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21 November 2017
Owner of Two Miami Home Health Agencies Sentenced to More Than Six Years in Prison for Role in $74 Million Medicare Fraud ConspiracyRead the Press Release
The owner and operator of two defunct Miami home health agencies was sentenced today to 80 months in prison for her role in a $74 million conspiracy to defraud the Medicare program.
Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office, made the announcement.
Sila Luis, 59, of Miami, Florida, was sentenced by U.S. District Judge Marcia G. Cooke of the Southern District of Florida. Judge Cooke also ordered the defendant to pay $45 million in restitution and to forfeit the gross proceeds traced to the offense. Luis pleaded guilty on June 28, to one count of conspiracy to commit health care fraud.
As part of her guilty plea, Luis admitted that, between January 2006 and June 2012, she and her co-conspirators agreed to, and actually did, operate LTC Professional Consultants Inc. (LTC) in order to fraudulently bill the Medicare program for home health care services, including diabetic injections, skilled nursing visits, physical therapy, and other treatments and services. Professional Home Care Solutions Inc. was another home health agency under Luis’s ownership and control that was involved in the conspiracy. Luis further admitted that she and her co-conspirators enlisted and paid patient recruiters kickbacks and bribes in exchange for the referral of Medicare beneficiaries to LTC. Had Medicare known that Luis paid bribes and kickbacks to attract beneficiaries to her facilities, Medicare would not have paid any claims submitted on behalf of those beneficiaries.
Judge Cooke determined at sentencing that Luis was responsible for an intended loss of $74 million to the Medicare program.
Luis was charged along with Elsa Ruiz, 49, and Myriam Acevedo, 68, both of Miami, Florida, in an indictment returned on Oct. 3, 2012. Acevedo pleaded guilty in May 2013 to conspiracy to pay health care kickbacks and payment of kickbacks in connection with a federal health care benefit program. She was sentenced to 60 months in prison and ordered to pay $27 million in restitution. Ruiz pleaded guilty to conspiracy to commit health care fraud. She was sentenced to 80 months in prison and ordered to pay $45 million in restitution.
The FBI and HHS-OIG investigated this case. Trial Attorneys David Snider, Patrick Mott, and L. Rush Atkinson of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
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.
Owner of Two Miami Home Health Agencies Sentenced to More Than Six Years in Prison for Role in $74 Million Medicare Fraud ConspiracyRead the Press Release
The owner and operator of two defunct Miami home health agencies was sentenced today to 80 months in prison for her role in a $74 million conspiracy to defraud the Medicare program.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Sila Luis, 59, of Miami, Florida, was sentenced by U.S. District Judge Marcia G. Cooke of the Southern District of Florida. Judge Cooke also ordered the defendant to pay $45 million in restitution and to forfeit the gross proceeds traced to the offense. Luis pleaded guilty on June 28, to one count of conspiracy to commit health care fraud.
As part of her guilty plea, Luis admitted that, between January 2006 and June 2012, she and her co-conspirators agreed to, and actually did, operate LTC Professional Consultants Inc. (LTC) in order to fraudulently bill the Medicare program for home health care services, including diabetic injections, skilled nursing visits, physical therapy, and other treatments and services. Professional Home Care Solutions Inc. was another home health agency under Luis’s ownership and control that was involved in the conspiracy. Luis further admitted that she and her co-conspirators enlisted and paid patient recruiters kickbacks and bribes in exchange for the referral of Medicare beneficiaries to LTC. Had Medicare known that Luis paid bribes and kickbacks to attract beneficiaries to her facilities, Medicare would not have paid any claims submitted on behalf of those beneficiaries.
Judge Cooke determined at sentencing that Luis was responsible for an intended loss of $74 million to the Medicare program.
Luis was charged along with Elsa Ruiz, 49, and Myriam Acevedo, 68, both of Miami, Florida, in an indictment returned on Oct. 3, 2012. Acevedo pleaded guilty in May 2013 to conspiracy to pay health care kickbacks and payment of kickbacks in connection with a federal health care benefit program. She was sentenced to 60 months in prison and ordered to pay $27 million in restitution. Ruiz pleaded guilty to conspiracy to commit health care fraud. She was sentenced to 80 months in prison and ordered to pay $45 million in restitution.
The FBI and HHS-OIG investigated this case. Trial Attorneys David Snider, Patrick Mott, and L. Rush Atkinson of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
Orchard Park Pain Doctor Arrested; Charged with Using Patient Names Fraudulently to Obtain Controlled SubstancesRead 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 Dr. Paul Biddle, 53, of Amherst, NY, was arrested and charged by criminal complaint with obtaining controlled substances through fraud and identity theft. The drug charges carry a maximum possible term of four years in prison, while the identity theft charges carry a maximum possible term of five years in prison.
Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that Biddle is an anesthesiologist and pain management doctor who also operates a medical marijuana practice.
According to the complaint, in September 2017, federal agents reviewed information from the New York State Bureau of Controlled Substances/Bureau of Narcotic Enforcement (BNE) regarding prescriptions issued by the defendant. The review showed that Biddle was prescribing controlled substances for 23 of his patients through a pharmacy in Tampa, Florida. Such prescriptions, which were paid for without using insurance, were sent directly to the defendant’s home address in Amherst or his office in Orchard Park, NY. Between November 11, 2013, to October 16, 2017, Biddle wrote and received a total of 888 prescriptions for controlled substances in this manner from the Tampa pharmacy. The prescriptions were for opioids including hydromorphone HCL, fentanyl citrate, and morphine sulfate. Two of the 23 patients for whom defendant wrote the prescriptions were already deceased at the time that defendant wrote a combined total of 33 separate controlled substance prescriptions for them.
Evidence obtained from Dr. Biddle’s trash suggest that the opioids he was fraudulently receiving, as well as marijuana, were being used unlawfully at his home.
The defendant made his initial appearance today before U.S. Magistrate Judge Jeremiah J. McCarthy and was released, with the express condition that he not practice medicine or be permitted to write prescriptions pending his next court appearance on November 27, 2017.
“The harm caused by drug addiction, particularly opioids knows no boundaries,” said U.S. Attorney Kennedy. “From LeRoy Avenue to LeBrun Drive and from Olcott to Orchard Park, lives across our region are being ruined, and even lost, every day as a result of opioid addiction. Sadly, it appears that Dr. Biddle used his medical license as a license both to steal his patient information and to divert drugs to himself. Today’s arrest reminds us that no one is immune from the deleterious impact of drug addiction.”
The complaint is the result of an investigation by Special Agents of the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division; the Federal Bureau of Investigation, Western New York Healthcare Fraud Task Force, under the direction of Special Agent-in-Charge Adam S. Cohen; the New York State Department of Financial Services, under the direction of Maria T. Vullo, Superintendent of Financial Services; Department of Health and Human Services, Office of Inspector General, Office of Investigations, under the direction of Special Agent-in-Charge Scott Lampert; and the Amherst Police Department, under the direction of Chief John Askey.
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.
Norwalk Man Sentenced to Five Years in Federal Prison for Using Internet to Entice Minor to Have SexRead the Press Release
LOS ANGELES – A Norwalk man has been sentenced to five years in federal prison for using the internet as part of his efforts to solicit a 15-year-old girl to have sex.
Mauricio Edgardo Estrada, 29, who at the time of the offense was a police officer with the Los Angeles Unified School District, was sentenced yesterday by United States District Judge Dale S. Fischer.
Estrada pleaded guilty in June to one count of using the internet to transmit information about a minor in connection with criminal sexual activities.
The case against Estrada was the result of an undercover operation by the Los Angeles Regional Human Trafficking Task Force, which includes representatives of U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI), the Los Angeles County Sheriff’s Department and the Department of State’s Diplomatic Security Service. The Task Force was conducting an anti-sex trafficking operation in Artesia and posted an advertisement on the Craigslist website that was designed to attract individuals interested in engaging in commercial sex acts with minors.
On April 20, 2016, Estrada responded to the advertisement via e-mail and subsequently engaged in a series of text messages with an undercover agent he thought was a 15-year-old girl, according to court documents. Estrada agreed to pay $150 to engage in sex with the “girl.” When he arrived at a gas station in Artesia for the encounter with the “girl,” Estrada had condoms and approximately $150 in his possession.
The case against Estrada was prosecuted by Assistant United States Attorney Lana Morton-Owens of the Violent and Organized Crime Section
Non-Indian Man from Santa Fe County Sentenced for Assault on Indian WomanRead the Press Release
ALBUQUERQUE – Manuel A. Caudillo, 29, a non-Indian man from Alcalde, N.M., was sentenced today in federal court in Albuquerque, N.M., to nine months in prison followed by one year of supervised release for his conviction on a battery on a household member charge.
Caudillo was charged in a criminal complaint filed on Feb. 4, 2016, with assault of an intimate partner by strangulation. According to the complaint, Caudillo assaulted the victim, a Pojoaque Pueblo woman, on Jan. 24, 2016, in the Pojoaque Pueblo within Santa Fe County, N.M., by strangling the victim with his hands to the point the victim lost consciousness, and by attempting to wrap a cord around the victim’s neck. The victim suffered bruising to her forehead, redness to her neck consistent with being strangled and bruising to her arms and knees.
Caudillo was subsequently charged in a four-count indictment on March 8, 2016, with three counts of assault of an intimate partner by strangulation or suffocating, and assault with a dangerous weapon with intent to do bodily harm. According to the indictment, Caudillo committed the crimes on Jan. 24, 2016, on the Pojoaque Pueblo in Santa Fe County.
On Aug. 18, 2017, Caudillo pled guilty to an information charging him with three counts of battery against a household member. In entering the guilty plea, Caudillo admitted that on Jan. 24, 2016, he got into a verbal and physical fight with the victim. During the fight, Caudillo grabbed the victim and pushed her onto a couch, and angrily grabbed and shoved her in a hallway. Police noticed injuries that Caudillo inflicted on the victim.
This case was investigated by the Northern Pueblos Agency of the BIA, Office of Justice Services. The case was prosecuted by Assistant U.S. Attorney Nicholas J. Marshall and Special Assistant U.S. Attorney Lucy B. Solimon pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico, which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
New Orleans Attorney Sentenced for His Role in Honest Services Fraud and Bribery Scheme at Orleans Parish Criminal District CourtRead the Press Release
Acting U. S. Attorney Duane A. Evans announced that JAMES JOHNSON, age 38 of New Orleans, was sentenced today by United States District Judge Ivan L.R. Lemelle after previously pleading guilty in the midst of trial for his role in operating a long-running and extensive bribery and honest services fraud scheme related to a series of bail bonds business located at 536-38 South Broad Street in New Orleans. JOHNSON previously pleaded guilty to misprision of a felony. Today, Judge Lemelle sentenced him to 5 years probation and ordered him to forfeit $25,000 and pay a fine of $25,000. Judge Lemelle also postponed ruling on whether JOHNSON must also pay restitution pending further proceedings.
