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Wednesday 27 September 2017
Former Head of SoCal Software Firm and IT Executive at Australian Bank Charged in Bribery Scheme to Inflate Revenues and Trigger $98 Million Bonus Payment Related to Purchase of Software CompanyRead the Press Release
LOS ANGELES – A federal grand jury today returned an indictment that alleges the former head of Santa Monica-based ServiceMesh, Inc. paid bribes to former IT executives at Commonwealth Bank of Australia to approve millions of dollars in contracts that inflated ServiceMesh revenues and fraudulently caused Computer Sciences Corporation (CSC) to pay a nearly $100 million incentive bonus as part of CSC’s purchase of the cloud software company.
The 15-count indictment details a bribery and kickback scheme that developed over several years and involved two shell corporations.
The indictment charges Eric Pulier – the founder, CEO and largest shareholder of ServiceMesh – with orchestrating the international fraud scheme involving his payment of approximately $2.5 million in bribes to two senior technology executives at Commonwealth Bank of Australia (CBA). In exchange for the bribes, the indictment alleges, the IT executives facilitated $10.4 million in contracts for the sale of software from ServiceMesh to CBA in late 2013 and January 2014. The CBA contracts triggered an “Earnout” payment as part of a sale agreement with CSC that caused CSC to pay an additional $98 million to ServiceMesh shareholders, about $30 million of which went directly to Pulier.
The indictment also charges Jon Waldron, a former IT manager at CBA, with participating in the scheme by facilitating the approval of contracts with ServiceMesh in exchange for approximately $1.9 million in bribes, most of which was paid to him through a shell company in New Zealand.
Warrants for the arrest of Pulier, 50, of Los Angeles, and Waldron, 47, of Sydney, Australia, have been issued. Pulier is expected to surrender to authorities in the coming days. Waldron remains in Australia facing related charges brought by Australian authorities.
The 42-page indictment details an elaborate scheme in which Pulier agreed to pay bribes to Waldron and another CBA IT executive, Keith Hunter, in exchange for their assistance in facilitating contracts to help boost ServiceMesh revenue. The contracts were needed to push ServiceMesh revenues over $20 million – the threshold that triggered CSC paying the incentive bonus. As a result, CSC paid ServiceMesh shareholders, of which Pulier was the largest, an Earnout payment of $98 million in March 2014.
A portion of Pulier’s ServiceMesh shares were held by a company called TechAdvisors. The indictment alleges that after TechAdvisors received its Earnout payment, Pulier caused TechAdvisors to transfer $4.8 million to a purported nonprofit company named Ace, Inc., which was later renamed The Ace Foundation. Ace was headed by a childhood friend of Pulier, who transferred $2.5 million to accounts held by Waldron and Hunter in Australia, New Zealand and the United States.
The indictment filed today charges Pulier and Waldron with conspiracy to commit securities fraud and wire fraud, one count of securities fraud and four counts of wire fraud.
Pulier alone is further charged with six counts of interstate travel and use of interstate facility in aid of commercial bribery, obstruction of justice, and two counts of filing a false tax return. The obstruction of justice charge relates to Pulier’s alleged effort to influence a former ServiceMesh executive to provide false information to the FBI and Grand Jury about payments made by Pulier through TechAdvisors. The tax fraud charges relate to charitable deductions taken by Pulier for payments by Ace made to Waldron, Hunter, and others.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The statutory maximum penalties for the charges in the indictment are: 25 years in federal prison for the conspiracy and securities fraud counts, 20 years for each count of wire fraud, five years for each count of interstate travel in aid of commercial bribery, 10 years for the obstruction of justice count, and three years for each of the filing false tax return charges.
Hunter was previously charged in a two-count information with conspiracy to commit securities fraud and wire fraud.
The United States Securities and Exchange Commission today filed a civil action against Pulier and Waldron that charges them with securities fraud.
The criminal case stemming from the ServiceMesh fraud scheme is being investigated by the Federal Bureau of Investigation and IRS Criminal Investigation.
The United States Attorney’s Office expressed appreciation to the New South Wales Police Force, Fraud and Cybercrime Squad, for their assistance in this investigation.
This case is being prosecuted by Stephen A. Cazares and Scott Paetty of the Major Frauds Section.
