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20 December 2017
Former FCI Aliceville Corrections Officer Pleads Guilty to Abusive Sexual Contact with InmateRead the Press Release
BIRMINGHAM – A former corrections officer at the federal prison for women in Alabama pleaded guilty Tuesday to committing a sexual act with an inmate and lying about his contact with her while he worked at the facility, announced U.S. Attorney Jay E. Town and Department of Justice Office of the Inspector General, Miami Field Office, Assistant Special Agent in Charge James F. Boyersmith.
JESSE BAILEY, 28, of Carrolton, Ala., pleaded guilty before U.S. District Court Judge Virginia E. Hopkins to one count each of abusive sexual contact and making false statements to the government. The judge scheduled Bailey’s sentencing for March 13.
“Our office takes seriously the responsibility of holding individuals accountable when they violate the trust and responsibility placed on them to supervise and protect prisoners by, instead, abusing them — sexually or otherwise,” Town said. “Bailey’s action makes a very dangerous job more difficult for all members of law enforcement, the vast majority of whom conduct themselves with the highest professional standards and utmost levels of integrity.”
“The OIG is committed to protecting the safety of inmates and investigating incidents of alleged abuse by correctional staff,” Boyersmith said. “Today’s guilty plea demonstrates that corruption and abuse of power within our federal correctional system will not be tolerated.”
Bailey worked as a corrections officer at the Federal Correctional Institution at Aliceville, a low-security prison for women, from January 2015 to August 2016. He had direct custodial, supervisory and disciplinary authority over inmates, including the victim, whom court records identify as H.G.
In January 2016, Bailey was assigned to the prison dorm unit where H.G. was housed and soon began a flirtation with her that resulted in the sexual act that took place in a staff bathroom near the dorm unit. Over the course of the flirtation that lasted several weeks, Bailey began communicating with H.G., even when he was not assigned to her dorm, including by email and telephone, according to his plea. Such communication between corrections officers and inmates is strictly prohibited.
Agents from the FBI and the DOJ Office of the Inspector General interviewed Bailey at FCI Aliceville in August 2016 about allegations of improper communications and sexual contact with H.G. Bailey falsely denied the sexual contact and told the agents he had never communicated with H.G. or other inmates by phone or email outside of his assigned role as a corrections officer, according to his plea.
The maximum penalty for abusive sexual contact is 15 years and a $250,000 fine. The maximum penalty for making false statements is eight years in prison and a $250,000 fine.
The FBI and DOJ-OIG investigated the case, which Assistant U.S. Attorney Xavier O. Carter Sr. is prosecuting.
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Former Executive Director of B.W. Cooper RMC Sentenced for Conspiracy to Misapply, Embezzle Federal Funds and to Commit Access Device FraudRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that DARRELL J. WILLIAMS, age 46, of Houston, was sentenced yesterday after previously pleading guilty to a one-count Indictment for conspiracy to misapply, embezzle federal funds and to commit access device fraud.
U.S. District Judge Jay C. Zainey sentenced WILLIAMS three years of probation, with the first year to be served on home detention. Additionally, WILLIAMS was sentenced to perform 125 hours of community service, ordered to pay $91,356.27 in restitution, and a $100 special assessment.
According to court documents, from a time unknown, but prior to January 2009, and continuing through on or about May 19, 2011, WILLIAMS, embezzled in access of $5,000 from B.W. Cooper Resident Management Corporation (B.W. Cooper RMC) and that he continued to use the B.W. Cooper RMC credit card for personal expenses.
Acting U.S. Attorney Evans praised the work of HUD-OIG in investigating this matter. Assistant United States Attorney Irene González was in charge of the prosecution.
Former Congressional Candidate Charged with FraudRead the Press Release
NORFOLK, Va. – A federal grand jury returned an indictment today charging a Hampton woman with fraud and theft of government property for allegedly stealing from the USDA’s Summer Food Service Program (SFSP).
According to the indictment, Shaun Brown, 58, worked with JOBS Community Outreach Development Corporation (JOBS), a non-profit registered in Virginia. In 2011 and 2012, JOBS was a sponsor of the U.S. Department of Agriculture’s SFSP, a federally-funded program to feed children during the summer when free-lunch programs end at the conclusion of the school year. Brown was responsible for running the SFSP for JOBS, and in 2012, Brown and others submitted fraudulent claims for reimbursement. As part of the scheme, Brown would direct staff to inflate the numbers of children actually fed and falsify documents in order to obtain additional money. In 2016, Brown was the democratic candidate for Congress in Virginia’s 2nd District.
Brown has been charged with wire fraud and theft of government property, and faces a maximum penalty 20 years in prison if convicted. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Colonel W. Steven Flaherty, Superintendent of Virginia State Police, Michael C. Westfall, Acting State Inspector General of Virginia, and Phyllis K. Fong, Inspector General for U.S. Department of Agriculture, made the announcement. Assistant U.S. Attorney Elizabeth M. Yusi is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-169.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Former Chief Financial Officer at Publicly Traded Company Charged with Accounting and Securities Fraud SchemeRead the Press Release
A former chief financial officer for Bankrate Inc., a publicly traded financial services and marketing company headquartered in North Palm Beach, Florida, was charged in an indictment unsealed today for his alleged participation in a complex accounting and securities fraud scheme.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin Greenberg of the Southern District of Florida and Inspector in Charge Regina Faulkerson of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.
Edward J. DiMaria, 52, of Fairfield County, Connecticut, was charged in an indictment filed in the Southern District of Florida with one count of conspiracy to make false statements to a public company’s accountants and to falsify a public company’s books, records and accounts; six counts of false entries in a public company’s books, records and accounts; three counts of false statements to a public company’s accountants; one count of conspiracy to commit securities fraud and wire fraud; one count of wire fraud and one count of securities fraud. DiMaria, who previously worked at Bankrate’s offices in New York City, made his initial appearance earlier today before U.S. Magistrate Judge Edwin G. Torres of the Southern District of Florida and was released on bond.
“The deceptive accounting practices that Edward DiMaria allegedly engaged in can cause real financial harm to investors, along with broader reputational harm to U.S. markets and our country,” said Acting Assistant Attorney General Cronan. “Safeguarding the integrity of our markets – while holding responsible those executives who refuse to follow the rule of law – are important priorities for the Department of Justice and our law enforcement partners.”
“This type of sophisticated financial fraud scheme can have a negative impact on the financial markets in the United States and around the world,” said Inspector in Charge Faulkerson. “Anyone who engages in such conduct should know they will not go undetected and be held accountable. The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes in order to protect investors as well as the integrity of the financial marketplace from fraudulent activities by trusted insiders who abuse their positions.”
The indictment alleges that between 2011 and 2014, DiMaria and his co-conspirators carried out a complex scheme to manipulate Bankrate’s financial statements and artificially inflate Bankrate’s earnings. According to the indictment, DiMaria and his co-conspirators allegedly engaged in so-called “cookie jar” or “cushion” accounting where over a million dollars in unsupported expense accruals were left on Bankrate’s books and then selectively reversed in later quarters to meet earnings goals. In addition, DiMaria and his co-conspirators allegedly misrepresented certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics, and made materially false statements to conceal the improper accounting entries from Bankrate’s auditors, shareholders and the investing public. The indictment further alleges that while Mr. DiMaria was misleading Bankrate’s auditors and the public about the company’s financial condition he realized millions of dollars from selling his own shares of Bankrate stock.
An indictment is merely an allegation and the defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
The U.S. Postal Inspection Service Washington, D.C. Division investigated the case. Assistant Chief Henry Van Dyck and Trial Attorneys Emily Scruggs and Jason Covert of the Criminal Division’s Fraud Section are prosecuting the case with assistance from the U.S Attorney’s Office for the Southern District of Florida. The Securities and Exchange Commission also provided assistance in this matter.
Former BB&T Bank Employee Sentenced for Stealing over $500,000Read the Press Release
Abingdon, VIRGINIA – A former BB&T employee, who over a period of approximately four years embezzled over a half-million dollar, was sentenced to more than 30 months in federal prison yesterday, United States Attorney Rick A. Mountcastle announced.
Anna B. Holt, 48, of Staffordsville, Va., was sentenced yesterday to 33 months in prison and ordered to pay $400,868 in restitution. She previously pleaded guilty to embezzlement by a bank employee of moneys of the bank or entrusted to the custody of the bank.
Holt worked for BB&T Bank as a branch banker at the New River Branch in Pearisburg, Virginia. The defendant admitted that from around 2013 to August 2017, while being employed at the bank, she embezzled a total of $584,805 from 15 separate accounts. Holt used various methods to embezzle the money, including making withdrawals from customer accounts, cashing customers’ bonds and keeping the proceeds, and creating fake credit accounts in the names of relatives and withdrawing the loan proceeds. Some of the money embezzled was used to repay accounts from which Holt had previously stolen money.
The investigation of the case was conducted by the United States Secret Service. Assistant United States Attorney Randy Ramseyer was prosecuted the case for the United States.
Florida Escort Service Owner Indicted for Allegedly Filing Fraudulent Corporate and Individual Income Tax ReturnsRead the Press Release
A Florida escort service owner has been charged in an indictment for allegedly filing fraudulent corporate and individual income tax returns.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
On December 19, Dennis Zarudny, 39, of Miami Beach, was charged in an eight count indictment with making and subscribing a false tax return, in violation of Title 26, United States Code, Section 7206(1), and aiding and abetting the filing of a false tax return, in violation of Title 26, United States Code, Section 7206(2). If convicted, Zarudny faces a statutory maximum sentence of three years in prison for each count. He also faces a period of supervised release, restitution and monetary penalties.
According to the indictment, Zarudny owns Denzar, Inc., which does business as Elite Escort Service, and is located in Miami. The indictment alleges that according to Denzar’s internet website, Denzar was a “prestigious escort agency providing 24 hour outcall escort services & adult entertainment for upscale gentlemen and couples in South Florida.” The indictment further alleges that from 2011 through 2014 Zarudny filed with the IRS fraudulent corporate and personal income tax returns that underreported his business gross receipts and the income he earned from the business.
Mr. Greenberg commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant United States Attorneys Joshua S. Rothstein and Trial Attorney Grace Albinson of the Tax Division.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty.
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.
Five indicted for firearms crimesRead the Press Release
Five people were indicted for firearms offenses, said U.S. Attorney Justin E. Herdman and ATF Special Agent in Charge Trevor Velinor.
Indicted are: Thomas O. Gibson, 24, of Akron; Gary K. Jones, 24, of Akron; Bernard Jefferson, 47, of Massillon; Duane Rine, 61, of Louisville, Ohio, and Tremaine Jackson, 28, of Cleveland.
Gibson on Oct. 6 had a Mossberg 12 gauge shotgun and ammunition, despite prior convictions for carrying concealed weapons, possession of heroin, felonious assault, improperly discharging a firearm into a home or school, and other crimes, according to the indictment.
Jones on Nov. 17 possessed a Norinco SKS 7.62 mm rifle and ammunition, despite a prior conviction for burglary, according to the indictment.
Jefferson in November possessed a Smith and Wesson handgun despite a prior conviction for aggravated drug trafficking, according to the indictment.
Rine in 2015 unlawfully transferred a Plainfield .30-caliber machinegun, according to the indictment.
Jackson in November 2016 possessed a .57-caliber pistol despite previous convictions for drug trafficking, carrying concealed weapons and having weapons while under disability, according to the indictment.
These cases are being prosecuted by Assistant U.S. Attorneys Kelly L. Galvin, Linda Barr and Aaron Howell following investigations by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Cuyahoga Metropolitan Housing Authority (Jackson case).
The cases are unrelated.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Fitchburg Woman Pleads Guilty to Role in Counterfeit Steroid ConspiracyRead the Press Release
BOSTON – A Fitchburg woman pleaded guilty today in federal court in Boston to trafficking steroids.