According to the court documents, JOHNSON’S father, Rufus Johnson, who was previously sentenced to 74 months in prison, operated as an unlicensed bail bondsman for at least between 2003 and 2013, accepting money from customers in exchange for getting Orleans Parish Prison inmates released from jail, in violation of state law. To circumvent the prohibition against unlicensed individuals operating as bailbondsmen, Rufus Johnson opened bail bonds business under JOHNSON’S name and then used the licenses of JOHNSON and other employees and contracts of paid employee bail bondsmen and corruptly paid certain public employees in the Orleans Parish criminal justice system to release inmates on their own recognizance, to provide and alter information in protected computer systems, and to make false certifications on official bond documents. JOHNSON was aware that the business made cash payments to deputy clerks in the Clerk’s Office of the Orleans Parish Criminal District Court in order to obtain documents and information, including sensitive and official-use-only information, from protected computer systems servicing the criminal justice system. This information was valuable to bail bondsmen who were seeking to post bonds for inmates and to address bond forfeitures.
Additionally, JOHNSON was aware that Rufus Johnson paid bribes and kickbacks to a deputy clerk at Criminal District Court who worked as a deputy at CINTAP, an office located in the Orleans Parish Prison’s Central Lockup where one or two deputy sheriffs on shift received and processed telephone orders from judges and other appropriate elected officials to release pre-trial prison inmates on their own recognizance, or to reduce or otherwise alter inmates’ bail amounts or bail status.
After the scheme was unearthed in 2010, JOHNSON sought to obstruct the investigation by instructing other persons involved with the bail business that if law enforcement should ask what Rufus Johnson did there, they should lie and say that he was merely the janitor, or that his primary role at the office was cleaning up and sweeping, and that he did not sell, solicit, or negotiate bonds, and that he was not the primary operator of the bailbonds business. Several of these individuals subsequently repeated this lie to agents of the Federal Bureau of Investigation. JOHNSON also testified falsely before a federal grand jury about the nature of his father’s role at the bailbonds business.
Acting U.S. Attorney Evans praised the work of the Federal Bureau of Investigation, the New Orleans Police Department, and the Orleans Parish District Attorney’s Office, with the assistance of the Metropolitan Crime Commission. Assistant United States Attorneys Harry W. McSherry, Jordan Ginsberg, Brittany Reed, and Michael B. Redmann were in charge of the prosecution.
Milwaukee Woman Sentenced to Prison for False Tax Return Scheme and Identity TheftRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on November 6, 2017 Trulunda Stenson (age 35) of Milwaukee, Wisconsin was sentenced to 30 months in prison, followed by three years of supervised release. In addition, United States District Judge Pamela Pepper ordered restitution in an amount to be determined at a later date. On June 30, 2017, Stenson was convicted by a jury on each of the following 34 counts charged in the indictment: (1) ten counts of filing false tax refund claims, in violation of Title 18, United States Code, Section 287; (2) eleven counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and (3) eleven counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
As proven at trial, beginning in January 2011, Stenson pursued a scheme to file false income tax returns that claimed refund payments from the Internal Revenue Service (IRS). Stenson and others gathered individuals’ social security numbers and other personal information. Stenson then prepared federal income tax returns that fraudulently claimed wages and federal tax-withholding amounts from several employers, even though in many cases, those employers had not actually paid wages or withheld taxes for the individuals. Stenson submitted the returns electronically to the IRS, signing the returns for individuals, many of whom she had never met. Stenson filed over 80 fraudulent tax returns seeking more than $300,000 in tax refund payments. In addition, the jury also found Stenson guilty of filing fraudulent 2011 and 2012 income tax returns in her own name.
This case resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Matthew Jacobs and Matthew Krueger.
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For Additional Information Contact:
Public Information Officer Dean Puschnig (414) 297-1700
Michigan City Man SentencedRead the Press Release
SOUTH BEND - The United States Attorney for the Northern District of Indiana, Thomas L. Kirsch II, announced that Daniel Mallet, age 32, of Michigan City, Indiana, was sentenced before South Bend District Court Judge Jon E. DeGuilio for distributing heroin.
Mallet was sentenced to 120 months imprisonment followed by three years of supervised release.
According to documents in this case, on May 5, 2016, Mallet distributed heroin to an individual who was working with law enforcement.
This case was investigated by the Drug Enforcement Administration and handled by Assistant U.S. Attorney Frank E. Schafer.
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Miami-Area Man Pleads Guilty for Role in $63 Million Health Care Fraud SchemeRead the Press Release
A Miami-area, Florida man pleaded guilty today for his role in a $63 million health care fraud scheme involving a now-defunct community mental health center located in Miami that purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness.
Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge Robert Lasky of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office, made the announcement.
Samuel Konell, 70, of Boca Raton, Florida, pleaded guilty to one count of conspiracy to defraud the United States and to receive health care kickbacks before U.S. District Judge Jose E. Martinez of the Southern District of Florida. Sentencing has been scheduled for Jan. 30 before Judge Martinez. Konell was charged in an indictment unsealed on June 9.
As part of his guilty plea, Konell admitted that from approximately January 2006 through June 2012, he received kickbacks and/or bribes in return for referring Medicare beneficiaries from the Miami-Dade state court system to Greater Miami Behavioral Healthcare Center Inc. (Greater Miami) to serve as patients.
Specifically, Konell admitted that he coordinated with criminal defendants in the state court system to obtain court orders for mental health treatment in lieu of incarceration so that Konell could refer those individuals to Greater Miami to serve as patients in return for kickbacks and/or bribes. Konell further admitted that he did so knowing that certain of those individuals were not mentally ill or otherwise did not meet the criteria for PHP treatment.
In addition, Konell admitted that he and his co-conspirators at Greater Miami took steps to disguise the true nature of the kickbacks and/or bribes that Greater Miami paid to Konell and other patient brokers. Specifically, Konell was placed on the Greater Miami payroll to make the kickbacks and/or bribes appear as though they were legitimate salary payments, Konell admitted.
Konell further admitted that he was originally paid a flat monthly rate that was based on the number of patients he referred to Greater Miami from the state court system, and when Konell referred more patients to Greater Miami, his co-conspirators found ways to pay him over and above his regular kickback payments, including by providing him with holiday bonuses.
In furtherance of the kickback conspiracy, Konell made representations to judges and others in the Miami-Dade state court system that the individuals he referred to Greater Miami received medically necessary PHP services from Greater Miami when in reality such services were not always needed, he admitted.
According to plea documents, Konell’s co-conspirators caused the submission of over $63 million in false and fraudulent claims to Medicare. These claims were based on kickbacks and/or bribes paid to Konell and others and were for services that were medically unnecessary, were not eligible for Medicare reimbursement or were never provided by Greater Miami. Konell admitted that his participation in the Greater Miami scheme resulted in the submission of claims to Medicare totaling between at least approximately $9.5 and $25 million.
Eleven other individuals have pleaded guilty for their roles in the scheme, including the owner of Greater Miami, three administrators and seven patient brokers.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. Senior Trial Attorney Christopher J. Hunter and Trial Attorneys Elizabeth Young and Leslie Wright of the Fraud Section are prosecuting the case.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
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.
Miami-Area Man Pleads Guilty for Role in $63 Million Health Care Fraud SchemeRead the Press Release
A Miami-area, Florida man pleaded guilty today for his role in a $63 million health care fraud scheme involving a now-defunct community mental health center located in Miami that purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Special Agent in Charge Robert Lasky of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Samuel Konell, 70, of Boca Raton, Florida, pleaded guilty to one count of conspiracy to defraud the United States and to receive health care kickbacks before U.S. District Judge Jose E. Martinez of the Southern District of Florida. Sentencing has been scheduled for Jan. 30 before Judge Martinez. Konell was charged in an indictment unsealed on June 9.
As part of his guilty plea, Konell admitted that from approximately January 2006 through June 2012, he received kickbacks and/or bribes in return for referring Medicare beneficiaries from the Miami-Dade state court system to Greater Miami Behavioral Healthcare Center Inc. (Greater Miami) to serve as patients.
Specifically, Konell admitted that he coordinated with criminal defendants in the state court system to obtain court orders for mental health treatment in lieu of incarceration so that Konell could refer those individuals to Greater Miami to serve as patients in return for kickbacks and/or bribes. Konell further admitted that he did so knowing that certain of those individuals were not mentally ill or otherwise did not meet the criteria for PHP treatment.
In addition, Konell admitted that he and his co-conspirators at Greater Miami took steps to disguise the true nature of the kickbacks and/or bribes that Greater Miami paid to Konell and other patient brokers. Specifically, Konell was placed on the Greater Miami payroll to make the kickbacks and/or bribes appear as though they were legitimate salary payments, Konell admitted.
Konell further admitted that he was originally paid a flat monthly rate that was based on the number of patients he referred to Greater Miami from the state court system, and when Konell referred more patients to Greater Miami, his co-conspirators found ways to pay him over and above his regular kickback payments, including by providing him with holiday bonuses.
In furtherance of the kickback conspiracy, Konell made representations to judges and others in the Miami-Dade state court system that the individuals he referred to Greater Miami received medically necessary PHP services from Greater Miami when in reality such services were not always needed, he admitted.
According to plea documents, Konell’s co-conspirators caused the submission of over $63 million in false and fraudulent claims to Medicare. These claims were based on kickbacks and/or bribes paid to Konell and others and were for services that were medically unnecessary, were not eligible for Medicare reimbursement or were never provided by Greater Miami. Konell admitted that his participation in the Greater Miami scheme resulted in the submission of claims to Medicare totaling between at least approximately $9.5 and $25 million.
Eleven other individuals have pleaded guilty for their roles in the scheme, including the owner of Greater Miami, three administrators and seven patient brokers.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. Senior Trial Attorney Christopher J. Hunter and Trial Attorneys Elizabeth Young and Leslie Wright of the Fraud Section are prosecuting the case.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
Massachusetts Man Charged with Sex Trafficking and KidnappingRead the Press Release
An indictment was unsealed today in the U.S. District Court for the District of Maine charging Rashad Sabree, 37, of Boston, Massachusetts, with two counts of sex trafficking by force, fraud, or coercion, two counts of kidnapping, and one count of interstate transportation for purposes of prostitution, announced Acting Assistant Attorney General John M. Gore of the Justice Department’s Civil Rights Division and U.S. Attorney Halsey B. Frank of the District of Maine.
According to the indictment, in late 2015 and early 2016, the defendant used force, fraud, and coercion to cause two women to engage in commercial sex acts in Maine before attempting to drive them to Massachusetts against their will.
The District of Maine is one of six districts designated through a competitive, nationwide selection process as a Phase II Anti-Trafficking Coordination Team (ACTeam), through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
An indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a minimum sentence of 15 years’ imprisonment and a maximum sentence of life, a $250,000 fine, and mandatory restitution.