Former Executive Director of New York City Non-Profit Organization Sentenced to Four Years in Prison for Corruption OffensesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that KWAME INSAIDOO, the former executive director of United Block Association (“UBA”), a New York-based non-profit organization, was sentenced to 48 months in prison and his wife ROXANNA INSAIDOO was sentenced to 30 months in prison, in connection with their embezzlement of over $580,000 from UBA, defrauding their mortgage lender of approximately $200,000, and related crimes. They were convicted on May 2, 2017, following a one-week jury trial before United States District Judge Valerie E. Caproni, who also imposed today’s sentence.
Acting U.S. Attorney Joon H. Kim said: “As a Manhattan jury found, Kwame Insaidoo and Roxanna Insaidoo stole hundreds of thousands of dollars from a government-funded non-profit organization dedicated to serving senior citizens. The Insaidoos enriched themselves and their family with taxpayer money that was supposed to support four senior centers in Upper Manhattan. Now this husband-and-wife crime duo will serve time in prison for those crimes.”
In imposing sentence, Judge Caproni stated that the “message has to be sent” that “it is not acceptable to steal money from the City that is designed for charitable goals to line your own pockets.”
According to the Indictment, other filings in Manhattan federal court, and the evidence admitted at trial:
UBA was a non-profit organization headquartered in New York, New York, that was controlled by KWAME INSAIDOO, its former Executive Director. UBA had contracts with New York City through which it received taxpayer funds, including federal funds, to operate and provide healthy meals and programming to the elderly at four senior centers in Upper Manhattan.
As the jury found, KWAME INSAIDOO abused his authority as UBA’s Executive Director to embezzle, with the assistance of his wife, ROXANNA INSAIDOO, over $580,000 of UBA’s funds for his own benefit and that of his wife and son. KWAME INSAIDOO and ROXANNA INSAIDOO concealed their embezzlement by laundering the money, in part, through a shell company that they had created. KWAME INSAIDOO and ROXANNA INSAIDOO used the embezzled funds to pay for personal expenses, including the mortgage for their Long Island residence and the purchase of a Mercedes Benz and a Cadillac. They also wired more than $300,000 to family members living abroad.
In an effort to evade scrutiny regarding the embezzled funds, KWAME INSAIDOO repeatedly lied to the City, including to its auditors, in order to maintain UBA’s funding and to conceal the funds he and his wife had diverted to their shell company.
In 2011, KWAME INSAIDOO and ROXANNA INSAIDOO also engaged in a scheme to defraud their mortgage lender in connection with a modification of their mortgage under the federally-sponsored Home Affordable Modification Program, by underreporting their income and assets, including the hundreds of thousands of dollars they had embezzled from UBA. This scheme led to a write-off of almost $200,000 from KWAME INSAIDOO and ROXANNA INSAIDOO’s home mortgage.
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In addition to the prison terms imposed today by Judge Caproni, KWAME INSAIDOO, 61, and ROXANNA INSAIDOO, 63, both of Bay Shore, Long Island, were ordered to forfeit a sum of $779,039.62.
Mr. Kim praised the outstanding investigative work of the New York City Department of Investigation and the Criminal Investigators of the United States Attorney’s Office for the Southern District of New York.
The case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Eli J. Mark and David Zhou are in charge of the prosecution.
Former Commercial Director of Essex Holdings Inc. Charged in $30 Million Ponzi Scheme and Separate $2.7 Million Scheme Related to South Carolina Development FundsRead the Press Release
The former Commercial Director of Essex Holdings, Inc., was charged in two separate fraud schemes totaling more than $33 million in fraudulently obtained funds. The first scheme involved nearly 100 investors who purchased $30 million of promissory notes purportedly secured by interests in iron ore mining in Chile. The second scheme involved unlawfully obtaining $1.2 million in economic development funds as well as valuable industrial property from the State of South Carolina.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Anthony Joseph Baker, 37, formerly a resident of Miami-Dade County, Florida, was charged with one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and six counts of wire fraud, in violation of Title 18, United States Code, Section 1343. The case is assigned to United States District Judge Robert N. Scola in Miami. In related cases, Navin Shankar Subramaniam Xavier, a/k/a "Navin Xavier," 44, formerly of Miramar, was convicted in Case No. 16-20685-CR-DPG of related charges and was sentenced on May 16, 2017 to 180 months imprisonment. Charles E. Ashby, 46, of Pembroke Pines, was convicted in Case No. 17-20478 –CR-UU and is scheduled to be sentenced before U.S. District Judge Ursula Ungaro on October 17, 2017 in Miami.