Elizabeth Green, 29, pleaded guilty to one count of conspiracy to distribute controlled substances before U.S. District Court Judge Allison D. Burroughs, who scheduled sentencing for March 15, 2018. Green and six others were charged in April 2017 for their roles in the conspiracy.
According to court documents, from approximately November 2015 until April 12, 2017, the conspirators manufactured steroid products made from raw materials that they purchased overseas and marketed as “Onyx” steroids using “Onyx” labels that were also ordered from overseas suppliers. Onyx, now owned by Amgen Inc., is a legitimate pharmaceutical company that does not manufacture steroids.
The defendants allegedly sold the steroids to customers across the United States using email and social media platforms, collected payment through money remitters, such as Western Union and MoneyGram, and used false identifications and multiple remitter locations to pick up the proceeds. Some of the defendants laundered proceeds from the steroid sales through Wicked Tan LLC, a tanning business in Beverly, which they owned and operated specifically to launder the proceeds of the steroid operation.
Green’s role in the conspiracy was to collect customer payments from money remitters using false identifications and provide those proceeds to another member of the organization. Green retrieved more than $220,000 in customer payments for steroid purchases.
The charge of conspiracy to distribute controlled substances provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of up to $250,000 or twice the gross gain or loss of the conspiracy. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office, made the announcement. Assistant U.S. Attorneys Amy Harman Burkart and David J. D’Addio of Weinreb’s Cybercrime Unit are prosecuting the case.
Federal Judge Approves Final Distribution of Payments to Victims of Frank Vennes Fraud SchemeRead the Press Release
Yesterday in federal court, United States District Judge Ann D. Montgomery issued an order approving a final distribution of payments to victims of FRANK E. VENNES, JR., and dissolving the Liquidating Trusteeship established to administer the Asset Distribution Plan.
“Although nothing can erase entirely the years of financial hardship and emotional stress caused by this massive fraud scheme, we hope that through the Liquidating Trustee’s administration of the Asset Distribution Plan victims have experienced some measure of relief and closure,” said Acting U.S. Attorney Gregory Brooker.
Gary Hansen, the Liquidating Trustee, noted the many complexities in liquidating the VENNES assets, which included multiple business entities; office buildings, apartment buildings, and other real estate; an extensive art and rare coin collection; and many other assets spread across the country. “This has been a long and challenging process. We appreciate Judge Montgomery’s practical and flexible approach, which permitted us to resolve issues creatively and without substantial litigation or undue administrative expense. Many of those who placed their trust in Frank Vennes lost much or all of their life savings. We have not been able to make them whole, but have worked hard to provide the maximum possible recovery from the available assets,” said Hansen.
On October 18, 2013, VENNES was sentenced to 15 years in prison for fraudulently raising money from individuals and through hedge funds for investment in Petters Company, Inc. (“PCI”). VENNES was a long-time associate of Thomas J. Petters, the Minnesota businessman who was convicted in 2009 of orchestrating a $3.65 billion Ponzi scheme. In January 2011, the Court issued an order approving an Asset Distribution Plan that provided for the distribution of cash or assets to the victims and creditors of the Vennes Defendants1, in connection to the Petters Ponzi scheme. After the final distribution, the total value of assets and cash distributed to victims and creditors through the Liquidating Trustee will total approximately $20 million.
This case was handled by the Civil Division of the U.S. Attorney’s Office for the District of Minnesota.
The case is captioned United States of America v. Frank E. Vennes, Jr., et al. Case No. 8-cv-5348 (ADM/TNL).
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
1The Vennes Defendants are: Frank E. Vennes, Jr.; Metro Gem Finance; Metro Gem, Inc.; Grace Offerings of Florida, LLC; Metro Property Financing, LLC; 38 E. Robinson, LLC; 55 E. Pine, LLC; Orlando Rental Pool, LLC; 100 Pine Street Property, LLC; Orange Street Tower, LLC; Cornerstone Rental Pool, LLC; 2 South Orange Avenue, LLC; Mandan Properties, LLC; Century Apartments, LLC; Youngstown Holdings, LLC; Metro Development Properties, LLC; Grace Offerings of St. Paul, LLC; Project Riverwatch, LLC; Friends of Hope Academy, LLC; Plando, LLC; Art Group, LLC; and Metro Gold, LLC.
Federal Grand Jury IndictmentsRead the Press Release
United States Attorney Beth Drake stated today that a Federal Grand Jury in Columbia, South Carolina, returned an Indictment against the following:
Lancaster Man and Woman Indicted on Federal Firearm Charges. Brandon Shane Polston, age 32, Austin Lee Ritter, age 23, and Kimberly Denise Cannon, age 39, all of Lancaster, were charged in a 3-count indictment with being felons in possession of firearms, possession of machineguns, and possession of machineguns and a destructive device not registered to them under the National Firearm Act, all in violation of Title 18, United States Code, Sections 2, 922(g)(1), 922(o) and Title 26, United States Code, Sections 5841, 5861(d), and 5871. Each of the charges carries a maximum of 10 years’ imprisonment, a fine of $250,000, and a term of supervised release of not more than 3 years. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Lancaster Police Department, and the South Carolina State Law Enforcement Division (SLED) and is assigned to Assistant United States Attorney Stacey D. Haynes of the Columbia office for prosecution.
The United States Attorney stated that all charges in this indictment are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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Federal Grand Jury IndictmentsRead the Press Release
United States Attorney Beth Drake stated today that on December 19, 2017, a Federal Grand Jury in Florence, South Carolina, returned an Indictment against the following:
Myrtle Beach Man Indicted for Failure to Register as a Sex Offender. Scott Borrowman, age 49, of Myrtle Beach, South Carolina, was charged in a single-count indictment with failure to register as a sex offender, a violation of Title 18, United States Code, Section 2250(a). The maximum penalty Borrowman could receive is ten years imprisonment and a fine of $250,000.00. The case was investigated by the United States Marshals Service. The case is assigned to Assistant United States Attorney A. Bradley Parham of the Florence office for prosecution.
Florence Man Indicted for Failure to Register as a Sex Offender. Tayquan Taylor, age 22, of Florence, South Carolina, was charged in a single-count indictment with failure to register as a sex offender, a violation of Title 18, United States Code, Section 2250(a). The maximum penalty Taylor could receive is ten years imprisonment and a fine of $250,000.00. The case was investigated by the United States Marshals Service. The case is assigned to Assistant United States Attorney A. Bradley Parham of the Florence office for prosecution.
Horry County Man Indicted for Illegal Reentry into the U.S. after Deportation. Juan Jose Mejia-Contador, age 23, of Horry County, South Carolina, was charged in a single-count indictment with illegal reentry into the US after deportation, a violation of Title 8, United States Code, Section 1326(a). The maximum penalty Mejia-Contador could receive is two years imprisonment and a fine of $250,000.00. The case was investigated by Immigration and Custom Enforcement-Enforcement Removal Operations. The case is assigned to Assistant United States Attorney A. Bradley Parham of the Florence office for prosecution.
Hartsville Man Indicted on Gun and Drug charges. Tyrez Lavor Johnson, age 29, of Hartsville, South Carolina, was charged in a 5 count indictment with felon in possession of a firearm, a violation of Title 18, United States Code, Section 922(g)(1) and possession with intent to distribute crack cocaine, a violation of Title 21, United States Code, Section 841(a)(1). The maximum penalty Johnson could receive is 20 years imprisonment and a fine of $250,000.00. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is assigned to Assistant United States Attorney Christopher D. Taylor of the Florence office for prosecution.
The United States Attorney stated that all charges in this Indictment are merely accusations and that the defendant is presumed innocent until and unless proven guilty.
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Drug Maker United Therapeutics Agrees to Pay $210 Million to Resolve False Claims Act Liability for Paying KickbacksRead the Press Release
Pharmaceutical company United Therapeutics Corporation (UT), based in Silver Spring, Maryland, has agreed to pay $210 million to resolve claims that it used a foundation as a conduit to pay the copays of Medicare patients taking UT’s pulmonary arterial hypertension drugs, in violation of the False Claims Act, the Justice Department announced today.
When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or deductible (collectively “copays”). These copay obligations may be substantial for expensive medications. Congress included copay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs—including the prices that pharmaceutical manufacturers can demand for their drugs. Under the Anti-Kickback Statute, a pharmaceutical company is prohibited from offering or paying, directly or indirectly, any remuneration—which includes money or any other thing of value— to induce Medicare patients to purchase the company’s product.
UT sells a number of pulmonary arterial hypertension drugs, including Adcirca, Remodulin, Tyvaso, and Orenitram (the “Subject Dugs”). The government alleged that UT used a foundation, which claims 501(c)(3) status for tax purposes, as a conduit to pay the copay obligations of thousands of Medicare patients taking the Subject Drugs. In particular, from 2010 to 2014, UT allegedly made donations to the foundation, which, in turn, used those donations to pay copays for the Subject Drugs to induce patients to purchase these drugs. The government alleged that UT routinely obtained data from the foundation detailing how much the foundation had spent for patients on each Subject Drug and that this data was used by UT to decide how much to donate to the foundation. The Government also alleged that UT had a policy of not permitting needy Medicare patients to participate in its free drug program, which was open to other financially needy patients, and instead referred Medicare patients to the foundation, which allowed claims to be submitted to Medicare.
“While we support efforts to provide patients with access to needed medications, such assistance must comply with federal law. Today’s settlement shows that the government will hold accountable drug companies that attempt to use illegal kickbacks to defeat mechanisms Congress designed to act as a check on drug pricing and healthcare costs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.
UT has also entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The five-year CIA requires, among other things, that UT implement measures designed to ensure that arrangements and interactions with third-party patient assistance programs are compliant with the law. In addition, the CIA requires reviews by an independent review organization, compliance-related certifications from company executives and Board members, and the implementation of a risk assessment and mitigation process.
“Our corporate integrity agreement requires United Therapeutics to implement controls and monitoring designed to promote true independence from any patient assistance programs to which it donates,” said Gregory E. Demske, Chief Counsel to the Inspector General for the U.S. Department of Health and Human Services. “Without true independence, a drug company can use a foundation as a conduit for improper payments that expose the taxpayer-funded Medicare program to the risk of abuse.”
“UT used a third party to do exactly what it knew it could not lawfully do itself,” said Acting United States Attorney William D. Weinreb. “According to the allegations in today’s settlement agreement, UT understood that the third-party foundation used UT’s money to cover the co-pays of patients taking UT drugs. UT’s payments to the foundation were not charity for PAH patients generally, but rather were a way to funnel money to patients taking UT drugs. The Anti-Kickback Statute exists to protect Medicare, and the taxpayers who fund it, from schemes like these that leave Medicare holding the bag for the costs of expensive drugs.”
The government’s resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The investigation was conducted by the Justice Department’s Civil Division and the U.S. Attorney’s Office for the District of Massachusetts, in conjunction with the Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation: the Department of Veterans Affairs, Office of Inspector General; and the United States Postal Inspection Service.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Dominican National Arrested and Charged with Fentanyl Conspiracy Including the Distribution of Counterfeit Pain PillsRead the Press Release
BOSTON – A Dominican national was arrested and charged today in federal court in Boston with crimes relating to his role in a wide-ranging narcotics trafficking operation that included distributing counterfeit prescription pain pills containing fentanyl throughout Boston and Cape Cod.
Santiago Pena, 49, a Dominican national residing in Roxbury, was charged by indictment with conspiracy to distribute 40 grams or more of fentanyl. The charge stems from Pena’s participation in a large-scale fentanyl and heroin trafficking ring that was dismantled in August 2017. Pena is the seventh defendant related to the drug trafficking operation to be charged in federal court; approximately 10 other defendants have been charged in state court.