The case is being investigated by the Federal Bureau of Investigation, U.S Immigration and Customs Enforcement’s Homeland Security Investigations, and the Biddeford Police Department. It is being prosecuted by Assistant U.S. Attorney Julia Lipez and Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Mark A. Klaassen Sworn in as United States AttorneyRead the Press Release
CHEYENNE, WYOMING. –Mark A. Klaassen has taken the oath of office to become the United States Attorney for the District of Wyoming. Klaassen was nominated by President Donald Trump on July 21, 2017, and confirmed by the U.S. Senate on November 9, 2017. Federal District Court Judge Alan B. Johnson administered the oath of office.
Upon officially entering office, United States Attorney Mark A. Klaassen said, "It is an honor to be confirmed as the next United States Attorney for the District of Wyoming. I am pleased to continue working with a talented group of colleagues, as well as our federal, state, and local law enforcement partners. Wyoming is a special place to live and raise a family. As United States Attorney, I am committed to sustaining efforts necessary to protect our communities and uphold the rule of law.
We face many challenges in reducing violent crime in our neighborhoods, stemming the tide of illegal drugs and prescription opioid abuse affecting our communities, and protecting the most vulnerable in our society from exploitation. Together with our law enforcement partners, we will make a difference.
I appreciate the confidence placed in me by the President, as well as the support of Senators Enzi and Barrasso, and Congresswoman Cheney throughout the confirmation process. I look forward to serving the people of Wyoming."
As U.S. Attorney, Klaassen is the top-ranking federal law enforcement official in the District of Wyoming. He oversees a staff of 42 employees, including 17 attorneys and 25 non-attorney support personnel. The office is responsible for prosecuting federal crimes occurring in the district, including crimes related to public corruption, child exploitation, firearms, and narcotics. The office also defends the United States in civil cases and collects debts owed to the United States.
Prior to his nomination, Klaassen served for almost nine years as an Assistant United States Attorney for the District of Wyoming, where he worked on affirmative civil and financial litigation cases. During that time, he was also elected to the Board of Trustees for Laramie County School District Number One.
Before joining the United States Attorney’s Office, Klaassen was appointed by President George W. Bush to serve as Chief of Staff to the General Counsel for the Department of Homeland Security from 2007 to 2009. Prior to that appointment, Klaassen worked as General Counsel for the U.S. House Committee on Homeland Security from 2003 to 2007.
Klaassen began his career in Cheyenne as a law clerk for the Honorable Wade Brorby of the United States Court of Appeals for the Tenth Circuit, and later joined the law firm of Latham & Watkins LLP. He received his B.S. in Finance, summa cum laude, from Oral Roberts University and his J.D., magna cum laude, from Notre Dame Law School.
Klaassen has deep ties to Wyoming. He was raised in Gillette, where he attended public school and graduated in 1991. He and his wife Christy now reside in Cheyenne with their three children.
Marion County man admits to making methamphetamineRead the Press Release
CLARKSBURG, WEST VIRGINIA – A Fairmont, West Virginia man has admitted to his role in making methamphetamine, United States Attorney Bill Powell announced.
Jesse Nelson Yoho pled guilty to one count of “Possession of Pseudoephedrine to be Used in Manufacture of Methamphetamine.” Yoho admitted to possessing Pseudophedrine with the intent of making methamphetamine in Marion County in April 2015.
Yoho faces up to 20 years incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Andrew R. Cogar is prosecuting the case on behalf of the government. The Three Rivers Drug &Violent Crime Task Force investigated.
U.S. Magistrate Judge Michael John Aloi presided.Man Pleads Guilty to Child Pornography Charges and Failure to Register as a Sex OffenderRead the Press Release
BOSTON – A former Massachusetts man pleaded guilty yesterday in federal court in Boston to possessing and distributing child pornography and to failing to register as a sex offender. The offenses stem from two separate cases.
Scot Letourneau, 44, formerly of Quincy and Maine, pleaded guilty to one count of distribution of child pornography and one count of possession of child pornography; and in a separate case, he pleaded guilty to failure to register as a sex offender. U.S. District Court Judge Denise J. Casper scheduled sentencing for Feb. 27, 2018.
In early 2015, law enforcement officers learned that an individual was trading images of child pornography on Kik Messenger, an instant messaging application, with an individual in Connecticut. Further investigation linked the Kik Messenger account to Letourneau. On May 21, 2015, a search warrant was executed at Letourneau’s home, when a preliminary review of his cellphone revealed that he exchanged images of child pornography with others. Forensic analysis revealed that Letourneau had a collection of approximately 103 videos and more than 500 images of children engaged in sexually explicit conduct and acts.
After he was arrested and charged in May 2015, the government sought to detain Letourneau pending trial based on his prior convictions, including a 2004 conviction in Cheshire County Superior Court for distribution of child pornography. However, on Aug. 5, 2015, the court released Letourneau on an electronic bracelet and home confinement in Maine. On Nov. 3, 2015, Letourneau fled to New Mexico; he was apprehended in Denver in March 2017.
In addition, as a result of his 2004 conviction for distribution of child pornography in New Hampshire, Letourneau is required to register as a sex offender, which he failed to do while living in New Mexico as a fugitive under an alias.
Due to Letourneau’s previous child pornography conviction, the current charge of distribution of child pornography provides for a mandatory minimum sentence of 15 years and no greater than 40 years in prison; and the charge of possession of child pornography provides for a mandatory minimum of 10 years and no greater than 20 years in prison. Both charges provide for a mandatory minimum of five years and up to a lifetime of supervised release and a fine of $250,000. The charge of failure to register as a sex offender provides for no greater than 10 years in prison, a mandatory minimum of five years and up to a lifetime of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb, U.S. Marshal John Gibbons for the District of Massachusetts and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. Assistance was also provided by the U.S. Marshals Service for the District of Colorado; the Adams County (Colo.) Sheriff’s Department; Connecticut State Police; Quincy Police Department; and U.S. Coast Guard. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Weinreb’s Major Crimes Unit is prosecuting the case.
The case was brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Man Pays Price for Trafficking Box Turtles to Corpus ChristiRead the Press Release
CORPUS CHRISTI, Texas - A 34-year-old Louisiana man has been convicted and fined for violating the Lacey Act, announced Acting U.S. Attorney Abe Martinez along with Acting Assistant Director Edward Grace of the U.S. Fish and Wildlife Service (FWS).
Byron Paul Pitre pleaded guilty before Senior U.S. District Judge John D. Rainey today. The court then ordered him to serve three years of probation and pay a $2,500 fine. “Our wildlife and environment are a precious natural resource that we need to protect,” said Judge Rainey.
"One of the primary objectives of the FWS - Office of Law Enforcement is to combat the illegal trafficking of wildlife,” said Grace. “The special agents and federal prosecutors work hard to bring defendants to justice, and hopefully this case provides a deterrence to others that want to profit from the illegal sales of protected wildlife.”
The Lacey Act prohibits people from importing, exporting, transporting, selling, receiving, acquiring or purchasing any fish or wildlife or plant taken, possessed, transported or sold in violation of any law, treaty or regulation of the United States or in violation of any tribal law.
During the hearing today, the court heard that in February 2017, Pitre sold and shipped three wild Louisiana box turtles (Terrapene Carolina) to an undercover agent in Corpus Christi. The sale and transportation of wild box turtles from Louisiana to Texas is illegal under Louisiana state law.
In May 2017, agents executed a search warrant at Pitre’s residence in Louisiana. At that time, he admitted to obtaining turtles that were unlawfully caught in the wild and selling them to individuals in Texas, Nevada and New Jersey. Agents also seized more than 230 box turtles, 119 map turtles, 45 leopard tortoises, 20 Sulcata tortoises and 88 tortoise eggs.
The FWS conducted the investigation. Assistant U.S. Attorney Hugo R. Martinez prosecuted the case.
Man Convicted for Using Stolen Identities to Attempt to Defraud Various Financial Institutions of More Than $1.7 Million DollarsRead the Press Release
Memphis, TN – After a six-day jury trial in the U.S. District Court, a Memphis man has been found guilty as charged of using stolen identities to defraud over 100 individual victims and various financial institutions of more than $1.7 million dollars. In addition, he was found guilty on two counts of tampering with government witnesses. D. Michael Dunavant, U.S. Attorney for the Western District of Tennessee, announced the convictions today.
According to the indictment, Jeremy Jones, 39, of Memphis, executed a scheme to steal the identities of personal acquaintances, car dealers and over 145 Memphis Neurology patients throughout 2011, 2012 and 2015. Jones used this identifying information to apply for loans and credit cards and open bank accounts in the individuals’ names without their knowledge. A co-conspirator, who was employed at Memphis Neurology, removed patient information from the company’s database and provided it to Jones upon his request. Jones agreed to compensate the co-conspirator for providing him with this information.
Jones sent and received loan applications, checks and other financial information from numerous lenders throughout the United States via the internet and mail carriers. The potential loss is $1.7 million.
On February 16, 2016, Jones was originally indicted on individual counts of conspiracy to commit identity theft and mail fraud, and separate counts of identity theft, mail fraud, and aggravated identity theft. On October 3, 2017, a superseding indictment added two additional counts of obstruction of justice for tampering with two government witnesses.
The sentencing hearing is set for March 8, 2018. The maximum prison sentence for conspiracy is 5 years; the maximum prison sentence for identity theft is 5 years; and the maximum prison sentence for mail fraud is 20 years. The maximum prison sentence for aggravated identity theft is a mandatory penalty of 2 years imprisonment consecutive to any other sentence imposed. For the obstruction of justice charge, the maximum sentence is 20 years.
"Identity theft and financial fraud of this magnitude and scale by the defendant has victimized hundreds of people by compromising their personal and private information for his own selfish and unjust enrichment, and I am pleased that we have been able to hold the defendant accountable and achieve justice for the victims. I want to commend the good investigative work done in this case by the U.S. Postal Inspection Service and U.S. Secret Service, and I want to recognize the outstanding prosecutorial efforts of Assistant U.S. Attorneys Damon K. Griffin and Murre Martindale in presenting this complex case to the jury on behalf of the government," said U.S. Attorney D. Michael Dunavant.
MS-13 Leader Convicted by Federal Jury of RICO ConspiracyRead the Press Release
BOSTON – A federal jury has convicted an MS-13 gang leader of racketeering conspiracy, following a two week trial in Boston.
Rafael Leoner Aguirre, a/k/a “Tremendo,” 22, a Salvadoran national, was found guilty of conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy. U.S. District Court Judge F. Dennis Saylor IV scheduled sentencing for March 2, 2018.
Leoner Aguirre was the leader of the Enfermos Criminal Salvatrucha clique (“Enfermos clique”) of La Mara Salvatrucha, or MS-13. The Enfermos clique was one of many MS-13 cliques operating in Massachusetts from 2013 to 2016.
MS-13 is a violent, transnational criminal organization whose members engage in racketeering activity involving murder, robbery and drug trafficking. Multiple witnesses testified during trial that MS-13’s core principles include a desire to control territory by killing rival gang members, and a desire to kill those who are suspected of cooperating with law enforcement. Prospective members of MS-13 are required to complete an initiation process—to move from “paro,” to “observation,” to “chequeo,” to “homeboy.” Further, MS-13 often recruits younger members in local high schools.
