analyze investment decisions and recommend potentially profitable trades for Deerfield. Deerfield’s compliance manual prohibited its employees from committing insider trading.
The Scheme to Convert and Use Confidential CMS Information
As alleged in the Indictment, from at least in or about 2009 through in or about 2014, BLASZCZAK, WORRALL, HUBER, OLAN, Fogel, and others participated in a scheme to convert to their own use confidential and material nonpublic information from CMS concerning, among other things, CMS’s internal deliberations regarding coverage and reimbursement decisions.
During this time period, Deerfield retained BLASZCZAK as a consultant who provided political intelligence related to, among other things, the content, likelihood, and timing of CMS reimbursement decisions. As part of the scheme, HUBER, OLAN, and Fogel encouraged BLASZCZAK to obtain confidential and material nonpublic information from CMS insiders. As HUBER, OLAN, and Fogel knew, these CMS insiders included BLASZCZAK’s former colleagues with whom he had close personal relationships, who were prohibited from disclosing such information to CMS outsiders.
BLASZCZAK obtained material nonpublic information from his close friend and former CMS colleague WORRALL. BLASZCZAK and WORRALL were friends since their time working together at CMS. BLASZCZAK also frequently offered to help WORRALL find lucrative private sector employment opportunities, in exchange for WORRALL giving BLASZCZAK confidential government information.
BLASZCZAK conveyed the information obtained from WORRALL to HUBER, OLAN, and Fogel, who – knowing that BLASZCZAK had obtained the information improperly from a CMS insider – used the information to trade. In exchange for being provided with this inside information, HUBER, OLAN, and Fogel caused Deerfield to pay BLASZCZAK more than $800,000 in consulting fees.
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Defendants’ Ages and Residences
Defendant
Residence
Age
David Blaszczak
Isle of Palms, South Carolina
42
Christopher Worrall
Linthicum Heights, Maryland
40
Theodore Huber
Westport, Connecticut
56
Robert Olan
Rumson, New Jersey
47
Mr. Khuzami praised the work of the Federal Bureau of Investigation and U.S. Department of Health and Human Services, Office of the Inspector General, and thanked the Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Ian McGinley, Joshua A. Naftalis, and Brooke E. Cucinella are in charge of the prosecution.
Former Nashville Metro Police Sergeant Facing Federal Theft and Money Laundering ChargesRead the Press Release
An indictment was unsealed today, charging former Nashville Metropolitan Police Department (MNPD)Sergeant James Dunaway with two counts of theft from federal program funds and two counts of money laundering, announced U.S. Attorney Don Cochran of the Middle District of Tennessee.
Dunaway, 43, of Old Hickory, Tennessee, surrendered this morning to U.S. Marshals after being indicted by a federal grand jury on Wednesday. He will appear before a U.S. Magistrate later this afternoon.
According to the indictment, during the period of November 18, 2015 through November 16, 2017, Dunaway was a supervisor in the MNPD Specialized Investigation Division-Narcotics Unit and was responsible, among other things, for monitoring and executing search warrants.
The indictment alleges that during the execution of search warrants on five separate occasions, Dunaway stole a portion of the cash discovered and seized at each location, including:
the November 18, 2015 search of a residence off Pleasant Hill Road in Nashville, where more than $100,000 was seized;
the April 10, 2017 search of a residence off Robertson Road in Nashville, where more than $500,000 was seized;
the April 26, 2017 search of a residence off Pleasant Hill Road in Nashville, where more than $182,000 was seized;
the September 13, 2017 search of a residence off Spencer Enclave Way in Nashville, where more than $70,000 was seized; and
the November 15, 2017 search of a hotel room in which the MNPD Office of Professional Accountability had placed marijuana, $28,000 cash and video cameras for the purpose of conducting an integrity check. Video cameras captured Dunaway placing money in his pockets during the search and the indictment alleges that Dunaway stole $5,860.00 during the execution of this search warrant.
The indictment also alleges that between April 11, 2017 and May 8, 2017, Dunaway made approximately $40,540.00 in cash deposits and on May 1, 2017, he obtained a cashier’s check with $42,500.00 cash, which he stole during the searches. Dunaway then used the cashier’s check to purchase a 2014 Toyota Sequoia.
The indictment further alleges that during the course of this scheme, Dunaway embezzled, stole and converted approximately $105,910.00 to his own use.
If convicted, Dunaway faces up to 10 years in prison and a $250,000 fine on each count.