According to court documents, a lengthy wiretap investigation revealed that James Ramirez, an individual charged separately, supplied large-quantities of fentanyl and heroin to Kevin and Alex Fraga, drug dealers on Cape Cod. Ramirez also sold fentanyl pills designed to look like legitimate prescription oxycodone pills. Wiretap intercepts revealed that Ramirez was distributing fentanyl pills in batches of 100 to numerous other drug dealers, and over 2,500 fentanyl pills were recovered as a result of Ramirez’s arrest in late August.
According to the indictment, Pena brokered fentanyl pill deals on Ramirez’s behalf, helping to connect Ramirez with a fentanyl pill supplier. On multiple occasions, Ramirez traded used cars for a combination of cash and fentanyl pills in deals that Pena helped arrange.
Alex Fraga, Kevin Fraga, and Ramirez each pleaded guilty in November. Their sentencings are scheduled for Feb. 8, 2018, Jan 24, 2018, and March 8, 2018, respectively
Pena faces a mandatory minimum sentence of five years and up to 40 years in prison, a minimum of four years and up to a lifetime of supervised release, and a fine of up to $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Cape and Islands District Attorney Michael O’Keefe made the announcement today. The investigation was led by the DEA Cape Cod Resident Office and the Massachusetts State Police - Cape & Islands District Attorney’s Office in conjunction with the Brewster, Harwich, Sandwich, Mashpee, Chatham, Yarmouth, and Barnstable Police Departments and the Barnstable County Sheriff’s Department. Assistant U.S. Attorney Eric Rosen of Weinreb’s Criminal Division is prosecuting the case.
Disabled Veteran Indicted on Charges of StealingRead the Press Release
St. Louis, MO – Donald Crangle was charged with theft of government funds from the Social Security Administration (SSA) and making false statements to the Veterans Administration (VA) in relation to his receipt of disability benefits from those agencies.
In 1985, while on active duty in the United States Army, Donald Crangle sustained a back injury during a motor vehicle accident. While the injury was disabling, the VA found that it did not render him unemployable upon his discharge. After suffering a significant work-place accident while employed by the St. Louis Public School System, in 2003, Crangle requested additional disability benefits from the VA by claiming that the 1985 accident prevented him from working. He also requested disability benefits from the SSA. The government agencies granted his applications in November 2003.
However, when Crangle became certified to teach Concealed Carry Weapons classes by the National Rifle Association in 2009, he failed to notify either agency. According to records seized by St. Louis County Police Officers during an investigation of his classes and those obtained from St. Charles County, between August 2009 and December 2013, Crangle’s business had gross annual earnings were as high as $130,588. Nevertheless, Crangle made numerous false statements to the VA regarding the extent of his employment, and his income. As a result of his conduct, Crangle received fraudulently more than $314,000 in government funds from the VA and SSA.
Crangle, 57, of St. Louis, was indicted by a federal grand jury today on three felony counts of theft of government funds and five counts of making false statements.
If convicted of theft of government funds, Crangle faces up to 10 years in prison, and 5 years if convicted of making false statements. Both counts also carry the possibility of a fine of up to $250,000. Restitution to the victim is also mandatory. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case was investigated by the Offices of Inspector General of the Social Security Administration and the Veterans Administration. Assistant United States Attorney Tracy Berry is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Deported Guatemalan Charged with Illegally Re-entering United StatesRead the Press Release
PITTSBURGH - An illegal alien found in Indiana County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of Illegal Re-Entry After Deportation, Acting United States Attorney Soo C. Song announced today.
The one-count indictment named Lorenzo Juarez-Perez, age 26, of Guatemala, as the sole defendant.
According to the indictment presented to the court, Lorenzo Juarez-Perez, an illegal alien, was formally removed from the United States by United States Immigration and Customs Enforcement on March 2, 2010, and on August 17, 2010. Juarez-Perez was found to be illegally present on November 26, 2017.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney James T. Kitchen is prosecuting this case on behalf of the government.
The U.S. Department of Homeland Security, Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Demopolis Man Sentenced for Child Pornography and Obstruction of JusticeRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announces that James Derrick Robertson, age 53, of Demopolis, Alabama was sentenced today after earlier pleading guilty to receiving child pornography and obstruction of justice.
According to information presented at the sentencing hearing, Robertson taught students at Demopolis High School to operate the sound system at the school. On February 18, 2017, the principal of the high school contacted the Demopolis Police Department regarding a complaint about Robertson. Pursuant to this investigation, a search warrant was executed at Robertson’s home and his computers were seized.
In court documents filed in connection with his guilty plea, Robertson admitted that an examination of his hard drive revealed that he had possessed four videos of underage girls performing fellatio on adult males. Two of the girls appeared unconconscious. A forensic search of his telephone revealed two images of toddlers who were being raped.
Robertson also admitted that he became aware of the investigation on February 19, 2017, and that he searched the internet for methods to destroy data to prevent recovery by forensic tools and then downloaded a wiping program and deleted searches for child pornography, images of child pornography and incriminating chats with minors.
At sentencing, the United States argued that the defendant had downloaded images that with titles suggesting they were of violent acts against young girls including rape. Judge Callie V. S. Granade found that Robertson was a danger to the community and ordered that he be imprisoned for 235 months, followed by a lifetime of supervised release. Robertson will be required to register as a sex offender.
This case was investigated by the Demopolis Police Department and the Federal Bureau of Investigation.
Delaware Man Pleads Guilty in Child Pornography CaseRead the Press Release
WILMINGTON, Del. – John B. Alwood pled guilty to one count of accessing with intent to view child pornography depicting a prepubescent child engaged in sexually explicit conduct, announced Acting U.S. Attorney David C. Weiss of the District of Delaware.
Alwood, 54, of Lewes, Delaware, pled guilty before Chief Judge Leonard P. Stark of the U.S. District Court of Delaware on December 18, 2017. According to statements made in court at the hearing, Homeland Security Investigations identified Alwood as accessing an online video conferencing application in order to gain sexual gratification by viewing child pornography with other men.
Alwood is being detained until sentencing where he faces a sentencing range of 37 to 46 months in prison. Alwood also faces a term of supervised release following imprisonment and will be required to register as a sex offender in any jurisdiction in which he lives, works, or attends school.
“Homeland Security Investigations will leave no stone unturned to find those who commit the terrible crime of being in possession and viewing child pornography,” said Marlon V. Miller, special agent in charge of HSI Philadelphia. “Our deepest sympathies go out to the victims of these horrendous crimes, and my sincere appreciation goes out to those men and women who relentlessly investigate and prosecute these cases.”
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 U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case was investigated by Homeland Security Investigations. Assistant U.S. Attorney Graham Robinson of the District of Delaware prosecuted the case.
Dauphin County Man Sentenced to 10 Years’ Imprisonment for Conspiracy to Distribute Large Amounts of CocaineRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Efrain Troche-Rivera, age 35, of Harrisburg, Pennsylvania, was sentenced on December 19, 2017, to 10 years’ imprisonment by United States District Court Judge Sylvia H. Rambo for conspiracy to distribute over five kilograms of cocaine hydrochloride.
According to United States Attorney David J. Freed, Troche-Rivera possessed with the intent to distribute over five kilograms of cocaine hydrochloride in Harrisburg, beginning in September 2015, and continuing through August 2016. Investigators determined that the cocaine was shipped through the mail in child booster seats from Puerto Rico into the Harrisburg area.
Co-defendant Geraldo Rodriguez-Diaz, age 23, of Harrisburg, pled guilty on December 18, 2017, before Judge Rambo to conspiracy to possess with intent to distribute more than five kilograms of cocaine and is awaiting sentencing. Rodriguez-Diaz possessed a Smith & Wesson semi-automatic handgun in connection to the offense.
This matter was investigated by the Pennsylvania Office of Attorney General and the U.S. Drug Enforcement Administration (DEA) and is being prosecuted by Assistant U.S. Attorney Chelsea Schinnour and Special Assistant U.S. Attorney Robert Smulktis.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes with firearms.
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Credit card scammers sentenced in federal courtRead the Press Release
Used skimming machines in gas pumps to steal credit card numbers and identities
PRESS RELEASE
EVANSVILLE- United States Attorney Josh J. Minkler announced today the sentencing of two Louisville area residents for their role in an elaborate scheme to steal innocent victims’ identity and make and use fraudulent credit cards. Roberto Moner, 30, Louisville, was sentenced to 48 months imprisonment by U.S. District Judge Richard L. Young, after pleading guilty to conspiracy to possess counterfeit or unauthorized access devices, possession of counterfeited or unauthorized access devices, conspiracy to produce, use, and traffic in one or more counterfeit access devices, possession of device-making equipment, and aggravated identity theft. In November 2017, Moner’s co-defendant, Adianez Herrera, 45, Louisville, was sentenced to 48 months imprisonment by Judge Young for the same charges.
“Identity theft is one of the faster growing crimes in the United States,” said Minkler. “We will not let advances in technology fall into the hands of criminals to take advantage of law-abiding citizens. Those who prey on citizens and steal their identity will be held accountable.”
In December 2015, the Jasper Indiana Police Department received information that a victim had her credit card information compromised. Law enforcement later learned that Moner installed card-skimming machines at gas stations in the Jasper Indiana vicinity. Using the skimming devices, he was able to obtain information from the credit card and download the information onto other stolen or counterfeit cards to make illegal purchases.
Moner and Herrera used the counterfeit and stolen cards to make purchases worth thousands of dollars in the Jasper area for items such as gift cards, cartons of cigarettes, and other personal items. The investigation revealed that hundreds of individuals had their credit card information stolen.
This case was investigated by the United States Secret Service, FBI and Jasper Indiana Police Department
“The success in this case demonstrates the investigative capabilities of the United States Secret Service and the collaborative efforts of our law enforcement partners” said Paul Dvorak, Special Agent in Charge of the U.S. Secret Service Indianapolis Field Office. “Our developed partnerships with other federal, state and local law enforcement agencies as well as private sector stakeholders, enables us to focus our resources to uncover, investigate and prevent these crimes more effectively.”
“The crime of identity theft and the scams associated with it have become more sophisticated and pervasive. These individuals thought they could target a small community and there wouldn’t be the resources to catch them,” said W. Jay Abbott, Special Agent in Charge of the FBI’s Indianapolis Division. “The FBI, along with our federal and local partners, is dedicated to stopping these perpetrators and educating the public on ways they can ensure they don’t fall victim to these schemes.”
According to Assistant United States Attorney Kyle Sawa who prosecuted this case for the government, Moner and Herrera must each serve three years of supervised release after their sentences and make restitution to the known victims in the case.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the office’s firm commitment to utilize and partner with the District’s law enforcement agencies to detect fraud and identity theft schemes. See United States Attorney’s Office, Southern District of Indiana Strategic Plan Section 4.5.
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Concord Woman Sentenced to 70 MonthsFor Fentanyl TraffickingRead the Press Release
CONCORD, N.H. - Felicia Jordan, 28, of Concord, New Hampshire, was sentenced to 70 months in federal prison for drug trafficking, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, Concord police offices conducted several undercover drug buys from Jordan in March 2016. On May 19, 2016, police executed a search warrant at the defendant’s residence, resulting in the seizure of almost 100 grams of fentanyl.
On September 13, 2017, Jordan pleaded guilty to one count of possession with intent to distribute fentanyl, and one count of conspiracy to distribute and possess with intent to distribute fentanyl.
“As the large number of fatal fentanyl-related overdoses in our state show, fentanyl is a deadly drug,” said Acting U.S. Attorney Farley. “The law enforcement community in New Hampshire is working hard each day to stop the flow of this deadly drug into our state. While those suffering from addiction need access to treatment, those who choose to distribute fentanyl in the Granite State will be prosecuted aggressively.”
This matter was investigated by the Concord Police Department and was prosecuted by Assistant U.S. Attorneys Shane B. Kelbley and Georgiana L. Konesky.