In 2013 and early 2014, there were several “paros” and “chequeos” in Chelsea, Mass., who were associated with MS-13, but who lacked homeboy leadership. These MS-13 members included Hector Ramires, a/k/a “Cuervo;” Bryan Galicia Barillas, a/k/a “Chucky;” David Lopez, a/k/a “Cilindro,” a/k/a “Villano;” Daniel Menjivar, a/k/a “Roca,” a/k/a “Sitiko;” Angel Pineda, a/k/a “Bravo;” and Kevin Ayala, a/k/a “Gallito.”
In 2013, Leoner Aguirre entered the United States illegally from El Salvador, and in March 2014 he moved to the Chelsea area to provide leadership and to activate, organize, and supervise the group.
Even before arriving in Chelsea, Leoner Aguirre began recruiting and planning MS-13 activities. Among other things, Leoner Aguirre created recruitment videos for MS-13 and posted them on YouTube. This enabled younger members to view these videos, including one witness who testified that he first saw these videos while at a local high school.
Once Leoner Aguirre arrived in Massachusetts, he encouraged members of the clique to attack and kill rival gang members, in addition to committing other racketeering acts such as robberies. Leoner Aguirre himself committed a number of racketeering acts, including an attempted murder involving a shooting and another attempted murder involving a machete. More junior members of the Enfermos clique also committed a number of racketeering acts after Leoner Aguirre arrived in Massachusetts, including a shooting that resulted in the death of an innocent bystander.
The other members of the Enfermos clique—Ramires, Galicia Barillas, Lopez, Menjivar, Pineda and Ayala—were also arrested and charged with RICO conspiracy and previously pleaded guilty. Ramires pleaded guilty pursuant to a plea agreement under which the parties will recommend 27 years in prison. Galicia Barillas pleaded guilty pursuant to a plea agreement under which the parties will recommend 22 years in prison. Lopez and Menjivar pleaded guilty pursuant to plea agreements in which there is no agreement on sentencing. Pineda was previously sentenced to 93 months in prison and Ayala was sentenced to 42 months in prison. The defendants are also subject to deportation upon the completion of their sentences.
Leoner Aguirre faces up to 20 years in prison, three years of supervised release, and will be subject to deportation upon the completion of his sentence. 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Commissioner Thomas Turco of the Massachusetts Department of Corrections; Essex County Sheriff Kevin F. Coppinger; Suffolk County Sheriff Steven W. Thompkins; Suffolk County District Attorney Daniel F. Conley; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Evans; Chelsea Police Chief Brian A. Kyes; Everett Police Chief Steven A. Mazzie; Lynn Police Chief Michael Mageary; Revere Police Chief James Guido; Somerville Police Chief David Fallon; and Herndon (VA) Police Chief Maggie A. DeBoard made the announcement.
Lynchburg Man Sentenced on Federal Securities Fraud ChargeRead the Press Release
Lynchburg, VIRGINIA – A Lynchburg man convicted of securities fraud was sentenced last week in the United States District Court for the Western District of Virginia in Lynchburg, United States Attorney Rick A. Mountcastle announced.
Robert Scott Mattingley, 54, was sentenced last week to 50 months in federal prison and three years of supervised release after the Court heard evidence that he defrauded more than 80 victims out of $847,000 in connection with a commercial loan fraud scheme. Mattingley previously pleaded guilty in this case to one count of securities fraud.
According to evidence presented at previous hearings by Special Assistant United States Attorney Kari Munro, between 2008 and 2012, Mattingley owned and operated Virginia Commercial Capital Corporation, based in Lynchburg. Through this company, Mattingley held himself out as a commercial broker who could obtain favorable rates on loans for commercial projects provided his customers could make one or, in some cases, several, cash deposits toward their loans.
Mattingely failed to obtain commercial loans on behalf of his customers as agreed and kept their deposits, using them for personal expenses. In all, he obtained more than $845,000 from as many as 80 individuals located throughout the United States.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Virginia State Police. Special Assistant United States Attorney Kari Munro and Department of Justice, Tax Division Trial Attorney Sean Beaty prosecuted the case for the United States.
Local Man Heads to Prison on Multiple Drug and Firearms ChargesRead the Press Release
CORPUS CHRISTI, Texas – A 45-year-old Kingsville man has been ordered to prison following his convictions of trafficking more than a kilogram of cocaine as well as being a felon in possession of both a firearm and ammunition, announced Acting U.S. Attorney Abe Martinez. A federal jury convicted Elias Gonzalez Alvarez Aug. 10, 2017, following a one-day trial and approximately 40 minutes of deliberations.
Today, Senior U.S. District Judge John D. Rainey, who presided over the trial, handed Alvarez a 120-month sentence for his drug trafficking conviction and 108 months each for the felon in possession of a firearm and felon in possession of ammunition convictions. All of the sentences are to be served concurrently and followed by eight years of supervised release.
Authorities had learned that Alvarez had been engaged in trafficking cocaine and, on May 12, 2015, conducted surveillance on his apartment in Corpus Christi. Authorities stopped him for a traffic violation as he left his residence. His license was found to be suspended and Alavarez was arrested. At that time, authorities conducted a search of his vehicle and discovered a box with a bag inside that contained 1.01 kilograms of cocaine.
A search warrant was also executed on his residence where authorities found a .38 caliber handgun and ammunition. Alvarez is a previously convicted felon who is prohibited from possessing firearms or ammunition per federal law.
At trial, the jury also heard that Alvarez is a member of the Calaveras Outlaw motorcycle gang. Today, the court prohibited any further membership with any gang as a condition of his supervised release.
Alavarez had attempted to convince the jury the drugs found in his vehicle and the gun and ammunition discovered in his apartment did not belong to him. They did not believe his claims and found him guilty as charged.
Alvarez was taken into custody following the return of the verdicts in August where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; Texas Department of Public Safety; and the Corpus Christi Police Department conducted the investigation.
Justice Department Awards $98 Million to Hire Community Policing OfficersRead the Press Release
Attorney General Jeff Sessions yesterday announced $98,495,397 in grant funding through the Department of Justice’s Office of Community Oriented Policing Services (COPS Office) COPS Hiring Program (CHP). The Attorney General announced funding awards to 179 law enforcement agencies across the nation, which allows those agencies to hire 802 additional full-time law enforcement officers.
“Cities and states that cooperate with federal law enforcement make all of us safer by helping remove dangerous criminals from our communities,” said Attorney General Jeff Sessions. “Today, the Justice Department announced that 80 percent of this year’s COPS Hiring Program grantees have agreed to cooperate with federal immigration authorities in their detention facilities. I applaud their commitment to the rule of law and to ending violent crime, including violent crime stemming from illegal immigration. I continue to encourage every jurisdiction in America to collaborate with federal law enforcement and help us make this country safer.”
CHP provides grant funding directly to state, local, and tribal law enforcement agencies to support hiring additional law enforcement officers for three years to address specific crime problems through community policing strategies.
In September, the Justice Department announced additional priority consideration criteria for FY2017 COPS Office grants. Applicants were notified that their application would receive additional points in the application scoring process by certifying their willingness to cooperate with federal immigration authorities within their detention facilities. Cooperation may include providing access to detention facilities for an interview of aliens in the jurisdiction’s custody and providing advance notice of an alien’s release from custody upon request. 143 of the 179 (80%) awarded agencies received additional points based on their certifications of willingness to cooperate with federal immigration authorities.
The complete list of award recipients can be found here.
U.S. Attorney Kirsch said, “We are pleased that the Northern Indiana Police Departments of Fort Wayne and Lafayette received funding to hire more officers. We have always and will continue to focus on cooperation between federal, state and local law enforcement in our fight against crime.”
The COPS Office awards grants to hire community policing officers, develop and test innovative policing strategies, and provide training and technical assistance to community members, local government leaders, and all levels of law enforcement. Since 1994, the COPS Office has invested more than $14 billion to help advance community policing.
Judge Sentences Pittsburgh Felon to Federal Prison for Possessing Firearm and AmmunitionRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania has been sentenced in federal court to 65 months’ imprisonment, followed by three years of supervised release on his conviction of violation federal firearms laws, Acting United States Attorney Soo C. Song announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on Andrew Jones, 40.
Jones had previously been convicted by a federal jury of the crime of possessing a firearm and ammunition as a convicted felon. In addition, information was presented to the court that the firearm had been reported stolen prior to the time that Mr. Jones possessed it. Federal law prohibits a person convicted of a crime punishable by in excess of one year imprisonment from possessing a firearm or ammunition.
Assistant United States Attorneys Rachael Dizard and Katherine A. King prosecuted this case on behalf of the government.
Acting United States Attorney Song commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Jones.
James Douglas Overbey Sworn in as U.S. Attorney for the Eastern District of TennesseeRead the Press Release
KNOXVILLE, Tenn. – On Tuesday, November 21, 2017, James Douglas Overbey was administered the oath of office to become U.S. Attorney for the Eastern District of Tennessee, by the Honorable Thomas A Varlan, Chief United States District Judge. Overbey was nominated by President Donald J. Trump and confirmed by the United States Senate to serve in this position.
“I am deeply appreciative to Senators Alexander and Corker for recommending me to the President and to President Trump for nominating me to the office. I look forward to continuing to serve the people of Tennessee in this position and working with the dedicated people in the U.S. Attorney’s Office,” said U.S. Attorney Overbey.
As U.S. Attorney, Overbey is the top-ranking federal law enforcement official in the Eastern District of Tennessee, which is the largest federal district in Tennessee, with a population of over 2.6 million, encompassing 41 of the 95 counties, and spanning 420 miles. He oversees a staff of attorneys and non-attorney support personnel in the Knoxville headquarters office, as well as two branch offices in Chattanooga and Greeneville.
The U.S. Attorney’s office is responsible for prosecuting federal crimes in the district, including crimes related to terrorism, public corruption, child exploitation, firearms, and narcotics. The office also defends the United States in civil cases and collects debts owed to the United States.
Overbey, a resident of Maryville, Tennessee, received his undergraduate degree from Carson- Newman College, graduated first in his class from the University of Tennessee, College of Law and has practiced law for 38 years. In 1982, he co-founded the law firm of Robertson Overbey where he was the senior partner.
Prior to his appointment as U.S. Attorney, Overbey was serving his third term in the Tennessee State Senate representing Blount and Sevier counties. From 2000 to 2008, he represented a portion of Blount County in the House of Representatives. He served on the Finance and Health Committees in both the House and Senate, was Chairman of the Senate Ethics Committee and the General Assembly’s Arts Caucus, and Vice-Chairman of the Senate Finance and Judiciary Committees.
His many awards include the 2009 Law & Liberty Award from the Knoxville Bar Association for his contribution to the advancement and protection of law through liberty, the 2011 Community Leadership Award from Leadership Blount for more than three decades of community service, and the 2011 Bud Cramer Award from the National Children’s Alliance for his steadfast advocacy of children’s issues. In 2013, he was selected as a member of the CSG Toll Fellows Class and received the Distinguished Alumnus Award from his alma mater, Carson-Newman University.