According to documents filed in court, from October 2012 through May 2014, Xavier, Baker, Ashby and others operated Essex Holdings, Inc. (“Essex Holdings”) from an office in Miami Gardens. Xavier was the Chief Executive Officer, Baker was the Commercial Director and second most senior employee, and Ashby was the head of IT operations. Xavier, Baker and others raised more than $30 million from nearly 100 investors for supposed investments in sugar transportation and shipping, as well as iron ore mining in Chile. The conspirators used a false financial statement, forged documents, and false promises of fixed rates of return, to induce investors to invest with Essex Holdings. Most of the money was used for purposes other than what was promised, including to support lavish spending by the conspirators. Eventually, Essex Holdings used new investor money to pay old investors in a Ponzi-like fashion before the scheme collapsed. Evidence filed in court in a related criminal case showed that actual investor losses from the scheme exceeded $29 million.
The second scheme involved Xavier using Essex Holdings to obtain $1.2 million in payments and approximately $1.5 million worth of commercial real estate from the South Carolina Coordinating Council for Economic Development (“SCCCED”), a division of the South Carolina state government, that was supposed to be used to develop a dilapidated industrial property into a diaper plant and rice packaging facility. According to documents filed in court, Baker provided false financial documentation to SCCCED in order to obtain the contract. In order to get paid under the contract, according to the Indictment, Baker and Ashby participated in the falsification of invoices and bank statements to make it appear that Essex Holdings had performed work at the site and paid a contractor for that work. These false documents were then provided to South Carolina authorities so that the conspirators could get paid under the contract. Funds from the South Carolina fraud were then diverted to the personal benefit of the conspirators, and were used to make payments in relation to the Essex Holdings iron-ore scheme.
Mr. Greenberg commended the investigative efforts of the FBI, the Miami Regional Office of the U.S. Securities and Exchange Commission, and the South Carolina Office of Inspector General, for assisting with this matter. The matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy and Alison W. Lehr.
An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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.
Former Chief Engineer for Macomb County Public Works Department Pleads Guilty to Bribery ConspiracyRead the Press Release
A former Chief Engineer for Macomb County’s Public Works Department, James Pistilli, 68, of Holly, pleaded guilty today to conspiracy to commit bribery, Acting United States Attorney Daniel L. Lemisch announced.
Lemisch was joined in the announcement by David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service.
The charge to which Pistilli pleaded guilty occurred in 2014. At that time, Pistilli worked for a private engineering firm. Pistilli conspired with fellow engineer Paulin Modi and others to pay a $2,000 cash bribe to Steven Hohensee, who was then the Superintendent of the Department of Public Works for Washington Township. Unbeknownst to Pistilli, Hohensee was cooperating with the FBI.
Pistilli is scheduled to be sentenced on January 30, 2018 at 1:30 p.m., and faces up to 5 years’ imprisonment and a fine of $250,000.
This case is part of the government’s wide-ranging corruption investigation centered in Macomb County, Michigan. The investigation of this case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey and R. Michael Bullotta
Florida Resident Sentenced to 7 Years in Federal Prison for Role in Stock "Pump and Dump" SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAMIAN DELGADO, also known as “Michael Neumann,” 44, of Orlando, Florida, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to 84 months of imprisonment, followed by three years of supervised release, for his role in a securities fraud scheme.
According to court documents and statements made in court, between approximately 2009 and July 2016, DELGADO conspired with others, including Christian Meissenn and William Lieberman, to defraud investors through a stock “pump and dump” scheme. DELGADO and his co-conspirators induced investors to purchase securities by making false and misleading representations in calls, emails and press releases concerning the securities and the issuing companies, thereby causing the price of those securities to become falsely inflated. The issuing companies, which were essentially shell companies with virtually no legitimate business activities, were controlled by Lieberman and others. They included Terra Energy Resources Ltd. (stock symbol “TRRE”); Mammoth Energy Group, Inc. (stock symbol “MMTE”), a company that later became Strategic Asset Leasing Inc. (stock symbol “LEAS”); Trilliant Exploration Corporation (stock symbol “TTXP”); Hermes Jets, Inc. (stock symbol “HRMJ”), which later became Continental Beverage Brands Corporation (stock symbol “CBBB”); Dolat Ventures, Inc. (stock symbol “DOLV”), and Fox Petroleum, Inc. (stock symbol “FXPT”).