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Columbus, Ohio Woman Pleads Guilty to Lying to Federal Grand JuryRead the Press Release
Abingdon, VIRGINIA – An Ohio woman admitted this week to lying in a proceeding before a federal grand jury by making several false declarations in relation to her illegal sale of prescription drugs, United States Attorney Rick A. Mountcastle announced.
Shannon Kovaleski, 41, of Columbus, Ohio, pleaded guilty this week to one count of making a false declaration while under oath in a proceeding before a grand jury of the United States. The defendant faces a maximum statutory penalty of up to five year in prison and/or a fine of up to $250,000 when she is sentenced on March 22, 2018.
According to evidence presented at this week’s guilty plea hearing by Assistant United States Attorney Randy Ramseyer, Kovaleski was a witness in a federal grand jury proceeding and was asked about pills that were prescribed to her. Kovaleski told the grand jury she took the pills as prescribed and never sold them to anyone. However, in fact, she only took a pill when necessary to test positive for the drug and sold nearly all her pills to another person, earning approximately $1,000 per month.
The investigation of the case was conducted by the Drug Enforcement Administration. Assistant United States Attorney Randy Ramseyer is prosecuting the case for the United States.
Clay County Man Enters Guilty Plea to Bomb ChargeRead the Press Release
Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announces that Joshua Ryne Goldberg (22, Orange Park) today waived his right to indictment and pleaded guilty to an Information charging him with attempted malicious damage and destruction by an explosive of a building. He faces a maximum penalty of 20 years in prison, with a 5-year mandatory minimum term of imprisonment. A sentencing date has not yet been set.
According to the
plea agreement , in the summer of 2015, the FBI and law enforcement officers from Australia began investigating the online name “AusWitness” and determined that it was Goldberg. He had come to the attention of law enforcement due in part to his postings concerning the May 3, 2015, attack by two gunman at the Muhammad Art Exhibit and Contest in Garland, Texas. Prior to the attack, Goldberg posted a map of the location of the contest and urged anyone in the area to attack the event. Goldberg’s posting was copied by gunman Elton Simpson, one of the two individuals killed during the May 3, 2015, attack. The FBI later located an online posting in which Goldberg took responsibility for inspiring the Garland attack, as well as two other planned attacks.In late July 2015, an FBI confidential human source (CHS) began exchanging messages with Goldberg as “AusWitness” on social media. Between July and mid-August 2015, Goldberg discussed getting an individual in Melbourne, Australia to carry out a terrorist attack and to having the CHS commit a bombing in the United States. During portions of those conversations, Goldberg sent the CHS five website links containing instructions for making an explosive device, including pipe bombs and other incendiary devices. On August 20, 2015, Goldberg stated that he was thinking of pipe bombs at a large public event and later said that a pressure cooker bomb may be better. Later that month, Goldberg told the CHS that he had found the “perfect place” to target on September 11, 2015, and sent the CHS a link to a Kansas City, Missouri firefighter’s event that memorialized first responders that had been killed in the September 11th attacks. On August 27, 2015, Goldberg instructed the CHS to place the bomb near the crowd at the memorial event and to ensure it was very well hidden.
The following day, Goldberg provided the CHS with a list of items to use in the pressure cooker bomb, including shards of metal, nails, and broken glass. He then instructed the CHS to dip screws and other shrapnel in rat poison before putting them in the pressure cooker bomb in order to inflict more casualties. Goldberg stated he would post a video of the bombing. A forensic analysis of the bomb making information determined that it could have been used to make explosives that would cause property damage, personal injury, and/or death.
This case was investigated by the Federal Bureau of Investigation’s Joint Terrorism Task Force (JTTF) and the Clay County Sheriff’s Office. Members of the Jacksonville JTTF include the Federal Bureau of Investigation, the Naval Criminal Investigative Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection, U.S. Border Patrol, the Florida Department of Law Enforcement, Florida Highway Patrol, the St. Johns County Sheriff’s Office, and the Jacksonville Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Kevin C. Frein of the Middle District of Florida, with assistance provided by Trial Attorney Mara Kohn of the National Security Division’s Counterterrorism Section.
Citizen of the Dominican Republic Sentenced to 11 Years in Prison for Stolen Identity Refund FraudRead the Press Release
A Dominican citizen who resided in Lawrence, Massachusetts, was sentenced to 11 years in prison today after pleading guilty mid-trial to conspiring to defraud the Internal Revenue Service (IRS), access device fraud, theft of government property, aggravated identity theft and money laundering, announced Principal Deputy Assistant Attorney General Richard Zuckerman of the Justice Department’s Tax Division and U.S. Attorney William D. Weinreb for the District of Massachusetts.
According to evidence presented at trial, from 2008 through 2015, Furvio Flete-Garcia, 45, obtained the personal identification information of Puerto Rico residents and, without their knowledge or consent, paid others to prepare and file tax returns with the IRS in their names. These returns listed fake income and tax withholdings and sought fraudulent refunds. Flete-Garcia would pick up the tax refund checks from addresses he controlled and cashed them with co-conspirators for a percentage of their face value. In total, he negotiated over $7 million in fraudulent refund checks at two different check cashing businesses in Lawrence. An additional $5 million of refunds were claimed on fraudulent income tax returns presented to the IRS from 2011 to 2015 using the identities of Puerto Rican residents whose identities were on lists obtained from Flete-Garcia and presented at trial.
In addition to the term of prison imposed, United States District Court Judge Leo T. Sorokin ordered Flete-Garcia to pay $7,737,486 in restitution to the IRS. Flete-Garcia was previously sentenced in April 2016 to 28 months in prison for illegal re-entry into the United States, misuse of a social security number and aggravated identity theft.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Weinreb commended special agents of IRS Criminal Investigation, who conducted the investigation, and Senior Litigation Counsel Corey Smith and Trial Attorney Sean Green of the Tax Division, who prosecuted the case. Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Weinreb also thanked the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Secret Service, the Social Security Administration Office of Inspector General, the U.S. Postal Inspection Service and the U.S. Attorney’s Office for the District of Massachusetts for assisting in the investigation and prosecution.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Chief Financial Officer of Non-Profit Sentenced for Theft of Federal Grant FundsRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that RICKEY ROBERSON, age 49, of New Orleans, was sentenced today after previously pleading guilty to one count of theft of federal grant funds.
U.S. District Judge Kurt D. Engelhardt sentenced ROBERSON to 13 months imprisonment, restitution in the amount of $84,308, three years supervised release, and a $100 special assessment. In addition, ROBERSON will be placed on home detention with ankle monitoring for six months once released from prison.
According to court documents, from at least 2010 to the present, ROBERSON and his wife operated Alternatives Living, Inc., a non-profit that received federal funds from the United States Department of Housing and Urban Development (HUD) in the form of Community Development Block Grants (CDBG). Alternatives Living provided affordable housing to the elderly, families who were homeless, and individuals suffering from mental disabilities. As a condition to receiving federal funds, Alternatives Living agreed to comply with applicable rules and regulations governing the manner and use of the CDBG funds. Applicable program rules, including OMB Circular No. A-122, prohibited the use of CDBG funds for entertainment purposes (i.e., social activities and tickets to shows and sporting events), fundraising, personal tuition costs, and costs of goods or services for personal use. Rules allowed reimbursement for travel costs and conferences only if those costs were related to the mission of the organization and consistent with those costs normally allowed.
ROBERSON pled guilty to using CDBG federal grant funds to pay for his daughter’s cellphone bill in the amount of $4,663. As part of his plea agreement, ROBERSON agreed that he also used federal grant funds to pay for his son’s cellphone bill, personal travel, satellite radio, concert tickets, medical bills for his children, cruise expenses, and repairs to a personal Cadillac Escalade and Audi TT. ROBERSON agreed that the total amount of restitution that he owes exceeds $84,000.
Acting U.S. Attorney Evans praised the work of the Federal Bureau of Investigation, the United States Department of Housing and Urban Development, Office of Inspector General, the Office of State Inspector General, and Louisiana Legislative Auditor’s Office in investigating this matter. Assistant U. S. Attorneys Sharan E. Lieberman and Brian M. Klebba, both of the Fraud Section, were in charge of the prosecution.
Cheektowaga Man Sentenced on Child Pornography ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that Raymond Crum, 63, of Cheektowaga, NY, who was convicted of possession and receipt of child pornography, was sentenced to 20 years in prison and lifetime supervised release by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that the defendant victimized three underage females, a 12-year-old and two 15-year-olds, that he met online. Crum also communicated with the victims via text and telephone. The defendant and the victims engaged in sexually explicit communications and entered into a dominant/submissive relationship in which Crum was the dominant figure. During their communications, the victims sent the defendant sexually explicit images. Crum was aware that the victim were minors at the time he received those images.
On August 5, 2015, a search warrant was executed at the defendant’s residence in Buffalo. Officers seized two computers and a tablet. A forensic examination revealed child pornographic images and videos of the three minor victims and contained communications between the defendant and the victims. In total, Crum possessed approximately 97 images and 34 videos of child pornography.
The sentencing is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in- Charge Kevin Kelly, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda. Assistance was also provided by the Bardstown, Kentucky Police Department.
Charlotte-Area Hip-Hop Group Indicted on Fraud ChargesRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney R. Andrew Murray announced today that seven members and associates of a Charlotte-area hip-hop group known as the “FreeBandz Gang” or “FBG” have been indicted on federal charges in connection with a $1.2 million bank and identity theft fraud scheme.
The indictment charges James Murray Willingham, Jr., 23, Damonte Withers, 27, Deandre Howze, 23, Jeffrey Monteith, 22, Quadarius Thomas, 23, Laerek Williams, 25 and Nemiah Davis, 25, all of Charlotte, with multiple counts of conspiracy, bank fraud, wire fraud, and aggravated identity theft. Withers and Thomas are also charged with firearms related offenses.
A federal grand jury returned the 46-count indictment on December 13, 2017. The indictment was unsealed today, following the arraignment of Laerek Williams. Withers, Williams, and Howze were arrested by law enforcement on Friday, December 15, 2017. Willingham, originally indicted for his role in the identity fraud scheme in September, remains in federal custody. Davis is in custody on unrelated state charges in Ohio pending his transfer to the Western District of North Carolina for his initial appearance. Quadarius Thomas and Jeffrey Monteith have not been arrested yet.
U.S. Attorney Murray is joined in making today’s announcement by David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service; Matthew C. Quinn, Acting Special Agent in Charge of the U.S. Secret Service, Charlotte Field Office; and Chief Kerr Putney of the Charlotte Mecklenburg Police Department.
According to allegations contained in the indictment, the defendants are members or associates of the Charlotte-area group known as FBG. According to the indictment, FBG members identify themselves through Facebook groups, social media hashtags, tattoos, and clothing that includes FBG iconography. The indictment further alleges that FBG members use social media to raise their profile by posting hip-hop music videos and images on YouTube and Facebook that depict the members with guns, large quantities of cash, jewelry, and automobiles. The indictment alleges that members of FBG, including the defendants, financed their lavish lifestyles by engaging in fraud.
As alleged in the indictment, from February 2014 through September 2017, Withers, Howze, Monteith, Thomas, Williams, and Davis defrauded financial institutions through a check-cashing scheme involving worthless checks. According to the indictment, the conspirators carried out the scheme by depositing fake or stolen checks into straw bank accounts and then quickly withdrawing the funds before the banks completed the check-clearing process. The indictment alleges that, in some instances, the conspirators paid individuals to open new bank accounts or to let the conspirators use their existing accounts and PIN numbers to carry out the fraud. In other cases, the indictment alleges that members of the conspiracy stole ATM cards and PINs in order to access the bank accounts.