This case was investigated by the FBI and the Metropolitan Nashville Police Department. U.S. Attorney Don Cochran and Assistant U.S. Attorney Ryan Raybould are prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
Former Camargo Bank President Sentenced to PrisonRead the Press Release
OKLAHOMA CITY – Former First State Bank of Camargo President STEPHEN GREGORY WARD, 53, of Edmond, Oklahoma, has been sentenced to eighteen months in prison for conspiring to misapply bank funds, announced Robert J. Troester, Acting U.S. Attorney for the Western District of Oklahoma.
According to charges filed in September 2017, banking regulators closed First State Bank of Camargo in 2011, one hundred years after it opened. The bank was critically undercapitalized because Ward allowed bank insiders to pay personal and business checks when their accounts had insufficient funds. Between 2006 and 2011, the practice of using deposits of other customers to cover insiders’ overdrafts led certain bank employees to manipulate bank ledgers and records, which caused a significant under-reporting of overdrafts to the Federal Deposit Insurance Corporation. The charges identify numerous instances in which Ward personally took advantage of the bank’s illegal treatment of overdrafts.
On September 29, 2017, Ward pleaded guilty to conspiracy. Yesterday, Chief U.S. District Judge Joe Heaton sentenced him to eighteen months in prison, to be followed by three years of supervised release. He must also pay $95,149.38 Judge Heaton also sentenced yesterday NICKI S. DAY and MARJORIE H. COLE, both of Camargo. These two women worked at the bank and pleaded guilty to conspiring with Ward. Cole also pleaded guilty to failing to report income from the conspiracy on her 2008 federal income tax return. Each will serve one year and one day in federal prison, followed by three years of supervised release. Day was ordered to pay $140,768.05 to the FDIC; Cole was ordered to pay $733,473.64 to the FDIC and $89,996 to the Internal Revenue Service.
This case is the result of an investigation by the Federal Deposit Insurance Corporation’s Office of Inspector General, the FBI, and the Internal Revenue Service—Criminal Investigations. It was prosecuted by Assistant U.S. Attorney Kerry A. Kelly.
Reference is made to public filings for further information.
Former Bureau of Prisons Employee Agrees to Pay $50,000 to Resolve Anti-Kickback Act AllegationsRead the Press Release
Cary Hudson, a former financial administrator for the U.S. Bureau of Prisons (BOP) in Carswell, Texas, has agreed to pay the United States $50,000 to resolve allegations that he violated the Anti-Kickback Act by accepting improper payments from Mansfield, Texas-based Integrated Medical Solutions Inc. (IMS) in exchange for his assistance in obtaining BOP contracts. In May 2017, IMS and its former president, Jerry Heftler, agreed to pay more than $2.4 million to resolve their civil liability arising from the alleged scheme.
“This settlement demonstrates that the Department of Justice is committed to protecting the integrity of the federal contracting process from unscrupulous contractors,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Improper financial arrangements between government officials and private contractors corrupt taxpayer-funded contracts.”
The settlement announced yesterday resolves allegations that Hudson, while serving as a BOP financial administrator, accepted payments from IMS in exchange for providing favorable treatment in connection with BOP contracts to manage healthcare networks that provided medical care to federal inmates. Hudson’s assistance to IMS allegedly included the provision of certain confidential, non-public information that gave IMS an unfair competitive advantage in the bidding process. The government also alleged that, after IMS obtained the contracts with BOP, Hudson improperly assisted IMS in its performance of the contracts while simultaneously serving as a BOP financial administrator.
“This case, in which our office both criminally prosecuted the responsible employee and civilly recovered almost $2.5 million for the federal fisc, should serve as an example and warning to others who might be similarly tempted to abuse positions of trust in federal programs funded with taxpayer dollars,” said U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
In October 2014, Hudson pleaded guilty to a felony violation of 18 U.S.C. § 1001 for failing to disclose the payments he received from IMS as part of his annual obligation as a federal government employee to report any potential conflicts of interests.
This matter was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Texas, with assistance from the Department of Justice Office of Inspector General.
Except to the extent of the admissions in Hudson’s guilty plea, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability.
Florida Residents Charged with Using Stolen IDs to Make ATM Withdrawals throughout Southeastern WisconsinRead the Press Release
United States Attorney Matthew D. Krueger for the Eastern District of Wisconsin announced today that a federal grand jury returned an eighteen-count indictment charging three Florida residents each with three counts of Wire Fraud and three counts of Aggravated Identity Theft in violation of Title 18, United States Code Sections 1028(A)(a)(1) and 1343. The defendants are Adam Yves Paul (30), of Gainesville, Florida; Frantz Aubert Nelson, (28) of Miramar, Florida; and Yann Asmael Poye (24) of Pembroke Pines, Florida.