Overbey has also been a frequent lecturer for continuing legal education programs, including 16 years presenting the Knoxville Bar Association’s annual Legislative Update, served as an adjunct faculty member at the University of Tennessee College of Law, and had two articles published in the Anglican Digest.
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Jacksonville Man Arrested and Indicted for Distributing Child Sex Abuse VideosRead the Press Release
Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announced today that Pryce Elijah Demars (24, Jacksonville) has been arrested and indicted by a federal grand jury for distribution of child pornography. He faces a mandatory minimum penalty of 5 years, up to 20 years, in federal prison and a potential lifetime of supervision. Demars has been detained pending his trial on January 2, 2018.
According to court documents, on November 15, 2017, FBI agents and local police officers executed a federal search warrant at Demars’s Jacksonville residence, in connection with a child exploitation investigation into online users of a particular file-sharing program. FBI agents determined that from August 3, 2016, through April 12, 2017, Demars had distributed videos depicting young children being sexually abused to other individuals using a computer over the Internet. During an interview, Demars admitted that he had searched for child pornography on the Internet, downloaded it, and distributed it to another individual in exchange for video games and other items of value.
This case was investigated by the Federal Bureau of Investigation, the Jacksonville Sheriff’s Office, and the Nassau County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Illinois Man Sentenced to 61 MonthsRead the Press Release
HAMMOND – The United States Attorney for the Northern District of Indiana, Thomas L. Kirsch II, announced that Gary Smith, 28, of Robbins, Illinois, was sentenced by District Court Judge Joseph Van Bokkelen for using counterfeit access devices, illegal possession of device making equipment and aggravated identity theft.
Smith was sentenced to 61 mos imprisonment and 2 years supervised release to be served consecutively to the sentence he is currently serving in Illinois. Smith was also ordered to pay restitution in the amount of $7,346.
According to Court filings, beginning in August 2014 Smith knowingly and with the intent to defraud used counterfeit access devices, stolen credit card numbers issued to other persons. He used these numbers without lawful authority in relation to a felony crime of wire fraud. Smith also possessed device-making equipment.
This case was investigated by the United States Secret Service. This case was handled by Assistant United State Attorney Philip C. Benson.
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Illegal immigrant charged with kidnapping minor and bringing her to Georgia for sexRead the Press Release
ATLANTA - Andres Castaneda-Guzman has been arraigned on charges for taking a 14-year-old girl against her will from Texas to Stockbridge, Georgia, and allegedly engaging in unlawful sexual activity. Castaneda-Guzman, who is in the United States illegally, lived in Jonesboro, Georgia, until August 2017, when he moved to Terrell, Texas. He was indicted on November 14, 2017.
“This kidnapping and sexual assault of a minor is stunning,” said U. S. Attorney Byung J. “BJay” Pak. “Prosecuting violent crime, including child exploitation, is an important priority for the Department of Justice. We are fully engaged in combatting child exploitation and will prosecute anyone who believes they can pursues this vile practice.”
“Child exploitation in any form is dreadful, but the kidnapping a child for sexual purposes is an atrocity of the worst kind,” said ICE HSI Atlanta Acting Special Agent in Charge Gregory Wiest. “HSI will continue to prioritize child exploitation investigations and utilize all that we bear to bring those accused to justice”
According to U.S. Attorney Pak, the indictment, and other information presented in court: On the evening of September 3, 2017, in Terrell, Castaneda-Guzman allegedly persuaded the minor female to get into his vehicle. He then drove her Georgia, where he eventually took her to a hotel in Stockbridge and allegedly forced her to have sexual intercourse with him. The girl was recovered after Castaneda-Guzman’s former in-laws in Jonesboro notified him that Clayton County law enforcement officers were seeking her return.
The indictment alleges that Andres Castaneda-Guzman, 24, formerly of Jonesboro, Georgia, now of Terrell, Texas, kidnapped a minor and transported a minor across state lines for the purpose of engaging in unlawful sexual activity.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Department of Homeland Security, Homeland Security Investigations.
Assistant U.S. Attorney William Traynor is prosecuting the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Idaho Falls Man Sentenced to Seven Years for Accessing with Intent to View Child PornographyRead the Press Release
POCATELLO – Thomas Wayne Anderson, 57, of Idaho Falls, Idaho, was sentenced yesterday in United States District Court to 84 months in federal prison, to be followed by eight years of supervised release, for accessing with intent to view child pornography, U.S. Attorney Bart M. Davis announced. Chief U.S. District Judge B. Lynn Winmill also ordered Anderson to pay $1,340.75 in restitution and to forfeit the laptop computer Anderson used to commit his crime. Anderson pleaded guilty to the charge on August 24, 2017.
According to the plea agreement, Anderson had been apprehended in connection with a series of acts of vandalism at recreational sites managed by the Bureau of Land Management when authorities obtained a search warrant and searched Anderson’s laptop computer. Law enforcement found screen captures of child pornography that appeared to be from videos depicting child pornography. When interviewed, Anderson admitted to using online video-conferencing services to view child pornography with other individuals.
The case was investigated by the Idaho Internet Crimes Against Children (ICAC) Task Force and the Bureau of Land Management.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Houston Man Sentenced in $6.4 Million Diamond Investment Fraud SchemeRead the Press Release
DALLAS — Christopher Arnold Jiongo, 57, of Houston, Texas, appeared this morning before U.S. District Judge Sidney A. Fitzwater and was sentenced to 46 months in federal prison and ordered to pay $3,786,595 in restitution for his role in a diamond investment scheme, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Jiongo pleaded guilty in May 2017 to one count of wire fraud. Judge Fitzwater ordered Jiongo to report to the Bureau of Prisons on January 9, 2018.
Co-defendants Craig Allen Otteson, 65, and Jay Bruce Heimburger, 59, were previously sentenced by Judge Fitzwater to 121 months and 97 months, respectively, in federal prison. Jiongo received a reduction to his sentence due to his early guilty plea and cooperation with the government’s investigation, as well as his testimony at Heimburger’s recent sentencing hearing.
According to the plea agreement factual resume filed in the case, Otteson acted as the Managing Member and Chief Compliance Officer of Stonebridge Advisors, LLC, located in Dallas. Stonebridge Advisors was involved as the Managing Partner of Worldwide Diamond Ventures, L.P., also located in Dallas, and it acted as the General Partner of Worldwide Diamond. Heimburger acted as a Principal Partner of Worldwide Diamond, and he was also listed as the registered agent and Director of JBH Securities, Inc. located in Dallas. JBH Securities was primarily involved in the business of providing investment advice. Worldwide Diamond was primarily involved in the business of buying and reselling diamonds on the international market. On October 1, 2013, Worldwide Diamond filed for bankruptcy in the Northern District of Texas.
The indictment charged that Jiongo drafted $50,000 diamond notes which Jiongo, Otteson and Heimburger later used as investment vehicles to generate investment funds. As part of their original business plan, Jiongo, Otteson and Heimburger represented to American Safe Retirements (ASR) that all investment funds would be used to buy and resell diamonds and that every dollar invested would always be fully secured by the cash and diamond inventory of Worldwide Diamond. Jiongo, Otteson and Heimburger all understood that ASR would instruct ASR sales agents to represent to investors that every dollar invested through the diamond notes would always be fully secured by the cash and diamond inventory of Worldwide Diamond.
The indictment also alleged that sometime in the summer of 2011, Jiongo, Otteson and Heimburger all realized that their original business plan was not working out as planned and that the defendants therefore could not honor the original promises and representations made to investors. Rather than inform ASR and the investors of the changed circumstances caused by their failed business plan, Jiongo, Otteson and Heimburger chose to deceive ASR when they failed to inform ASR that 100% of all investment funds would not be secured by cash and/or the diamond inventory of Worldwide Diamond. By deceiving ASR, Jiongo, Otteson and Heimburger knew that they were also causing the investors to be deceived about the use of investor funds.
The indictment alleged that during the period from 2011 through 2013, Otteson, Heimburger, and Jiongo caused over $6.4 million to be fraudulently collected from 77 Worldwide Diamond investors.
This case is one of many felony indictments of bankruptcy-related crimes prosecuted as part of the Bankruptcy Fraud Initiative (BFI), United States Attorney’s Office, Northern District of Texas. These prosecutions were the result of criminal referrals made by the United States Trustee’s Office in Dallas, Texas. Since 2013, as a result of the BFI, 23 defendants have been convicted and 2 defendants are pending trial.
The U.S. Postal Inspection Service investigated the case. Assistant U.S. Attorney David Jarvis prosecuted.
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Honduran Man Ordered to Prison for Assaulting Federal OfficerRead the Press Release
BROWNSVILLE, Texas – A 35-year-old illegal alien from Honduras has been sentenced to federal prison for assaulting a U.S. Border Patrol (BP) agent, announced Acting U.S. Attorney Abe Martinez. A federal jury returned a guilty verdict Aug. 17, 2017, against Hernan Cortez-Mazariegos following a one-day trial and approximately two hours of deliberations.
Today, U.S. District Judge Andrew S. Hanen handed Cortez-Mazariegos an 18-month sentence. Not a U.S. citizen, Cortez-Mazariegos is expected to face deportation proceedings following his release from prison.
On Nov. 15, 2016, BP agents responded to illegal alien traffic south of the border fence near Azucena street in Brownsville. A BP agent attempted to apprehend Cortez-Mazariegos, but he fled. The agent followed and attempted to arrest him, at which time Cortez-Mazariegos struck him on the side of his face, sustaining minor injury. Cortez-Mazariegos was eventually subdued and apprehended with the assistance of another BP agent.
Cortez-Mazariegos will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI and U.S. Customs and Border Protection conducted the investigation. Assistant U.S. Attorneys David Coronado and Jody Young prosecuted the case.
Honduran Man Found in Jackson, Tennessee, Indicted for Illegal Reentry and Being an Alien in Possession of 16 FirearmsRead the Press Release
Jackson, TN – On November 20, 2017, a federal grand jury charged a Honduran man found in possession of multiple firearms in Jackson, Tennessee, in a 33-count indictment. D. Michael Dunavant,U.S. Attorney for the Western District of Tennessee, announced the indictment today.
According to the indictment, on November 9, 2017, Melvin Melendez-Garcia, a/k/a/ "Joker," a/k/a Melvin Melendez, a/k/a Melvin Arteaga-Rivas, 32, reentered the United States after being deported and removed from the United States on multiple prior occasions, and did not have consent of the Attorney General or the Secretary of Homeland Security to reapply for admission into the country.
Melendez is also charged with 16 counts of being an alien in possession of several firearms, including shotguns, pistols, revolvers, and semi-automatic high capacity rifles. Melendez faces 16 additional counts of being an unlawful user of a controlled substance in possession of the same firearms.