According to the indictment, the worthless checks deposited into the bank accounts either were stolen or had been altered. According to the indictment, within days of the worthless check deposits, Withers, Howze, Monteith, Thomas, Williams, and Davis withdrew as much money as possible from the straw accounts through ATM withdrawals, money order purchases, debit card purchases, and point of sale cash withdrawals, commonly referred to as getting “cash back.” The indictment alleges that by the time the banks had finished the check clearing process and had identified the deposited checks as worthless, the members of the conspiracy had completed the fraudulent activity with the straw accounts. The indictment alleges the conspirators caused losses of more than $235,000 to the victim financial institutions.
The indictment also alleges that between October 2016 and November 2017, Willingham, Withers, Howze, and other co-conspirators engaged in an identity theft scheme. According to the indictment, the conspirators used the Internet to obtain the personal identifying information (“PII”) of victims, including social security numbers, dates of birth and home addresses. The fraudsters then used the PII to manufacture fake forms of identification (IDs) in the victims’ names, and used the fake IDs to obtain credit, goods, and services in the victims’ names, including automobile loans, cellular telephones, and apartments. In many cases, the mobile devices were resold for profit. The indictment alleges that the conspirators netted more than $1,000,000 in goods and services in this manner.
The indictment charges Willingham with wire fraud conspiracy, wire fraud, bank fraud, and aggravated identity theft. Withers is charged with conspiracy to commit bank and wire fraud, bank fraud, wire fraud, possession of device-making equipment, possession of a document-making implement, aggravated identity theft, and possession of a firearm by a convicted felon. Howze is charged with conspiracy to commit bank and wire fraud, bank fraud, possession of device-making equipment, and aggravated identity theft. Monteith is charged with bank fraud conspiracy, bank fraud, and aggravated identity theft. Thomas is charged with bank fraud conspiracy, aggravated identity theft, and possession of a firearm by a convicted felon. Williams is charged with conspiracy to commit bank fraud, bank fraud, and aggravated identity theft. Davis is charged with bank fraud conspiracy, bank fraud, and aggravated identity theft.
The conspiracy to commit bank fraud and bank fraud charges each carry a maximum term of 30 years in prison and a $1,000,000 fine. The wire fraud conspiracy and wire fraud charges each carry a prison term of 20 years and a $250,000 fine. The possession of device-making and document-making charges each carry a maximum prison term of 15 years and a $250,000 fine. The aggravated identity theft charge carries mandatory term of two years in prison per count, to be served consecutively to any other term of imprisonment imposed. The firearm possession charge carries a maximum prison term of 10 years and a $250,000 fine.
The details contained in this indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In making today’s announcement, U.S. Attorney Murray thanked the U.S. Postal Inspection Service in Charlotte, the United States Secret Service’s Charlotte Field Office, and the Charlotte Mecklenburg Police Department, and noted that the case is the result of the Charlotte Financial Crimes Task Force (CFCTF). The task force was formed in early 2016 by the U.S. Postal Inspection Service and currently comprises over 25 local, state and federal law enforcement agencies located in the Western District of North Carolina. The goal of the taskforce is to focus on the identification and development of financial fraud investigations in the Charlotte area. Based on crime trends in the area, the task force began to focus its efforts on violent offenders with lengthy criminal histories who are committing fraud.
Assistant United States Attorney Dallas Kaplan, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
California Methamphetamine Dealer Sentenced to 31 Years Imprisonment for Nationwide Meth-In-The-Mail ConspiracyRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that ERNESTO MORENO, age 26, of San Fernando, California, was sentenced today after previously pleading guilty to one count of a methamphetamine drug conspiracy that included the shipping of methamphetamine from California into Louisiana via the United States Postal Service.
U.S. District Judge Kurt D. Engelhardt sentenced MORENO to 372 months, to be followed by seven years of supervised release, and $100 mandatory special assessment.
According to court documents, in September 2014, agents of the United States Postal Inspection Service and the Drug Enforcement Administration began investigating possible mailings of methamphetamine into the Eastern District of Louisiana. Investigators determined that MORENO was the source of methamphetamine for over eighteen narcotic packages that were shipped into Louisiana with the aid of co-conspirators.
Meanwhile, an investigation in Nashville, Tennessee, revealed that MORENO was directly shipping numerous packages of methamphetamine into the Middle District of Tennessee.
Acting U.S. Attorney Evans praised the work of the United States Postal Inspection Service, the Drug Enforcement Administration, Homeland Security Investigations, the Louisiana State Police, the Metropolitan Nashville Police Department, the Santa Monica Police Department, and the Los Angeles Police Department in investigating this matter. Assistant United States Attorneys James S. C. Baehr, Ryan McLaren, and Matthew Payne were in charge of the prosecution.
Buffalo Men Sentenced for Conspiring to Commit Bank FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Michael Rosier, 23, and Cody Kross-Rosier, 23, both of Buffalo, NY, who were convicted of conspiracy to commit bank fraud and bank fraud, were sentenced by U.S. District Judge Richard J. Arcara. Rosier was sentenced to 12 months in prison and Kross-Rosier was sentenced to time served and three years supervised release, to include six months of home detention.
Assistant U.S. Attorney MaryEllen Kresse, who handled the case, stated that between January and March 2014, Rosier and Kross-Rosier conspired with others to defraud and fraudulently to obtain money and funds from federally insured financial institutions. As part of the scheme, the defendants used existing bank accounts and opened new accounts at six financial institutions in order to obtain and attempt to obtain money, services and merchandise totaling over $120,000. Rosier and Kross-Rosier floated checks between the accounts in an effort to prevent the financial institutions from discovering that there were insufficient funds to cover checks deposited into and written on the accounts.
The sentencing is the culmination of an investigation by the United States Secret Service, under the direction of Special Agent-in-Charge Lewis Robinson.
Buffalo Man Pleads Guilty to Drug and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Fernando Agurto, 40, of Buffalo, NY, pleaded guilty, before U.S. District Judge Richard J. Arcara, to possession with intent to distribute cocaine and possession of a firearm in furtherance of drug trafficking activity. The charges carry a mandatory minimum of five years in prison, a maximum of life in prison, and a $1,000,000.
Assistant U.S. Attorney Patricia Astorga, who is handling the case, stated that on July 29, 2016, the Buffalo Police Department executed a search warrant at 68 Vanderbilt Street in Buffalo. While executing the warrant, officers recovered a .380 caliber pistol and brass knuckles. Officers also recovered three plastic bags containing crack cocaine inside a Pringles can, two additional bags of cocaine from a Jif peanut butter jar, a quantity of marijuana, a digital scale containing cocaine residue as well as numerous Ziploc baggies. Hidden in the ceiling above the basement stairs officers also discovered and seized $5,700 in cash.
The plea is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division.
Sentencing is scheduled for April 11, 2018, at 12:30 p.m. before Judge Arcara.
Buffalo Man Pleads Guilty to Distributing Fentanyl Which Resulted in Death and Faces A Mandatory Minimum Term of 20 Years in PrisonRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Carlique DeBerry, 38, of Buffalo, NY, pleaded guilty to distribution of fentanyl causing death before U.S. Magistrate Judge Michael J. Roemer. The charge carries a mandatory minimum penalty of 20 years in prison, a maximum of life and a $1,000,000 fine.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that on February 25, 2016, the defendant traveled to Hamburg, NY, shortly after 9:00 p.m. to the home of a repeat drug customer identified as R.G. DeBerry sold a quantity of “heroin” to R.G. then left. Shortly after midnight, R.G.'s mother found R.G. slumped over deceased in a chair.Law enforcement officers who responded to the residence seized R.G.'s cell phone. The next morning, the defendant sent a text message to R.G. stating, "Call me wen u get this bro." A police officer pretending to be R.G. responded, leading to the following exchange with the defendant:
“R.G.”: Yo my mins are about used. What's up? That was some good (expletive) last night
Defendant: K Just checkn on u thts all
“R.G.”: That was some heavy stuff wtf was up w thay
Defendant: Its pure thats whats up wit it broDeberry then arranged to sell another bundle of the “heroin” for $100.
An autopsy determined that R.G.’s cause of death was acute fentanyl intoxication.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division and the Hamburg Police Department, under the direction of Chief Gregory Wickett.
Sentencing will be scheduled at a later date before Senior U.S. District Judge William M. Skretny.
Brooklyn Man Sentenced to 15 Years’ Imprisonment for Conspiring to Provide Material Support to TerroristsRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Akhror Saidakhmetov, a citizen of Kazakhstan and resident of Brooklyn, New York, was sentenced by United States District Judge William F. Kuntz, II, to 15 years’ imprisonment for conspiring to provide material support to a designated foreign terrorist organization, the Islamic State in Iraq and al-Sham (ISIS).
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Dana J. Boente, Assistant Attorney General for National Security, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.
“Today, defendant Akhor Saidakhmetov was held accountable for attempting to travel to Syria to wage violent jihad on behalf of ISIS and his intention to kill law enforcement officers in the United States if unable to reach Syria,” stated Acting United States Attorney Rohde. “We will continue to work closely with the FBI’s Joint Terrorism Task Force in New York to disrupt those trying to support foreign terrorist organizations here or abroad and to prosecute them to the fullest extent of the law.”
“Saidakhmetov's plan was to become a battlefield soldier for ISIS, but should that not come to pass, he was prepared to bring the fight to our streets by attacking police officers and FBI agents in the U.S.,” stated FBI Assistant Director-in-Charge Sweeney. “This case highlights the challenges law enforcement faces in confronting the modern-day terrorist threat. And while this is but one of the many successful investigations carried out by the FBI and our partners on the JTTF, there’s no doubt we have more work to do.”
“The defendant in this case pledged allegiance to ISIS, attempted to travel to Syria, and spoke of purchasing a gun to kill police officers and FBI agents,” stated NYPD Commissioner O’Neill. “He’ll be removed from the United States upon completion of the 15-year sentence announced today. I want to thank the members of law enforcement and the court system for their work on this case. It’s representative of the shared responsibility we have to keep each other, our City, and our nation safe.”
According to previous court filings, beginning in August 2014, Saidakhmetov repeatedly expressed his radical pro-ISIS views and his desire to travel to Syria to fight on behalf of ISIS. In September 2014, while watching videos of ISIS training camps in Syria, Saidakhmetov stated that he was going to travel to Syria to become a “Mujahid on the path of Allah.” During the next several months, Saidakhmetov discussed with a co-conspirator their plans to travel to Syria to fight on behalf of ISIS and reached out to purported ISIS representatives for information on traveling to join ISIS.
Saidakhmetov also stated that if he were unable to travel to Syria to join ISIS, he would attack law enforcement officers in the United States. Specifically, he stated that he would purchase a handgun or machine gun and shoot police officers and FBI agents.
On February 19, 2015, Saidakhmetov purchased a ticket to travel from John F. Kennedy International Airport (JFK Airport) in Queens, New York, to Istanbul, Turkey, departing on February 25, 2015. While at JFK Airport awaiting his flight, Saidakhmetov received approximately $1,600 from a coconspirator to cover his expenses, including the purchase of a firearm after his arrival in Syria to join ISIS. Saidakhmetov was arrested while attempting to board the flight to Turkey.
Following completion of his sentence, Saidakhmetov will be removed from the United States.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant U.S. Attorneys Alexander Solomon, Douglas M. Pravda, Peter W. Baldwin and David K. Kessler of the Eastern District of New York are in charge of the prosecution, with assistance provided by Trial Attorney Steven Ward of the National Security Division’s Counterterrorism Section.
The Defendant:
AKHROR SAIDAKHMETOV
Age: 22
Residence: Brooklyn, New YorkE.D.N.Y. Docket No. 15 CR 95 (WFK)
Bradenton Man Convicted of Drug ChargeRead the Press Release
Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that a federal jury has found Alfonzo Lee Churchwell, a/k/a Boo Boo (30, Bradenton), guilty of possessing with the intent to distribute heroin and fentanyl. He faces a maximum penalty of 30 years in federal prison. A sentencing date has not yet been set.