DELGADO used pseudonyms in his communications with investors in order to conceal his prior felony convictions and his permanent bar by the Securities and Exchange Commission from participating in any offering of penny stocks. His numerous misrepresentations induced investors to purchase securities, thus causing the share price of the securities to become artificially inflated. Certain of DELGADO’s co-conspirators then sold their own preexisting positions in the securities at a profit. They then allowed the price of the securities to fall, leaving investors with worthless and unsalable stock. As a result, victim investors lost millions of dollars.
DELGADO received approximately 25 percent of all money that he induced individuals to invest. His personal gain from the scheme totaled $346,652.18. DELGADO disguised the income by having the funds flow through the trust accounts of various attorneys, including Corey Brinson in Connecticut, to bank accounts in the name of DELGADO’s wife, his stepdaughter and various shell entities he and his wife controlled. DELGADO’s failure to pay taxes on this income resulted in a loss of $54,080 to Internal Revenue Service.
On May 12, 2017, DELGADO pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of tax evasion.
Judge Meyer will issue a restitution order after further submissions by the parties. In addition to making restitution to his victims, DELGADO is required to pay back taxes, interest and penalties to the Internal Revenue Service.
DELGADO, who is released on bond, was ordered to report to prison on November 8.
On January 20, 2017, Brinson, of Hartford, pleaded guilty to one count of engaging in a monetary transaction in property derived from specified unlawful activity. On April 13, 2017, he was sentenced to 36 months of imprisonment.
Meissenn, Lieberman and two other individuals involved in this scheme have pleaded guilty to conspiracy and tax offenses and await sentencing.
This ongoing investigation is being conducted by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Postal Inspection Service, with assistance from the Connecticut Department of Banking and the Hartford and Stamford Police Departments. This case is being prosecuted by Assistant U.S. Attorneys Avi M. Perry and Peter S. Jongbloed.
Citizens with information that may be helpful to this ongoing investigation, or who believe they may have been victimized by this scheme, are encouraged to contact the FBI at (203) 777-6311.
Felon in Possession of a Gun Sentenced in Federal CourtRead the Press Release
Acting United States Attorney Steve Butler of the Southern District of Alabama announced that Terrance Dees, 34, of Mobile, was sentenced yesterday in federal court on a charge involving his illegal possession of two firearms. The indictment alleged and Dees admitted that he had three prior convictions for drug felonies when the authorities found him in possession of the guns. Court documents reflect that Mobile police executed a search warrant at Dees’ residence where they found marijuana, pills and the guns. Dees pled guilty to the gun charge in December of 2016.
United States District Court Judge Kristi K. Dubose sentenced Dees to 60 months imprisonment, to be followed by a three-year term of supervised release. Dees will undergo treatment for drug abuse while in prison and as a condition of his supervised release. No fine was imposed, but the judge ordered that Dees pay the mandatory $100 special assessment.
The case was investigated by the Mobile Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorney Gloria Bedwell.
Felon from Socorro Arraigned on Federal Commercial Robbery and Firearms Charges Arising Out of Aug. 29, 2017 Crime SpreeRead the Press Release
ALBUQUERQUE – Martin Garcia, 37, of Socorro, N.M., was arraigned this morning on a five-count indictment charging him with violating the Hobbs Act and federal firearms laws. The charges in the indictment arise out of an Aug. 29, 2017 crime spree during which Garcia allegedly robbed two commercial businesses at gunpoint, attempted to run over an officer, and shot a firearm in the direction of an officer who was trying to apprehend him. Garcia entered a not guilty plea to the indictment.
The indictment, which was filed on Sept. 21, 2017, charges Garcia with violating the Hobbs Act by robbing two Albuquerque-area businesses engaged in interstate commerce, a wireless communications service provider and a pizza restaurant, at gunpoint on Aug. 29, 2017. It also charges Garcia with brandishing a firearm during the first robbery and discharging a firearm during the second robbery, and with being a felon in possession of a firearm. The indictment alleges that Garcia committed the five crimes in Bernalillo County.