If convicted, the defendant will face up to 10 years in federal prison for illegal reentry. Melendez will also face up to 10 years in federal prison for each of the individual firearm counts.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; Homeland Security Investigations; Madison County Sherriff’s Office and Jackson Police Department Metro Narcotics Unit; and the U.S. Attorney’s Office.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Assistant U.S. Attorney Taylor Eskridge is prosecuting this case on the government’s behalf.
Homestead Felon Sentenced to Prison for Illegally Possessing PistolRead the Press Release
PITTSBURGH - A resident of Homestead, Pennsylvania, has been sentenced in federal court to 21 months in prison on his conviction of federal firearm offenses, Acting United States Attorney Soo C. Song announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence yesterday on Michael Horvwalt, 31, of Homestead, Pennsylvania.
According to information presented to the court, on November 26, 2016, the defendant was stopped by a Munhall Police Officer who found a loaded 40 caliber pistol under the driver seat of the vehicle which was registered to the defendant. On December 1, 2016, the defendant confessed to Special Agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), that he possessed the firearm.
On December 4, 2016, the defendant was seen on surveillance video where approximately 45 gun shots were exchanged between multiple people. Surveillance video was reviewed and revealed that there was a white male, who resembled the defendant, exiting the driver seat of a vehicle that was registered to the defendant. The individual in the surveillance footage was seen firing shots from a firearm in his possession. The vehicle in the incident was the same vehicle in which the defendant was driving on November 26, 2016, when he was stopped by Munhall Police.
On December 5, 2016, police executed a search warrant at the defendant’s house looking for the firearm seen in the surveillance video. The police did not locate the firearm in the home, however they found a 30-30 caliber hunting rifle under his bed and approximately five other firearms in the home he shares with his mother. The Pennsylvania Game Commission provided information confirming that the defendant purchased a hunting license in 2009, despite his felony convictions in 2006, 2008 and later in 2015.
Prior to imposing sentence, Judge Conti stated that 21 months in jail, followed by 24 months of supervision by the United States Probation Office was sufficient but not greater than necessary, given the circumstances of this case and the prior record of Horvwalt.
Assistant United States Attorney Ross E. Lenhardt of the Violent Crimes Section prosecuted this case on behalf of the government.
Acting United States Attorney Song commended the Munhall Police Department and the ATF for the investigation leading to the successful prosecution of Horvwalt.
Grand Jury Indicts Mass. Man on Child Pornography ChargesRead the Press Release
PROVIDENCE, RI – A federal grand jury in Providence returned a three-count indictment today charging a Boston area man with travelling to Rhode Island in October 2017 for the purpose of transporting and distributing child pornography.
It is alleged in court documents that Fetahe Makonnen, 34, of Malden, Mass., travelled from Massachusetts to Rhode Island on October 28, 2017, and brought with him digital storage devices containing hundreds of videos and images of child pornography, which he provided to an undercover Rhode Island State Police detective.
Acting United States Attorney Stephen G. Dambruch; Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police; and Michael S. Shea, Acting Special Agent in Charge of Homeland Security Investigations for New England announce the indictment which charges Makonnen with transportation, possession and distribution of child pornography.
According to court documents, it is alleged that in July 2017, Makonnen began engaging in online communications about sharing child pornography with a member of the Rhode Island State Police Internet Crimes Against Children (ICAC) Task Force. Makonnen resumed communicating with the detective on September 16, 2017, with discussions centered around his interests in viewing child pornography involving prepubescent minors between 1 year and 13 years of age.
On October 27, 2017, it is alleged that Makonnen agreed to travel to Rhode Island the next day to meet with the person he had been communicating with and to view child pornography. He agreed to bring with him images and videos of child pornography. When they met, it is alleged that Makonnen provided an undercover ICAC Task Force detective with two thumb drives, which the detective opened on his laptop computer. It is alleged both thumb drives contained images and videos depicting child pornography involving prepubescent children.
Makonnen was arrested on a Rhode Island state charge and ordered held on $10,000 surety bail. A federal criminal complaint was filed in this matter on November 9, 2017, and Makonnen was ordered detained in federal custody.
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.
Transportation and distribution of child pornography are punishable by statutory penalties of a 5-20 years imprisonment and up to lifetime supervised release. Possession of child pornography is punishable by up to 10 years imprisonment and lifetime supervised release.
The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.
The matter was investigated by the Rhode Island State Police ICAC Task Force, including law enforcement personnel from Homeland Security Investigations. The 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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Four Charged with Drug Conspiracy and Distribution of Methamphetamines and HeroinRead the Press Release
GREENVILLE – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Greenville has returned indictments charging BRIAN ALLEN GARDNER, age 39, of Wilson, SEAN JASON HARSTINE, age 31, of Lucama, CRYSTAL MARIE PATE, age 32, of Bailey, JAMES MADISON PARKER, age 27, of Wilson, with conspiracy to distribute methamphetamines and heroin.
If convicted of conspiracy to distribute methamphetamines and heroin, the defendants would face not more than 40 years imprisonment, $5,000,000 fine and a term of 4 years supervised release following any term of imprisonment and not more than 20 years imprisonment and a term of 3 years of supervised release for the substantive distribution charges.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by the Wilson County Sheriff’s Office.
Four Aliens Indicted on Illegal Reentry ChargesRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Raleigh has returned indictments charging BRIAN BONILLA-RODRIGUEZ, age 21, of Honduras, VICTOR CAMACHO-LOPEZ, age 29, of Mexico, CARLOS HUMBERTO MIRANDA-ESCOBAR, age 36, of El Salvador, and GERARDO QUINTANAR-DE LA CRUZ, age 51, of Mexico, with Illegal Reentry of a Deported Alien.
If convicted of Illegal Reentry of a Deported Alien, BONILLA-RODRIGUEZ, found in Sampson County, CAMACHO-LOPEZ, found in Wake County, would face maximum penalties of two years’ imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
MIRANDA-ESCOBAR, found in Wake County, is alleged to have been previously deported subsequent to a felony conviction (illegal reentry of a removed alien). Therefore, if convicted, he would face a maximum imprisonment term of 10 years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
QUINTANAR-DE LA CRUZ, found in Wake County, is alleged to have been previously deported subsequent to an aggravated felony conviction (sale of cocaine). Therefore, if convicted, he would face a maximum imprisonment term of 20 years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictments are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.
The cases are being investigated by ICE’s Enforcement and Removal Operations.
Fort Wayne Man Sentenced to 324 MonthsRead the Press Release
FORT WAYNE – United States Attorney for the Northern District of Indiana, Thomas L. Kirsch, II, announces that, Eduardo Martinez, age 32 of Fort Wayne, IN was sentenced, before United States District Court Chief Judge Theresa Springmann after pleading guilty to possessing with intent to distribute more than a kilogram of heroin, distributing more than 50 grams of methamphetamine, and possessing a firearm as an illegal alien.
Martinez was sentenced to a total of 324 months of imprisonment and was ordered to serve a total of 5 years of supervised release.
According to documents in this case, Martinez distributed methamphetamine, cocaine, and marijuana from July of 2013 through December of 2014. The investigation utilized wiretaps of Martinez's telephones, and the wiretaps revealed that in November and December of 2014, Martinez coordinated an incoming shipment of multiple kilograms of heroin. The investigation concluded with the seizure of the entire heroin shipment, not all of which was delivered to Martinez, and the arrests of Martinez and six other co-defendants.This case was investigated by the Drug Enforcement Administration, the Fort Wayne Police Department, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Assistant United States Attorney Anthony W. Geller.
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Former Postal Employee Federally Charged in Case Related to Death of Co-WorkerRead the Press Release
HOUSTON - A 30-year-old Houston man is set to appear in federal court on charges of kidnapping of an employee with the U.S. Postal Service (USPS), announced Acting U.S. Attorney Abe Martinez. The victim was later found deceased.
A criminal complaint was filed under seal Nov. 20, 2017, charging Don Gaines, 30, with kidnapping. Federal authorities arrested him today, at which time the complaint was unsealed. He is expected to appear before U.S. Magistrate Judge Frances Stacy at 10:00 a.m. tomorrow.
The charges allege that Gaines did unlawfully seize, confine, kidnap, abduct and carry away the victim without her consent from Texas to Louisiana for the purpose of killing her or disposing of her body. The victim had been reported missing after she had not shown up for work for two days.
According to the criminal complaint, Gaines worked at the same location as the victim at the time of the alleged crime and was the father of her two children.
On or about Sept. 11, 2017, Gaines allegedly choked the victim in her car and he believed she was dead. However, while transporting her, the woman regained consciousness, according to the charges. Gaines allegedly continued to transport her against her will. The criminal complaint alleges that during the trip, Gaines stopped the car along the feeder road of Interstate 10, took the victim into the woods where he shot her in the head and abandoned her body.
If convicted, Gaines could potentially face the death penalty.
The U.S. Postal Inspection Service conducted the investigation along with the Calcasieu Parish, Louisiana, and Harris County Sheriff’s Offices; Louisiana State University; Louisiana State Police and the Houston Police Department. Assistant U.S. Attorneys John Jocher and Jim McAlister are prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Former Paramedic Supervisor Convicted on 38 Counts Involving Tampering, Wire Fraud, Making False Statements and Identity Theft Regarding His Theft of Fentanyl and MorphineRead the Press Release
Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today that Jason Laut, 40, of O’Fallon, Illinois, was found guilty of 38 counts by a jury sitting in East St. Louis, Illinois. The jury convicted Laut on 38 counts, including six counts of wire fraud, 29 counts of making false statements on narcotics logs, two counts of aggravated identity theft and one count of tampering with the consumer product fentanyl.
Evidence at trial included that, while Laut was acting as a paramedic supervisor for MedStar ambulance company, he tampered with at least 85 vials of fentanyl that were on active duty ambulances by placing a needle through the tamper resistant packaging, removing the fentanyl, and replacing it with water or saline. This action left these tampered vials on ambulances potentially to be used by paramedics who were unaware of the tampering.
Evidence was also presented regarding how Laut altered and falsified documents and records between January of 2013 and May of 2015 to conceal his theft of fentanyl and morphine. These thefts were in addition to the fentanyl removed by tampering. There were 91 unique instances in which Laut stole fentanyl or morphine or both. Fentanyl and morphine are addictive Schedule II controlled narcotic painkillers. These thefts of controlled substances were from narcotic boxes maintained on ambulances in order to render aid to injured individuals consistent with operating procedures approved by a medical director or hospital orders. Memorial Hospital in Belleville supplied Southwestern Illinois EMS system ambulances with the morphine and fentanyl in the narcotic boxes, and suffered the financial loss occasioned by the thefts.
Counts of conviction 1 through 6 charged a wire fraud scheme in which Laut used his MedStar ambulance company administrator access to alter records, known as patient care reports, to indicate falsely that controlled substances had been given to patients.
Counts of conviction 7 through 35 charged that Laut made false statements on narcotics logs submitted to Memorial Hospital. Paramedics used the narcotics logs to record the administration of fentanyl and morphine to patients, and thereby account to Memorial Hospital for the use of the drugs. The jury heard that Laut falsely claimed to have given fentanyl and morphine to patients who did not exist ("phantom" patients) or to patients who did not actually receive fentanyl or morphine.