Churchwell was indicted on October 3, 2017.
According to testimony and evidence presented at trial, two days after Churchwell, who had no source of legitimate income, was released from a prior 10-year prison sentence, he posted photographs of himself with large amounts of cash. Text messages sent from his phone advertised various controlled substances for sale. At the time of his arrest, he had fentanyl in his pocket.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Manatee County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Natalie Hirt Adams.
Boone County men plead guilty to federal gun crimesRead the Press Release
CHARLESTON, W.Va. – Two Boone County men pleaded guilty today to federal gun crimes, announced United States Attorney Carol Casto. Jason Allen Davis, 34, of Van, entered his guilty plea to aiding and abetting the theft of firearms from a federal firearms licensee. Joshua Wade Sheets, 32, of Danville, entered his guilty plea to aiding and abetting the receipt, possession, and sale of stolen firearms.
Davis and Sheets are two of four defendants indicted in August 2017 and charged with stealing guns from a Boone County firearms dealer. Davis admitted to serving as a lookout for Sheets in November 2016 while Sheets broke into the store and stole multiple firearms. Sheets admitted to arranging a sale of guns that were stolen from the same dealer in an earlier burglary.
Sheets and Davis each face up to 10 years in federal prison when they are sentenced on March 21, 2018.
The Boone County Sheriff’s Office, the West Virginia State Police, and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney James Matthew Davis is handling the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
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Bancroft Man Pleads Guilty to Bank RobberyRead the Press Release
Acting United States Attorney Robert C. Stuart announced that Lenn W. Zuhlke, age 55, of Bancroft, Nebraska, pled guilty earlier this week, in front of the Honorable Laurie Smith Camp, to bank robbery. His sentencing is set for March 19, 2018, at which time he faces 20 year’s imprisonment, a $250,000 fine, 3 years of supervised release and a $100 special assessment.
On April 20, 2017, Jeffrey Bonneau parked an ATV on the sidewalk in front of the First Bank of Bancroft. While wearing a dark motorcycle helmet and camouflage clothing, he went into the bank, around the teller counter and demanded money from a teller, while pushing her aside. He fled the bank with $6745.00. He was arrested a short time later in a grove area near 2345 R Road after he rolled the ATV.
Officers located a .22 caliber Beretta pistol, his helmet, the camouflage clothing and approximately $5225.00. Bonneau had marijuana and methamphetamine in his system when he was arrested. The ATV he drove had been stolen earlier in the day.
Zuhlke drove Bonneau to pick up the ATV, knew Bonneau was going to rob the bank and was waiting to pick Bonneau up after the robbery, before he crashed the ATV. Zuhlke pled guilty to the bank robbery as an aider and abettor.
Bonneau previously pled guilty to the bank robbery and possessing a firearm while being an unlawful user of or addicted to a controlled substance. He is scheduled to be sentenced February 26.
The case was investigated by the Federal Bureau of Investigation, Nebraska State Patrol, Bancroft Police Department, and Cuming County Sheriff’s Department.
Baltimore Man Indicted for Witness Retaliation and Tampering Resulting in the Death of a Baltimore WomanRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland - A federal grand jury in Baltimore, Maryland returned a six count indictment against Davon Carter, age 37, of Baltimore, Maryland. The indictment was unsealed today following the initial appearance of Carter in federal court. Four of the counts relate to the murder of Latrina Ashburne, age 41, on May 27, 2016. For these charges Carter faces a possible death sentence or mandatory life in prison. Carter is also charged with being a felon in possession of ammunition the day of the murder as well as possession with intent to distribute marijuana. Those charges carry a maximum term of 10 years in prison.
The indictment was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Nicholas DiGiulio of the Department of Health and Human Services, Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, and Commissioner Kevin Davis, Baltimore Police Department.
According to the six-count indictment, Carter killed Ashburne with intent to retaliate against a witness for providing to a law enforcement officer information relating to the commission and possible commission of a Federal offense and to prevent the attendance and testimony of a person in an official proceeding. The witness who was the target of the killing was not named in the Indictment.
According to the Baltimore Police Department, Ashburne was murdered in the early morning as she got into her car outside the home she shared with her mother in the 2900 block of Rosalind Ave. in the Cylburn neighborhood. The police reported that an unknown male approached and shot Ms. Ashburne in the upper body as she tried to run. At the time, the police also released a video they said showed the suspect fleeing the scene of the shooting on foot.
A detention hearing is scheduled for 1:15 p.m. today in U.S. District Court in Baltimore before a U.S. Magistrate Judge Beth P. Gesner.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Acting United States Attorney Stephen M. Schenning commended HHS, FBI and BPD, for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorneys Sandra Wilkinson and Judson Mihok, who are prosecuting the case.
Baldwin County Man Receives 46 Month SentenceRead the Press Release
The United States Attorney, Richard W. Moore, announces that Germaine Williams, a 41 year old, resident of Bay Minette, Alabama was sentenced today to 46 months incarceration followed by three years of supervised release.
According to court documents filed in connection with Williams’s guilty plea, on November 11, 2016, Baldwin County, Alabama Sheriff’s Office deputies were in a patrol car waiting in an area on the shoulder of River Road in Bromley. Deputies were looking for a white Honda that was being driven by Williams who had five outstanding arrest warrants. Deputies spotted a white Honda that was approaching them from the opposite direction. They confirmed that the driver looked like Williams. The deputies pulled in behind the Honda and watched Williams drive recklessly by failing to give the right of way. The deputies activated their blue lights and siren in an effort to stop Williams. Williams failed to stop and instead sped up. Deputies pursued Williams and observed as he continued to drive recklessly almost hitting a parked car and continuing to drive fast in an area that was populated with pedestrians. Finally, Williams reached a dead end. Williams then stopped the vehicle, exited the vehicle and ran. As he ran, he dropped a pistol and a cell phone. The firearm was a Taurus, .380 caliber pistol. A dash cam video captured the events of the attempted traffic stop and arrest. Deputies gave chase on foot but did not catch Williams that day. At that time, Williams had been convicted of a felony, namely, Unlawful Distribution of a Controlled Substance, on January 7, 2000, in the Circuit Court of Baldwin County, Alabama.
The Federal Bureau of Investigation along with the Baldwin County Sheriff’s Office investigated the case and presented it to the United States Attorney’s Office for prosecution. The prosecutor assigned to the case was Assistant United States Attorney, Gina S. Vann.
Attorney General Sessions Announces Director of Opioid Enforcement and Prevention EffortsRead the Press Release
Attorney General Sessions today announced that the Department of Justice has created a new senior level position - Director of Opioid Enforcement and Prevention Efforts (“Director”). The Director will be responsible for assisting the Attorney General, Deputy Attorney General, and Department components in formulating and implementing Department initiatives, policies, grants, and programs relating to opioids, and coordinating these efforts with law enforcement.
In announcing the position, Attorney General Sessions made the following statement: "With one American dying of a drug overdose every nine minutes, we need all hands on deck," Attorney General Sessions said. "That's why President Trump has made ending the drug epidemic a top priority. This Department of Justice embraces that goal, and we have taken a number of steps this year to do our part. We have indicted hundreds of defendants for drug related healthcare fraud, sent more prosecutors to where they're needed most, and we've taken on the gangs and cartels. Today we take the next step: creating a senior level official position at the Department to focus entirely on this issue. This Department will continue to follow the President's lead, and I am confident that we can and will turn the tide of the drug crisis."Atlanta Residents Convicted of Interstate Trafficking of a Victim for Commercial Sex PurposesRead the Press Release
United States Attorney William C. Lamar and FBI Special Agent in Charge Christopher Freeze announced today that a jury in the United States District Court for the Northern District of Mississippi has convicted two individuals of Transporting a Victim from Georgia to Mississippi to engage in prostitution. Following a two day trial in Oxford, Mississippi, a jury convicted Mario D. Collins of Memphis, Tennessee and Paulette M. Clayton of Atlanta, Georgia of trafficking the victim from Georgia to Tennessee and ultimately to Oxford, Mississippi for commercial sex purposes. Collins and Clayton will be sentenced at a later date and face up to ten years imprisonment as a result of their conviction.
An investigation conducted by the Oxford Police Department and the Federal Bureau of Investigation revealed that the female victim was transported from Atlanta, Georgia to Oxford, Mississippi by Collins and Clayton so that she could engage in prostitution. Evidence presented at trial established that OPD Officers responded to an Oxford motel on April 27, 2017, after receiving a 911 call indicating that the victim was being held against her will. Collins and Clayton were arrested in the hotel parking lot and the victim was recovered from inside the hotel. OPD Officers Joshua Shipp and Brandon Jenkins were among the officers who initially responded to the 911 call and assisted throughout the investigation and trial of the case.
Assistant United States Attorneys Clay Dabbs and Sam Stringfellow represented the United States in this case and FBI Special Agent Walter Henry and OPD Detective Chad Carwile spearheaded the investigation.
Following the conviction, United States Attorney William C. Lamar noted, “Human trafficking is not a victimless crime. Women, many of whom are very young, are often coerced into prostitution by predators, taken advantage of, and are frequently victims of violence. Along with federal, state and local law enforcement, we will continue to address this problem in our District and prosecute those responsible. I congratulate and thank Special Agent Walter Henry of the FBI, Investigator Chad Carwile of the Oxford Police Department, and Assistant U.S. Attorneys Clay Dabbs and Sam Stringfellow for jobs well done.”
“Forcing someone into prostitution is reprehensible and has no place in our society,” said FBI Special Agent in Charge Freeze. “Human trafficking is believed to be the third-largest criminal activity in the world, and must be addressed at the interagency level. Partnerships between federal, state and local law enforcement agencies are key in these types of cases, and we appreciate everyone involved in bringing justice to those being trafficked.”
19 December 2017
Woman Charged in White Plains Federal Court with Sex Trafficking of A MinorRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Donald B. Smith, Putnam County Sheriff, announced today that JENNIFER COVIELLO was arrested for the sex trafficking of a 17-year-old girl. COVIELLO was presented before U.S. Magistrate Judge Lisa Margaret Smith in White Plains federal court this afternoon.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Jennifer Coviello coerced a child to engage in commercial sex acts for Coviello’s profit, introducing the minor to illegal drugs, and fostering a drug dependency in the process. Today’s arrest takes an allegedly dangerous woman off the street and is a testament to the continued cooperation between our federal and local law enforcement partners to combat the exploitation of children in our communities.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “There are simply no words to express how despicable human behavior can be at times, and in law enforcement we see a lot of lows in human behavior. But for a woman to allegedly sell an underage girl for sex is too much to understand. The FBI agents and law enforcement officers who investigate these cases each day should be truly commended for their work, and their dedication to save these children from adults who put them in harm’s way just to make a dollar.”
Putnam County Sheriff Donald B. Smith said: “My office is grateful to the U.S. Attorney’s Office and the FBI for their diligent work in helping to put an end to this deplorable case, stopping the victimization of a young woman and bringing the perpetrator to justice. This case is yet another example of how effective law enforcement can be when local agencies, the FBI, and the U.S. Attorney’s Office all work together to fight crime and to help keep Putnam County and the Hudson Valley safe.”
According to the allegations in the Complaint[1] filed in White Plains federal court:
In December 2017, COVIELLO posted online advertisements soliciting prostitution customers for herself and the victim (“Victim-1”). When COVIELLO received inquiries in response to the advertisements, she emailed and sent by text message photographs of Victim-1, including nude and partially nude photographs. For approximately a week, COVIELLO operated her commercial sex business out of a motel in Putnam County, where she arranged for customers to meet her and Victim-1 to engage in commercial sex acts in exchange for cash. During that week, COVIELLO provided Victim-1 with illegal drugs, including heroin, and arranged for Victim-1 to misrepresent to customers that she was over 18 years old. COVIELLO kept the bulk of the profits from the commercial sex acts.