According to court filings, Garcia robbed two employees of a wireless communications service provider at gunpoint on Aug. 29, 2017, and robbed two employees at a pizza restaurant at gunpoint later that same day. Following the second robbery, a high-speed pursuit occurred as officers of the Albuquerque Police Department (APD) attempted to apprehend Garcia. During the pursuit, Garcia allegedly rear-ended a civilian vehicle, attempted to run over an officer who was deploying a spike strip across the road, and discharged a firearm. Officers arrested Garcia after he crashed his vehicle and ran into an abandoned residence. Following the arrest, officers allegedly seized a loaded firearm from a closet in the abandoned residence, a shell casing on the floorboard of the vehicle Garcia had been driving, and a second shell casing on the ground near the driver’s side door of the vehicle.
The FBI arrested Garcia on a federal criminal complaint on Sept. 8, 2017, and the related state charges subsequently were dismissed in favor of federal prosecution. Garcia remains in federal custody pending trial based on judicial findings that he poses a risk of flight and a danger to the community.
If convicted on the Hobbs Act robbery charges, Garcia faces a statutory maximum penalty of 20 years of imprisonment. If convicted on the felon in possession of a firearms charge, Garcia faces a statutory maximum sentence of ten years of imprisonment unless he is deemed to be an armed career criminal, in which case, he faces an enhanced sentence of not less than 15 years of imprisonment. Garcia also faces up a mandatory minimum of seven years of imprisonment for brandishing a firearm in relation to the first robbery and a mandatory minimum of 25 years of imprisonment for discharging a firearm in relation to and during the flight from the commission of the second robbery; these sentences must be served consecutive to any sentence imposed on the other charges.
Charges in criminal complaints and indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Albuquerque office of the FBI and APD, with assistance from the 2nd Judicial District Attorney’s Office. Assistant U.S. Attorney Niki Tapia-Brito is prosecuting the case under a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
East Texas Men Sentenced for Drug Trafficking ViolationsRead the Press Release
TYLER, Texas – Two East Texas men were sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
Quentin Leonta Brown, 40, of Gilmer, Texas, pleaded guilty on May 30, 2017, to conspiracy to distribute and possess with intent to distribute cocaine and crack cocaine and was sentenced to 144 months in federal prison on Sep. 26, 2017, by U.S. District Judge Thad Heartfield.
Saihaine Nijel Freeman, 23, of Longview, Texas, pleaded guilty on May 30, 2017, to possession with intent to distribute crack cocaine and was sentenced to 57 months in federal prison on Sep. 26, 2017, by Judge Heartfield.
According to information presented in court, on Jan. 18, 2017, a federal grand jury returned an indictment charging Brown and Freeman with multiple drug trafficking and firearms violations.
This case was investigated by the Federal Bureau of Investigation, Texas Department of Public Safety, the Gregg County CODE Unit and the Longview Police Department. This case was prosecuted by Assistant U.S. Attorney Mary Ann Cozby
East Texas Men Sentenced for Drug Trafficking ViolationsRead the Press Release
TYLER, Texas – Two East Texas men were sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
Quentin Leonta Brown, 40, of Gilmer, Texas, pleaded guilty on May 30, 2017, to conspiracy to distribute and possess with intent to distribute cocaine and crack cocaine and was sentenced to 144 months in federal prison on Sep. 26, 2017, by U.S. District Judge Thad Heartfield.
Saihaine Nijel Freeman, 23, of Longview, Texas, pleaded guilty on May 30, 2017, to possession with intent to distribute crack cocaine and was sentenced to 57 months in federal prison on Sep. 26, 2017, by Judge Heartfield.
According to information presented in court, on Jan. 18, 2017, a federal grand jury returned an indictment charging Brown and Freeman with multiple drug trafficking and firearms violations.
This case was investigated by the Federal Bureau of Investigation, Texas Department of Public Safety, the Gregg County CODE Unit and the Longview Police Department. This case was prosecuted by Assistant U.S. Attorney Mary Ann Cozby
East Stroudsburg Man Convicted of Assaulting and Fleeing from Federal Park RangerRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Damari Roulhac, age 26, of East Stroudsburg, Pennsylvania, was convicted on September 26, 2017, of charges arising from the hit and run of a United States Park Ranger. The two-day trial was held before United States District Court Judge James M. Munley in Scranton.
According to United States Attorney Bruce D. Brandler, the jury returned the guilty verdict after approximately three hours of deliberation. Roulhac was charged with and convicted of one count of assaulting a law enforcement official, and one count of fleeing from a law enforcement official.