According to the charges, the defendants obtained stolen identities and banking information of Wisconsin residents and then traveled throughout Southeastern Wisconsin to make unauthorized withdrawals from automated teller machines (ATMs). The total amount of loss caused by the scheme is not known. However, Paul used stolen identities to withdraw at least $73,290.23, Nelson used stolen identities to withdraw at least $35,564.76, and Poye used stolen identities to withdraw at least $23,439.37.
United States Attorney Krueger commented, “Identity theft is far too common in our digital age. Criminals need to know that federal law mandates at least two years in prison for aggravated identity theft. The United States Government is committed to investigating and prosecuting this crime aggressively.”
The maximum penalties for each count of Wire Fraud is 20 years imprisonment and a $250,000 fine. The Aggravated Identity Theft charges carry a mandatory minimum sentence of two years of imprisonment and up to a $250,000 fine.
This matter is being investigated by the United States Secret Service’s Milwaukee Financial Crimes Task Force. It is being prosecuted by Assistant United States Attorney Zachary Corey. The public is cautioned that an indictment is merely a charge and the defendants are presumed innocent until and unless proven guilty.
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For Additional Information Contact:
Public Information Officer Dean Puschnig 414-297-1700
Federal Fraud Charges Filed Against County Commissioner O’DonnellRead the Press Release
WICHITA, KAN. – Sedgwick County Commissioner Michael O’Donnell is charged with wire fraud, bank fraud and money laundering, U.S. Attorney Stephen McAllister said.
A federal indictment unsealed here today alleges O’Donnell took money from his campaign accounts to put into his personal account and to give to his friends and covered it up by making false reports electronically to the Kansas Governmental Ethics Commission.
Michael B. O’Donnell, II, 33, Wichita, Kan., is charged with five counts of wire fraud, five counts of bank fraud and two counts of money laundering.
The indictment alleges O’Donnell provided false information in five reports he emailed to the state ethics commission in 2016 and 2017. At issue are a series of transactions that the indictment alleges O’Donnell falsely represented as payments made for campaign-related expenses. They include:
A $1,000 check O’Donnell wrote from his “Michael for Kansas” campaign account to a person identified as C.R. The indictment alleges that after C.R. cashed the check, O’Donnell deposited the $1,000 into his personal checking account.
A $1,000 check O’Donnell wrote from his “Michael for Kansas” campaign account to a person identified as J.D. After receiving the check, J.D. allegedly wrote a $1,000 personal check to O’Donnell and O’Donnell deposited the $1,000 check into his personal account.
A total of 12 checks from the “Michael for Kansas” campaign account O’Donnell wrote to a friend identified as D.J., totaling $5,650.
Three checks O’Donnell wrote from his “Michael for Sedgwick County” account to D.J. totaling $750.Six checks O’Donnell wrote from his “Michael for Kansas” account to a friend identified as J.M. totaling $2,100.
Upon conviction, the crimes carry the following penalties:
Wire fraud: Up to 20 years in federal prison and a fine up to $250,000.
Bank fraud: Up to 30 years and a fine up to $1 million.
Money laundering: Up to 20 years and a fine up to $500,000.
Special Agent Chuck Pritchett of the FBI and Detective Jon Gill of the Sedgwick County Sheriff’s Office investigated. Assistant U.S. Attorney Aaron Smith and Assistant U.S. Attorney Mona Furst are prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Eagle Butte Man Sentenced for Assaulting a Federal OfficerRead the Press Release
United States Attorney Ron Parsons announced that an Eagle Butte, South Dakota, man charged with Assaulting, Resisting, Opposing, and Impeding a Federal Officer was sentenced on April 30, 2018, by U.S. District Court Judge Roberto A. Lange.
Pete Knight, age 55, was sentenced to 6 months in custody, an additional 6 months of home confinement, 18 months of supervised release, and $100 to the Federal Crime Victims Fund.
Knight was indicted by a federal grand jury on June 14, 2017, for Assaulting, Resisting, Opposing, and Impeding a Federal Officer. Knight was found guilty of that charge by a jury on February 7, 2018.
The conviction stems from an incident that took place on May 8, 2017, in Ziebach County, South Dakota. On that day, Ziebach County Sheriff, Gary Cudmore made a traffic stop on a vehicle. During the course of the traffic stop, Knight and another individual stopped at the location of the traffic stop, as the vehicle stopped by Sheriff Cudmore belonged to Knight. Knight requested to talk to the driver and the sheriff allowed it. As soon as the door to the patrol vehicle was opened, Knight began to physically assault the driver, who was handcuffed behind his back and defenseless. Sheriff Cudmore was able to pull Knight back. Knight continued to attempt to get through Sheriff Cudmore to get at the driver. In the process, Knight shoved Sheriff Cudmore. Knight eventually left the scene.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Jay Miller.
Knight was remanded to the custody of the U.S. Marshals Service.