Counts 36 and 37 of conviction charged that Laut concealed his theft of fentanyl and morphine by utilizing falsely and without authorization the name of a former Memorial Hospital doctor on narcotics logs as authorization for administering fentanyl and morphine, when Laut did not actually administer the drugs. In fact, Laut even claimed to have received such authority, when the doctor no longer worked at Memorial Hospital, to administer fentanyl and morphine to a "phantom" patient.
Counts 1 through 6 for wire fraud, each carry a possible penalty of up to 20 years of imprisonment, a fine of up to $250,000, followed by up to three years of supervised release.
Counts 7 through 35 for making false statements, each carry a possible penalty of up to five years of imprisonment, a fine of up to $250,000, followed by up to three years of supervised release.
Counts 36 and 37 for aggravated identity theft, each carry a mandatory two years of imprisonment consecutive to any other sentence, a fine of up to $250,000, followed by one year of supervised release.
Count 38 for tampering with a consumer product, carries a penalty of up to ten years of imprisonment, a fine of up to $250,000, followed by up to three years of supervised release.
Sentencing has been set for March 2, 2018, in U.S. District Court in East St. Louis, Illinois.
The Federal Bureau of Investigation, the Sparta, Illinois Police Department and the Drug Enforcement Administration conducted the investigation. MedStar Ambulance of Sparta, Illinois, and Memorial Hospital in Belleville assisted in the investigation. Assistant United States Attorneys Ranley R. Killian and Michael J. Quinley prosecuted the case.
Former Jersey City, New Jersey, Official Admits Accepting BribeRead the Press Release
NEWARK, N.J. – A former employee at the Jersey City tax assessor’s office admitted accepting a cash bribe in exchange for changing the tax description for a Jersey City property, Acting U.S. Attorney William E. Fitzpatrick announced.
Bennie Anderson, 60, of Jersey City, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of attempting to obstruct, delay and affect interstate commerce by extortion under color of official right.
According to documents filed in this case and statements made in court:
Jersey City tax descriptions reference how many units a particular property can have. Owners who wanted to change a property’s tax description would have to seek approval from the Jersey City zoning board. The tax assessor's office would change the tax description only if the zoning board approved a zoning variance.
Anderson, by virtue of his position, had the ability to improperly change the tax description without going through the required process. In December 2012, Anderson changed the tax description of a particular property from two to three units in exchange for a cash bribe from the owner.
The extortion count to which Anderson pleaded guilty is punishable by up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 5, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy A. Gallagher in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Gerald Miller Esq., Jersey CityFormer Jefferson County Resident Sentenced for Identity Theft and Student Loan Fraud ChargesRead the Press Release
St. Louis, MO – Malachi Duncan, a/k/a “Demarcus Brewster,” was sentenced to 45 months in prison for charges of student loan fraud and aggravated identity theft. Duncan was further ordered to pay restitution to the victims in the amount of $57,139.00.
According to court documents, Duncan fraudulently used the pedigree information of co-conspirator “Demarcus Brewster” to enroll and gain admission as a full-time student during the 2013-2014 school year at Jefferson College in Hillsboro, MO. As part of the scheme, Duncan fraudulently used Brewster’s identity to obtain federal financial aid, student housing, and on-campus employment. Duncan ultimately was arrested in Memphis, Tennessee where he used an alias to fraudulently enroll as a student, and obtain financial assistance, at the University of Memphis.
Duncan, 32, a former resident of Hillsboro, Missouri, pled guilty in July to one count of conspiracy to commit student loan fraud and one count of aggravated identity theft. He appeared today for sentencing before United States District Judge John A. Ross.
This case was investigated by the United States Secret Service, the United States Postal Inspection Service, the United States Department of Education, the Office of the Inspector General/Social Security Administration, the United States Marshals Service, the Hillsboro Police Department, the Jefferson County Sheriff’s Department, and the Jefferson College Campus Police Department. Assistant United States Attorney Jennifer Roy is handling the case for the U.S. Attorney’s Office.
Five People Plead Guilty to Participating in Fraud that Targeted Elderly Victims Throughout the United StatesRead the Press Release
Five people from the Dubuque, Iowa area who participated in a scheme to defraud victims across the United States have pled guilty in federal court in Cedar Rapids.
Tiffany Reynolds, age 32, Joshua Willis, age 21, Payton McCarville, age 23, Morgan Cornell, age 20, and Paul Chase, age 34, all pled guilty over the last week and each was convicted of one count of wire fraud.
At their plea hearings, all five individuals admitted participating in a scheme to defraud people throughout the United States and that the fraud was primarily targeted towards the elderly. They each admitted that other individuals called victims on the phone and told these victims that a relative was in jail. The caller would then ask the victims to wire money via Western Union or MoneyGram to get the relative released. Each defendant further admitted that the money was being wired to various participants in the fraud who would pick up the wire transfers and each admitted being one of the participants in and around Dubuque who received wire transfers from the victims.
Sentencing for each individual before United States District Court Judge Linda R. Reade will be set after presentence reports are prepared. Willis remains in custody of the United States Marshal pending sentencing. Reynolds, McCarville, Cornell, and Chase remain free on bond previously set. Each person faces a possible maximum sentence of 20 years’ imprisonment, a fine, and 3 years of supervised release following any imprisonment.
Five other people have previously pled guilty to their roles in the scheme. On March 2, 2017, Shawn Vaassen pled guilty and admitted that he too was picking up wire transfers sent to the Dubuque area by victims. At the same plea hearing, Vaassen also pled guilty to unlawfully possessing a sawed off shotgun. On May 9, 2017, Carlos Rodriguez pled guilty and admitted that he was also picking up wire transfers sent to the Dubuque area by victims. Michael and Stephanie Marcov, a married couple, each pled guilty to wire fraud on May 19, 2017, and admitted to picking up wire transfers sent by victims. On October 19, 2017, Tobey Hines pled guilty and admitted that he was also picking up wire transfers sent by victims.
The cases are being prosecuted by Assistant United States Attorneys Timothy Vavricek and Anthony Morfitt and were investigated by the Department of Homeland Security - Investigations and the Dubuque Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are 17-CR-1001, 17-CR-1004, and 17-CR-1038.
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Felon from Hobbs Sentenced to Five Years in Prison for Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Jesus Fabian Jimenez, 41, of Hobbs, N.M., was sentenced today in federal court in Las Cruces, N.M., to 60 months in prison for violating the federal firearms laws by unlawfully possessing firearms and ammunition. Jimenez will be on supervised release for three years after completing his prison sentence.
Jimenez was arrested on Nov. 10, 2016, on an indictment charging him with being a felon in possession of a firearm and ammunition on Jan. 9, 2014, in Lea County, N.M. According to the indictment, Jimenez was prohibited from possessing firearms or ammunition because he previously had been convicted on battery on a peace officer, larceny and trafficking a controlled substance.
On March 3, 2017, Jimenez pled guilty to the indictment without the benefit of a plea agreement.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lea County Drug Task Force and was prosecuted by Assistant U.S. Attorney Marisa A. Ong of the U.S. Attorney’s Las Cruces Branch Office.
The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department the Tatum Police Department and the Jal Police Department, and is part of the NM HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Fairlawn, New Jersey, Tax Preparer Gets 13 Months in Prison for Tax FraudRead the Press Release
NEWARK, N.J. – A tax preparer was sentenced today to 13 months in prison for preparing fraudulent income tax returns on behalf of her clients, causing losses of over $130,000, Acting U.S. Attorney William E. Fitzpatrick announced.
Shirley Arias, a/k/a “Shirley Zambrano,” 43, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging her with one count of aiding and assisting others in the preparation of false and fraudulent tax returns. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Arias was an owner and operator of Santos & Associates in Union City, New Jersey. For the tax years 2012 through 2014, Arias assisted in the filing of income tax returns based on false information. She used a number of fraudulent practices, including falsely claiming deductions and fabricating educational credits in order to obtain refunds for her clients in amounts greater than those to which they were entitled. The bogus returns resulted in a tax loss to the government of approximately $130,279.
In addition to the prison term, Judge Salas sentenced Arias to one year of supervised release and ordered her to pay restitution of $130,279.Acting U.S. Attorney Fitzpatrick credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin, with the investigation. He also thanked special agents with the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt in Newark, for their assistance.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office in Newark.
Defense counsel: Katey Theurer Esq., Jersey City, New Jersey
Erie Woman Admits Preparing False Tax Returns for Herself, Friends and OthersRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, pleaded guilty in federal court to charges of false income tax return and aid or assist false or fraudulent document, Acting United States Attorney Soo C. Song announced today.
Yalonda Ballard, 29, pleaded guilty to eleven counts before United States District Judge David C. Cercone.
In connection with the guilty plea, the court was advised that Ballard prepared false federal income tax returns for herself, friends and others referred to her for calendar years 2012, 2013 and 2014.
Judge Cercone scheduled sentencing for April 16, 2018. The law provides for a total sentence of 42 years in prison, a fine of $2,750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Ballard on bond.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation, conducted the investigation that led to the prosecution of Ballard.
Erie Man Sentenced for Role in Bank RobberyRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, pleaded guilty in federal court to a charge of conspiracy to commit wire fraud, Acting United States Attorney Soo C. Song announced today.
Brian Alex Vergotz, 50, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that from in and around May 2015, to in and around March 2016, Vergotz and a co-defendant engaged in a scheme to defraud auto loan providers by using straw purchasers to buy cars from Vergotz knowing that the vehicles would not actually be in the possession of the straw purchasers. Vergotz and a co-defendant also falsified the loan applications to make the straw purchasers appear more credit worthy.
Judge Cercone scheduled sentencing for April 16, 2018. The law provides for a total sentence of 30 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Vergotz on bond.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Pennsylvania State Police and the Erie Police Department conducted the investigation that led to the prosecution of Vergotz.
Erie Man Sentenced for Role in Bank RobberyRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, has been sentenced in federal court to 4 years probation on his conviction of bank robbery, Acting United States Attorney Soo C. Song announced today.
United States District Judge David S. Cercone imposed the sentence on Eric S. Chadwick, 32.
According to information presented to the court, on February 19, 2015, Chadwick and a co-defendant were involved in the robbery of $1,565 from the First National Bank, located at 3310 West 26th Street, Erie, Pennsylvania. Chadwick has an untreatable form of cancer.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
Acting United States Attorney Song commended the Federal Bureau of Investigation and the Millcreek Township Police Department for the investigation leading to the successful prosecution of Chadwick.
Epsom Man Pleads Guilty to Firearm and Drug Trafficking ChargesRead the Press Release
CONCORD, N.H. - Eric Collins, 43, of Epsom, pleaded guilty in federal court to using and carrying a firearm during and in relation to a drug trafficking crime and possession of controlled substances with intent to distribute, Acting United States Attorney John J. Farley announced today.