* * *
COVIELLO, 43, is charged with one count of sex trafficking of a minor, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison; and one count of use of interstate facilities to promote a prostitution enterprise, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
The investigation was conducted by the FBI’s Westchester County Safe Streets Task Force with the assistance of the Putnam County Sherriff’s Department. Mr. Kim praised the outstanding investigative work of the FBI and the Putnam County Sherriff’s Department.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Jacqueline Kelly is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the charged offenses set forth herein constitute only allegations, and every fact described should be treated as an allegation.
White Plains Woman Pleads Guilty to Bank FraudRead the Press Release
BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Vanessa Cardona, 28, of White Plains, NY, pleaded guilty, before U.S. District Judge Lawrence J. Vilardo, to conspiracy to commit mail fraud. The charge carries a maximum penalty of 30 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney’s Trini E. Ross and Stephanie O. Lamarque, who are handling the case, stated that between December 2015 and October 2016, the defendant worked with co-defendants Sergiy Bezrukov, Mark Farnham, and Dustin Walker at what purported to be debt-restructuring companies which had various names including “Corporate Restructure.” The defendant herself used alias names, including “Emily Goldstein” and “Rebecca Epstein,” while assisting with the fraudulent debt restructuring businesses.
Cardona trained employees in the mailroom of the Salamanca, NY, office on the operation of NEO Post machines, which were used to create mass mailings of fraudulent solicitation letters that were sent to small business owners. Those letters, which contained fraudulent solicitations to small business owners seeking monies from them in order to assist them in restructuring high-interest loans held by other lenders, originated from New York City, New Jersey, and Salamanca. Such letters directed the small business owners to return documents to Corporate Restructure via private carriers, including Federal Express.
Co-defendant Dustin Walker has been convicted and is scheduled to be sentenced on February 2, 2018. Charges remain pending against Sergiy Bezrukov and Mark Farnham. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the result of an investigation by the United States Postal Inspection Service, under the direction of Inspector-in-Charge Shelly Binkowski of the Boston Division; the Internal Revenue Service, Criminal Investigations Division, under the direction of James D. Robnett, Special Agent-in-Charge, New York Field Office; and Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent-in-Charge Kevin Kelly.
Sentencing is scheduled for April 9, 2018, at 2:00 p.m. before Judge Vilardo.
Westerly Resident Arraigned on Child Pornography, Enticement, Transfer of Obscene Materials to a Minor ChargesRead the Press Release
PROVIDENCE – A Westerly man will continue to be held in federal custody following his arraignment on a superseding indictment charging him with receipt, possession and distribution of child pornography, enticement of a minor to engage in illicit sexual activity, and transferring obscene material to a minor.
Jonathan Breslin, 32, of Westerly, pleaded not guilty on Monday before U.S. District Court Magistrate Judge Patricia A. Sullivan to a five-count superseding indictment charging him with the one count each of possession, receipt and distribution of child pornography, transfer of obscene material to a minor, and enticement of a minor to engage in illicit sexual activity. The superseding indictment was returned on December 6, 2017.
Breslin has been detained since his arrest on August 9, 2017, after a court authorized search of his residence by agents from Homeland Security Investigations (HSI), the Rhode Island State Police Internet Crimes Against Children Task Force, and members of the Westerly and Warwick Departments resulted in the seizure of a computer, a digital media storage device and cell phone allegedly containing child pornography.
Breslin’s arraignment and detention are announced by Acting United States Attorney Stephen G. Dambruch; Michael S. Shea Acting Special Agent in Charge of Homeland Security Investigations for New England; Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police; Westerly Police Chief Richard G. Silva; and Warwick Police Chief Colonel Stephen M. McCartney.
According to court documents, it is alleged that in late March 2016, a law enforcement officer in Saskatchewan, Canada, arrested an individual in an unrelated matter. A search of a cell phone belonging to the individual resulted in the discovery of an online mobile chat application allegedly used to discuss and share child pornography images and videos to a network of users. Saskatchewan law enforcement agents identified 78 unique users who allegedly shared and/or communicated about child pornography. The information was provided to Homeland Security Investigations, who, through further investigation, identified IP addresses in the United States that were allegedly used to participate in some of the conversations, and/or to upload and view child pornography. Among the IP address identified was one allegedly belonging to Breslin.
Further investigation by an HSI agent in Rhode Island included online chats between Breslin and the agent posing as an individual interested in discussing, viewing and sharing child pornography. It is alleged that Breslin discussed viewing, possessing and attempted production of child pornography. Additionally, according to the superseding indictment, it is alleged that Breslin transferred obscene material to a person under the age of 16 and attempted to entice a minor to engage in illicit sexual activity.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Possession of child pornography and transfer of obscene material to a person under the age of 16 are punishable by statutory penalties of up to 10 years in federal prison. Receiving and distribution of child pornography are punishable by statutory penalties of 5-20 years in federal prison. Enticing a minor to engage in illicit sexual activity is punishable by statutory penalties of between 10 years- life in federal prison.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
The Rhode Island ICAC Task Force is comprised of law enforcement personnel from the Rhode Island State Police, Homeland Security Investigations, United States Postal Inspection Services, and the Warwick, Cranston, East Providence, Newport, Pawtucket, North Kingstown, Portsmouth, and Woonsocket Police Departments.
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West Haven Man Pleads Guilty to Possessing Firearms While Addicted to OxycodoneRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that TIMOTHY O’MARA, 36, of West Haven, waived his right to be indicted and pleaded guilty today in New Haven federal court to one count of possessing firearms while being an unlawful user of a federally controlled substance.
According to court documents and statements made in court, on September 13, 2016, members of the ATF’s New Haven Task Force arrested O’MARA at his West Haven residence. Task force officers conducted a search of O’MARA’s person and found a cigarette box that contained oxycodone pills, and several straws with a powdery residue, which O’MARA admitted would test positive for the presence of drugs. A search of O’MARA’s residence on that date revealed two pistols, four rifles, two shotguns and assorted ammunition. Subsequent analysis of O’MARA’s cell phone revealed text messages in which O’MARA repeatedly arranged for the illegal purchase of oxycodone pills.
The charge of possession of a firearm by an unlawful user of a controlled substance carries a maximum term of imprisonment of 10 years. O’MARA is scheduled to be sentenced by Chief U.S. District Judge Janet C. Hall on March 13, 2018. He is released on a $10,000 bond pending sentencing.
This matter is being investigated by the ATF’s New Haven Task Force with the assistance of the New Haven Police Department. The case is being prosecuted by Assistant U.S. Attorney Michael E. Runowicz.
Washington Man Sentenced to Federal Prison for Threatening to Damage ComputersRead the Press Release
GREENSBORO, N.C. – A Wenatchee, Washington man was sentenced to 37 months in federal prison after pleading guilty to threatening to damage computers at a Chapel Hill business, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
Todd Michael GORI, Jr., 28, was sentenced on December 19, 2017, by the Honorable William L. Osteen, Jr., United States District Judge for the Middle District of North Carolina. GORI pleaded guilty on September 6, 2017, to one count of threatening to damage protected computers, in violation of Title 18, United States Code, Section 1030(a)(7)(A). GORI had sent an email message to a Chapel Hill healthcare corporation on April 18, 2016, threatening a cyber attack unless that business fired one employee and hired GORI instead. GORI sent that email from his Wenatchee, Washington residence to the business in Chapel Hill, North Carolina.
In addition to a 37-month term of imprisonment, Judge Osteen, Jr., sentenced GORI to 3 years of supervised release.
The Federal Bureau of Investigation’s Raleigh Cyber Squad investigated the case, which was prosecuted by Assistant United States Attorney Anand Ramaswamy, Cybercrime prosecutor for the Middle District of North Carolina.
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Victoria Man Indicted for Defrauding EmployerRead the Press Release
VICTORIA, Texas - A 47-year-old Victoria resident made an appearance in Houston federal court on charges of wire fraud, announced Acting U.S. Attorney Abe Martinez
A federal grand jury returned a 10-count indictment against Murray Wade Carson on Dec. 6, 2017. He appeared before U.S. Magistrate Judge Dena Palermo at 2:00 p.m. today. Trial has been set before Senior U.S. District Judge Rainey in Victoria.
The indictment alleges Carson worked in Sweeney for a supply company. While employed there, he allegedly setup the Kirby Taylor Company unbeknownst to his employer. During his employment, Carson devised a scheme to defraud by using his employer’s credit card to purchase non-existent goods and products from the Kirby Taylor Company, according to the indictment.
The charges allege the scheme lasted from approximately 2007 through June 2015 and caused a loss of $1,272,019.23 to his former employer.
The indictment seeks a forfeiture of the $1,272,019.23.
If convicted, Carson faces up to 20 years imprisonment and a possible $250,000 maximum fine.
The FBI conducted the investigation. Assistant U.S. Attorney John Braddock is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
United Technologies Corporation Pays More Than $1 Million to Resolve False Claims ViolationsRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that UNITED TECHNOLOGIES CORPORATION (“UTC”) has entered into a civil settlement agreement with the federal government and paid $1,060,000 to resolve federal False Claims Act violations involving Goodrich Pump and Engine Controls Systems, a company UTC indirectly owned from July 2012 through March 2013.
As alleged in the settlement agreement, Rolls-Royce was a prime contractor to the U.S. Army, and Goodrich Pump and Engine Controls Systems (GPECS) was a subcontractor to Rolls Royce. GPECS sold its Full Authority Digital Engine Control Units, which includes the Engine Control Unit (FADEC/ECU), to Rolls-Royce Corporation for installation into its M-250 series engines. The M-250 series engines were then sent to the U.S. Army for installation into U.S. Army helicopters, specifically the OH-58 Kiowa Warrior aircraft and A/MH-6M Mission Enhanced Little Bird (MELB). From 2005 to 2012, GPECS purchased, shipped and caused counterfeit microprocessors to be integrated into FADEC/ECU assemblies, which were then incorporated into the M-250 series engine, ultimately for the Kiowa Warrior aircraft and MELB.
It is further alleged that from 2005 through 2012, GPECS provided to the government numerous false certifications as to the authenticity of the FADEC/ECU assemblies, and that 172 false certifications occurred between 2011 and 2012, alone.
“Federal contractors must abide by the certification requirements set forth in government contracts so that taxpayer dollars are not wasted, and our national security is not threatened,” said U.S. Attorney Durham. “Vulnerabilities caused by counterfeit parts will not be tolerated. We thank the Defense Criminal Investigative Service and U.S. Department of Transportation Office of Inspector General for thoroughly investigating this matter, and UTC for cooperating with the government’s investigation.”
“This settlement agreement is the direct result of a successful investigation conducted by the Defense Criminal Investigative Service (DCIS), the DOT-OIG and the U.S. Attorney’s Office, District of Connecticut,” stated Special Agent-in-Charge Leigh-Alistair Barzey, DCIS Northeast Field Office. “The integrity of the DoD’s supply chain is of critical importance to America’s national security and DCIS is committed to working with the DOJ and its law enforcement partners to ensure that counterfeit materials do not endanger U.S. military forces.”
This matter was investigated by the Defense Criminal Investigative Service and the U.S. Department of Transportation’s Office of Inspector General, and was handled within the U.S. Attorney’s Office by Assistant U.S. Attorney Ndidi N. Moses.
United States Files Suit Against North Suburban Diagnostics Company for Allegedly Billing Medicare for Unnecessary Home Sleep TestsRead the Press Release
CHICAGO — The United States has filed a civil lawsuit accusing a north suburban diagnostics company of defrauding Medicare out of millions of dollars through kickbacks and unnecessary home sleep testing.
The suit alleges that SNAP DIAGNOSTICS LLC, its founder, GIL RAVIV, and its marketing vice president, STEPHEN BURTON, violated the federal False Claims Act by fraudulently billing Medicare for medically unnecessary services and for services that were occasioned by kickbacks. The suit alleges that Raviv directed SNAP to submit claims for Medicare recipients’ second and third nights of home sleep testing when, in fact, the company knew that only a single night of testing was needed to effectively diagnose obstructive sleep apnea and it routinely tested and claimed only the one night for non-Medicare beneficiaries. SNAP’s business model also relied on several unlawful kickback schemes, which incentivized physicians and their staffs to refer all of their home sleep testing services to SNAP, the suit alleges.
The government’s complaint was filed Monday in U.S. District Court in Chicago. On Oct. 18, 2017, the government notified the Court that it was intervening in two separate lawsuits, each initially filed under seal by a private citizen pursuant to the qui tam, or whistleblower, provisions of the False Claims Act.
The lawsuit was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The U.S. Department of Health and Human Services, the U.S. Railroad Retirement Board, and the U.S. Office of Personnel Management assisted in the investigation. The government is represented by Assistant U.S. Attorney Sarah J. North.
Wheeling-based SNAP is a nationwide provider of home sleep testing diagnostic services. SNAP’s home sleep tests are covered by Medicare when medically necessary to diagnose obstructive sleep apnea, a common disorder in which airflow is obstructed during sleep. Home sleep testing utilizes a portable monitor, unattended and initiated by the patient, to collect information about breathing and oxygen levels while the patient sleeps at home. The testing assists physicians in diagnosing apnea and establishing a treatment plan.
According to the government’s lawsuit, SNAP paid commissions and bonuses to its sales force for selling the multi-night testing to providers, and it gave free home sleep tests to physicians and their families to induce referrals. After the testing was performed, SNAP personnel interpreted the results and gave unsigned reports to referring physicians, who in turn would bill as if the physicians had performed the professional service of interpreting the results themselves, the suit states. The suit contends that SNAP intentionally allowed physicians to fraudulently bill for this service as a way of increasing referrals and driving the volume of SNAP’s business.
Since Medicare began covering home sleep testing in 2009, SNAP has received nearly $9 million from Medicare, almost all of it the result of fraud and kickbacks, according to the suit.
The False Claims Act permits private individuals to sue for false claims on behalf of the government and to share in any recovery. The Act also allows the government to intervene or take over the lawsuit, as it has done in this case, and to recover three times its damages plus civil penalties ranging from $5,500 to $11,000 for each false claim submitted by the defendants.
The public is reminded that civil allegations are accusations only, and there has been no determination of liability.
U.S. Postal Service Mail Carrier Sentenced to More Than Eight Years in Prison in Stolen Identity Tax Refund SchemeRead the Press Release
A U.S. postal worker was sentenced to 97 months in prison for his role in a stolen identity refund fraud conspiracy, announced Principal Deputy Assistant Attorney General Richard Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Charles E. Peeler for the Middle District of Georgia.
Harold Coley was convicted by a jury in Columbus, Georgia, in September of conspiring to file fraudulent refund claims, mail fraud, and embezzlement of mail. According to the evidence presented at trial, Coley worked as a mail carrier for the U.S. Postal Service assigned to a postal route in Columbus. In 2012, Coley was recruited by co-conspirator Keisha Lanier to participate in a stolen identity tax refund scheme. Coley compiled addresses ostensibly related to streets on his route, including many addresses that did not exist or related to vacant buildings, and provided them to Lanier and others for the purpose of filing fraudulent tax returns with the Internal Revenue Service (IRS). Lanier obtained many of the stolen identities used for the returns from co-conspirator Tamika Floyd who worked for the Alabama Department of Public Health. The stolen identities primarily belonged to 16 and 17 year-olds.
Lanier and others directed the IRS to mail the fraudulent tax refund checks to the addresses Coley provided. In exchange for cash, Coley intercepted these checks and provided them to Lanier and others. Coley’s co-conspirators directed over 1,600 refund checks totaling more than $2.5 million to addresses on his postal route. Lanier and Floyd were convicted and previously sentenced to prison for their roles in the scheme.
In addition to the term of prison imposed, Chief U.S. District Judge Clay D. Land ordered Coley to serve three years of supervised release and pay $901,351 in restitution to the IRS.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Peeler commended special agents of IRS Criminal Investigation and the U.S. Postal Inspection Service, who conducted the investigation, and Trial Attorneys Michael C. Boteler and William Montague of the Tax Division, who prosecuted the case, with assistance from the U.S. Attorney’s Office for the Middle District of Georgia.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Two Physician Groups Pay over $33 Million to Resolve Claims Involving HMA HospitalsRead the Press Release
The Justice Department today announced settlements with two physician groups, EmCare Inc. (EmCare) and Physician’s Alliance Ltd (PAL), for allegedly receiving illegal remuneration in exchange for patient referrals to hospitals owned by the now-defunct Health Management Associates (HMA).
Dallas-based EmCare provides physicians to hospitals to staff their Emergency Departments (EDs). Under the settlement with EmCare, the physician group will pay $29.6 million to resolve allegations that, from 2008 through 2012, EmCare received remuneration from HMA to recommend patients be admitted to HMA hospitals on an inpatient basis when the patients should have been treated on an outpatient basis. On average, Medicare pays at least three times as much for an inpatient admission as it does for outpatient care. As part of the alleged scheme, HMA made certain bonus payments to EmCare ED physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increased admissions of patients who came to the ED.
In a separate settlement, PAL, headquartered in Lancaster, Pennsylvania, and three of its executives, Lee Meyers, Michael Warren, M.D. and Wallace Longton, M.D., agreed to resolve allegations that, from 2009 until 2012, PAL accepted illegal remuneration from HMA to refer patients to two HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center. Under the settlement, PAL and its executives will pay $4 million plus a percentage of proceeds from the sale of PAL’s interest in a joint venture with HMA.
“These settlements demonstrate our commitment to ensuring that physician judgment is not compromised by illegal inducements,” said Acting Assistant Attorney General for the Justice Department’s Civil Division, Chad A. Readler. “Patient care decisions should be based on the needs of patients rather than the financial interests of physicians.”
Envision Healthcare Corporation (Envision) has also entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General as part of the resolution of the EmCare matter. EmCare is a subsidiary of Envision.
“Improper physician inducements not only compromise sound medical decision-making, but also cost American taxpayers millions in unnecessary medical costs,” said U.S. Attorney for the Western District of North Carolina Andrew Murray. “Such kickback arrangements will not be tolerated.”
“These physicians prioritized their own financial interests over the needs of their patients,” said United States Attorney Louis D. Lappen for the Eastern District of Pennsylvania. “Such conduct compromises patient care and undermines the integrity of our nation’s federal health care programs. This settlement should serve as a warning to all providers who allow financial incentives to displace their medical judgment.”
“The Hippocratic oath enjoins physicians to do no harm, not maximize profits by pocketing illegal referral payments,” said Nicholas DiGiulio, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Physicians that stray from their oath should not be surprised when they come under law enforcement scrutiny.”
"This settlement is a direct result of the FBI's dedication to hold companies accountable for their role in healthcare fraud and abuse, and it would not have been possible without the teamwork between FBI Atlanta, the FBI Headquarters' Major Provider Response Team, DOJ, and our partners," said FBI Assistant Director Stephen E. Richardson. "Since 2011, the FBI and our partners have returned over $1.25 Billion to private and public healthcare programs from these "whistleblower" investigations. The FBI is committed to safeguarding the public's trust in a health care system that places patient care, not financial gain, as their primary focus."
Under the qui tam, or whistleblower, provisions of the False Claims Act, private individuals may sue on behalf of the government for false claims and share in any recovery. The EmCare settlement resolves a qui tam lawsuit filed by Drs. Thomas Mason and Stephen Folstad, whose medical practice, MEMA, previously supplied ED physicians to two HMA hospitals in North Carolina. In connection with the settlement, Drs. Mason and Folstad will receive $6,222,907.
In a separate action, George E. Miller and Michael J. Metts, former HMA hospital executives, filed suit in the Eastern District of Pennsylvania alleging the scheme between PAL and HMA. Miller’s and Metts’ share of the settlement has not yet been determined.
The settlements were the result of a coordinated effort by the Civil Division of the Department of Justice and, in the EmCare matter, the United States Attorney’s Office for the Western District of North Carolina, and in the PAL matter, the United States Attorney’s Office for the Eastern District of Pennsylvania. The investigations were conducted by the Office of Inspector General of the United States Department of Health and Human Services and the Federal Bureau of Investigation.
The cases are captioned United States ex rel. Mason et al., Case No. 1:14-cv-579 (D.D.C.), and United States ex rel. Miller & Metts v. HMA, et al, Case No. 14-00339 (D.D.C.).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
Two Men Plead Guilty to Medicare Fraud Scheme in Rio Grande ValleyRead the Press Release
McALLEN, Texas ‐ A former laboratory technician at a medical clinic in Mission and an account representative for a toxicology testing company have entered guilty pleas in connection with a scheme to defraud Medicare, announced Acting U.S. Attorney Abe Martinez.
Ivar Cantu, 46, of Palmview, pleaded guilty today, while co-defendant Omar Solis, 35, of Mission, pleaded guilty Dec. 7. Both admitted to conspiring to commit health care fraud.
Cantu and Solis fraudulently set up an account between the medical clinic where Solis was employed as a laboratory technician and the toxicology testing company for whom Cantu was an account representative. During the latter half of 2015, Solis misappropriated patient urine specimens from the medical clinic and sent them to the toxicology testing company without consent of the patient or doctor in order to receive commissions and collection fees from the testing company. In order to carry out the scheme, Cantu and Solis forged patient signatures, falsified medical records and created fictitious documents.
As a result of the scheme, Medicare was billed $836,788 between May 2015 and December 2015.
Sentencing for both Solis and Cantu is scheduled for Feb. 28, 2018, before U.S. District Judge Micaela Alvarez. At that time, both men face up to 10 years in federal prison as well as a possible $250,000 maximum fine.
The FBI, Department of Health and Human Services‐Office of Inspector General and Texas Health and Human Services Commission conducted the investigation. Assistant U.S. Attorney Andrew Swartz is prosecuting the case.
Thibodaux Woman Charged with Wire Fraud While Holding Power of Attorney for Terminally Ill Mother and Theft of Government Check from Disabled SisterRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that JILL ANDRAS LEBLANC, a/k/a JILL FREMIN, 38, of Thibodaux, was charged yesterday in a Superseding Bill of Information with one count of wire fraud and one count of theft of government funds.
LEBLANC was originally charged by Indictment on July 21, 2017. The Indictment alleged LEBLANC stole several hundred thousand dollars from her mother's retirement account. More specifically, LEBLANC was appointed power of attorney on October 29, 2008 for her mother who was terminally ill with cancer. The defendant's father, an oil field worker, had accumulated a substantial individual retirement account (IRA) during his working life. He passed away several years prior to 2011. This investment account was managed by a national brokerage house whose home offices are in Minneapolis, Minnesota. During the defendant's administration of her mother's account, she stole approximately $369,701 from the account and spent it on personal, frivolous items.
The Superseding Bill of Information filed today added a count alleging LEBLANC stole a Social Security disability check meant for her disabled sister in the amount of $13,500.
If convicted, LEBLANC faces a possible maximum sentence of 20 years imprisonment on the wire fraud count, and/or a fine of $250,000 and up to three years of supervised release. On the theft of government property, LEBLANC faces ten years imprisonment. Acting U.S. Attorney Evans reiterated that a Bill of Information is merely a charge and the guilt of the defendant must be proven beyond a reasonable doubt.
Acting U.S. Attorney Evans praised the work of the Internal Revenue Service, Criminal Investigation in investigating this matter. Assistant U.S. Attorney Carter K. D. Guice, Jr. of the Fraud Unit is in charge of the prosecution.