According to court documents and statements made in court, in February of 2017, Concord police officers executed a search warrant for the defendant’s vehicle and recovered two firearms, over $7,500 in cash and various controlled substances, including methamphetamine packaged for sale.
Collins is scheduled to be sentenced on March 5, 2018.
“Drugs and guns are a potentially deadly combination,” said Acting U.S. Attorney Farley. “I commend the law enforcement officers whose work on this case helped to improve the safety of our community.”
This matter was investigated by the Concord Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant U.S. Attorney Georgiana L. Konesky.
The case is part of ATF’s Project Safe Neighborhoods initiative, which is a federally-funded program intended to reduce gun violence through law enforcement training, public education, and aggressive law enforcement efforts to investigate and prosecute gun-related crimes.
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Elm City Man Charged with Drug Conspiracy and Distribution of Methamphetamines and HeroinRead the Press Release
GREENVILLE – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Greenville has returned an indictments charging TYRELL ELIZA WATSON, age 25, of Elm City, with conspiracy to distribute heroin and cocaine base, and substantive distribution counts, as well as possession of a firearm by a convicted felon and in furtherance of a drug trafficking offense.
If convicted of any of the charged heroin offences, WATSON would face not more than 20 years imprisonment, $1,000,000 fine and a term of 3 years supervised release following any term of imprisonment. If convicted of the firearm offenses, WATSON would face not more than life imprisonment, $250,000 fine and up to 5 years supervised release following any term of imprisonment.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.
The case is being investigated by Wilson County Sheriff’s Office.
Easton Man Charged with Receipt and Possession of Child PornographyRead the Press Release
Joseph Marcus, 51, of Easton, Pennsylvania was charged today by Indictment with the receipt and possession of child pornography, announced United States Attorney Louis D. Lappen.
If convicted the defendant faces a maximum possible sentence of one hundred years imprisonment, a mandatory minimum fifteen years imprisonment, a mandatory minimum five years supervised release up to lifetime supervised release, a $750,000 fine, a $300 special assessment, and an additional $15,000 special assessment.
The case was investigated by the Department of Homeland Security, Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Sherri A. Stephan.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
East Windsor Man Sentenced to More Than 5 Years in Prison for Trafficking HeroinRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JHOVANY VALDES, 41, of East Windsor, was sentenced today by Chief U.S. District Judge Janet C. Hall in New Haven to 63 months of imprisonment, followed by four years of supervised release, for trafficking heroin.
According to court documents and statements made in court, this matter stems from a joint law enforcement investigation headed by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department’s Vice and Narcotics Division targeting gang violence and narcotics trafficking in Hartford’s Parkville neighborhood, and related overdoses. The investigation specifically targeted criminal activity being committed by members and associates of the Orange Street Killas (OSK), which operated principally in the area of Orange, Cherry and Arbor Streets. The investigation followed a series of reports of shots fired in the area, and a homicide that was committed on Cherry Street in October 2015. The prosecution was built on court-authorized wiretaps, controlled purchases of narcotics and physical and video surveillance, all of which revealed that OSK members acquired heroin and crack cocaine and then sold the narcotics on the streets of Hartford.
The investigation revealed that VALDES supplied an OSK member with thousands of bags of heroin for further distribution.
On February 10, 2017, investigators arrested VALDES and several of his codefendants. On that date, a search of VALDES’ East Windsor residence revealed approximately 155 grams of heroin mixed with fentanyl, most of which was packaged in approximately 2,000 bags, as well as numerous items used to process and package heroin, including a kilogram press. The search also revealed three loaded handguns, one of which had been reported stolen.
VALDES has been detained since his arrest. On August 29, he pleaded guilty to one count of conspiracy to possess with intent to distribute 100 grams or more of heroin.
Sixteen individuals were charged as a result of the investigation.
This matter is being investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department. The Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics Division and Shooting Task Force have provided valuable assistance to the investigation.
The case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Doctor Ordered to Pay $296,000 in Civil Penalties for Controlled Substances ViolationsRead the Press Release
After a non-jury trial, United States District Court Judge John E. Dowdell entered a Judgment yesterday in the amount of $296,000 against Darnell E. Blackmon, M.D., for 430 violations of the Comprehensive Drug Abuse Prevention and Control Act. The violations occurred while Dr. Blackmon was the Medical Director of Enhanced Skin and Body Medical Spa.
Judge Dowdell found that Dr. Blackmon permitted registered nurses to examine and determine the type and course of treatment for patients, and prescribe and/or administer testosterone and phentermine (controlled substances) in his absence and without the presence of another licensed physician. All of this occurred outside the course of his professional practice and with no doctor-patient relationship, as required by the Comprehensive Drug Abuse Prevention and Control Act. Additionally, the Court found Dr. Blackmon failed to obtain a Drug Enforcement Administration registration for the dispensing activities at the spa and failed to maintain controlled substance records as required by the Comprehensive Drug Abuse Prevention and Control Act.
“Any healthcare practitioner who violates the law and puts the public’s health and safety at risk should know we will use all tools at our disposal to hold them accountable as the gatekeepers to controlled substances. This Judgment should alert all practitioners to their responsibilities under the Comprehensive Drug Abuse Prevention and Control Act,” said United States Attorney Shores.
The case was handled by Assistant United States Attorney Marianne Hardcastle.
District Court Enters Permanent Injunctions Shutting Down Two Groups of International Defendants Responsible for Multi-Million Dollar Mail Fraud SchemesRead the Press Release
A federal court in New York entered consent decrees in two civil actions, permanently barring 14 individuals and entities from operating alleged multi-million dollar international mail-fraud schemes.
Both schemes followed a similar pattern, involving a complicated web of actors located across the world. Fraudulent “direct mailers” created letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune. In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee. The letters appeared to come from legitimate sources, typically on official-looking letterhead, but were in fact fictitious individuals and organizations including “Baroness de Rothman,” “DNF Funds Office,” “Finkelstein & Partner,” the “Harrison Institute,” and Marie de Fortune. Moreover, even though the solicitations are in reality identical form letters sent to thousands or tens of thousands of recipients – the letters appear to be personally addressed.
"The Department of Justice is committed to protecting all Americans from fraud and exploitation,” Associate Attorney General Rachel Brand said. “This exploitation is repugnant and the Justice Department will pursue those who target our nation’s seniors and other vulnerable American consumers for financial gain. These consent decrees are just one example of the department’s broad efforts to protect seniors—and every American—from mail fraud."
“The defendants preyed on the elderly and other vulnerable citizens through fictitious lotteries and other exploitive games, unfairly enriching themselves at the expense of these victims,” said Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York. “These consent decrees put the defendants out of the exploitation business. This Office is committed to pursuing the perpetrators and enablers of such schemes, in New York and abroad, to hold them accountable and to protect others from being swindled.”
“These actions are an important step in dismantling the many components of this fraudulent mass-mailing industry,” said Inspector in Charge Regina Faulkerson. “The Postal Inspection Service will continue to aggressively investigate everyone involved in facilitating these predatory mailings.”
United States v. BDK, et al.
The first case, in which consent decrees were entered on Nov. 21, 2017, names defendants located around the globe, including Swiss corporation BDK Mailing GmbH; Singapore companies Mailing Force Pte. Ltd. and Only Three Pte. Ltd; Chantal Seguy of France; Marion Elchlepp of France; Aurora Jouffroy-Brandtner of Switzerland; U.S. corporation Macromark Inc., Macromark employee Mary Ellen Meyer; Mail Order Solutions India Pvt. Ltd. (MOSI), an Indian corporation; and MOSI’s owners, Dharti B. Desai of New York, New York, and Mehul A. Desai of India. The United States’ complaint, filed in September 2016, alleges that the defendants’ fraud scheme victimized hundreds of thousands of Americans, and targeted primarily the elderly and vulnerable. According to the complaint, the victims sent the defendants payments totaling $50 to $60 million annually between 2005 and 2016.
The consent decrees, entered yesterday in the U.S. District Court for the Eastern District of New York, resolve the litigation. As part of the consent decrees, defendants BDK Mailing GmbH, Mailing Force Pte. Ltd. and Only Three Pte. Ltd. (collectively “BDK”) admit that they acted as “direct mailers” responsible for mailing millions of advertisements, solicitations, or promotional materials on behalf of dozens of fictitious psychics, sweepstakes, lotteries and other wealth-building programs (collectively “covered direct mailings”) to hundreds of thousands of potential victims throughout the United States each year between 2005 and 2016. BDK further admits that the solicitations falsely promised that recipients would receive large sums of money, guaranteed money-making methods and/or powerful talismans in return for payment of a fee of $50 to $55. In reality, however, BDK admits the purported senders and the promised winnings were fictitious. Although victims sent the requested fees by cash, check or credit card, they received nothing in return. Defendants Macromark Inc. and Mary Ellen Meyer do not dispute that they facilitated BDK’s rental of numerous “customer lists” containing hundreds of thousands of consumer names that would be used to address BDK’s direct mailing campaigns. Defendant Mail Order Solutions Inc., in turn, would print millions of copies of BDK’s covered direct mailings and deliver them via air cargo and international post into the United States for delivery to unwitting U.S. consumers.
United States v. Ercan Barka, et al.
The second case, in which consent decrees were entered Oct. 5, 2017, names defendants Ercan Barka, a resident of Turkey and New Jersey, Ryan Young of New Jersey, and True Vision LLC, a Delaware-based corporation. The United States’ amended complaint, filed in May 2017, alleges that Barka and Young worked together as “direct mailers,” sending fraudulent solicitations to hundreds of thousands of American victims through an international web of shell companies. The complaint alleges that Barka and Young’s mailings informed recipients that they had won prizes including millions of dollars in cash and luxury cars, and that recipients would receive delivery of the prizes upon payment of a fee. Victims allegedly received nothing in return for their payments, while Young and Barka collected an estimated $29 million from American victims from 2012 through 2016.
Under the consent decrees entered in both cases, the defendants may not use the U.S. mail to distribute fraudulent mailings or any mailings promoting similar schemes. The consent decrees also prevent the defendants from printing, receiving, handling, opening, forwarding, or processing any such direct mailings. The defendants are also prohibited from creating, renting, or selling any lists of demographic information relating to consumers who have responded to defendants’ or other certain direct mailings. Nor may the defendants process any payments received in response to certain direct mailings. Finally, the consent decrees authorize the U.S. Postal Inspection Service to return any victim money or personal checks sent to the defendants and detained by the Postal Inspection Service.
The United States’ cases are being handled by Trial Attorneys Gabriel Scannapieco and Ann Entwistle of the Civil Division’s Consumer Protection Branch, and Chief of Affirmative Civil Enforcement John Vagelatos and Assistant U.S. Attorney Thomas Price of the U.S. Attorney’s Office for the Eastern District of New York, in coordination with the U.S. Postal Inspection Service.
Additional information on the original enforcement actions and mass mailing schemes is at: https://www.justice.gov/opa/pr/justice-department-and-law-enforcement-partners-announce-civil-and-criminal-actions-dismantle. Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.