The evidence presented during the trial showed that on the evening of July 1, 2016, United States Park Rangers patrolling the Delaware Water Gap National Recreation Area, encountered Roulhac and ordered him to stop his vehicle. Roulhac refused to obey the Rangers’ instructions and accelerated his vehicle towards one of the Rangers, causing him to jump out of the way. When the Ranger then attempted to detain Roulhac, he accelerated again, striking the Ranger with the vehicle while fleeing the scene of the incident.
Roulhac was able to evade apprehension on July 1, 2016. However, Rangers tracked him down days later, at the Pike County Courthouse, when Roulhac was sentenced for an unrelated DUI conviction.
The case was investigated by Rangers from the National Park Service. Assistant United States Attorneys Phillip Caraballo and Evan Gotlob prosecuted the case.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The combined maximum penalty under federal law is 10 years of imprisonment. There is also a term of supervised release following imprisonment, and up to $250,000 in fines. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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District Court Enters Permanent Injunction Against Illinois Caviar Supplier to Prevent Distribution of Adulterated FoodRead the Press Release
WASHINGTON – A federal court in Illinois permanently enjoined a Metropolis, Illinois caviar supplier from distributing adulterated food, the Department of Justice announced today.
In a complaint filed on Sept. 20 at the request of the U.S. Food and Drug Administration (FDA), the United States alleged that Mary Parrish, doing business as Fort Massac Fish Market, violated the Federal Food, Drug, and Cosmetic Act. According to the complaint, the defendant caused ready-to-eat caviar to become adulterated by being prepared, packed, or held under insanitary conditions and by failing to comply with seafood Hazard Analysis and Critical Control Point regulations, which are designed to mitigate food safety hazards associated with the processing of fish and fishery products.
"Consumers should be able to trust that their food is produced under safe and sanitary conditions," said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. "Where food manufacturers prepare food using substandard practices, the Department of Justice will work aggressively with the FDA to enforce our nation’s food safety laws."
The complaint, filed with the U.S. District Court for the Southern District of Illinois, alleged that two FDA inspections of Fort Massac in 2016 revealed poor sanitation practices, including failures to sanitize hands, utensils, and food surfaces; insect residue throughout the building; and a pet dog in the facility. According to the complaint, Parrish also failed to ensure the temperature of ready-to-eat caviar remained at a level low enough to control Clostridium botulinum growth and toxin formation, which can cause botulism. The complaint states that FDA warned Parrish of these violations in April 2016, but observed similar deficiencies during a December 2016 inspection.
"Consumers should be able to trust that the food they buy is safe," said U.S. Attorney Donald S. Boyce for the Southern District of Illinois. "We will continue to work with the FDA to combat and deter conduct that leads to the distribution of contaminated food."
"By violating food safety regulations, Fort Massac Fish Market put people at unnecessary risk for serious food poisoning," said FDA Associate Commissioner for Regulatory Affairs Melinda K. Plaisier. "The FDA took action to protect public health by requiring that the
defendant cease operations until they can demonstrate that they can produce food that meets important safety requirements."
The defendant agreed to be bound by a consent decree of permanent injunction. As part of that settlement, Parrish stated that she no longer processes or distributes food. Under the terms of the consent decree as entered by the court, Parrish may not resume such activity before taking steps to ensure the safety of her food and receiving FDA authorization.
This matter was handled by Trial Attorney Jacqueline Blaesi-Freed of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Nicholas Biersbach of the U.S. Attorney’s Office for the Southern District of Illinois, with the assistance of Associate Chief Counsel for Enforcement Yen Hoang of the FDA’s Office of General Counsel, Department of Health and Human Services.
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 Southern District of Illinois, visit its website at https://www.justice.gov/usao-sdil.
District Court Enters Permanent Injunction Against Illinois Caviar Supplier to Prevent Distribution of Adulterated FoodRead the Press Release
A federal court in Illinois permanently enjoined a Metropolis, Illinois caviar supplier from distributing adulterated food, the Department of Justice announced today.
In a complaint filed on Sept. 20 at the request of the U.S. Food and Drug Administration (FDA), the United States alleged that Mary Parrish, doing business as Fort Massac Fish Market, violated the Federal Food, Drug, and Cosmetic Act. According to the complaint, the defendant caused ready-to-eat caviar to become adulterated by being prepared, packed, or held under insanitary conditions and by failing to comply with seafood Hazard Analysis and Critical Control Point regulations, which are designed to mitigate food safety hazards associated with the processing of fish and fishery products.
“Consumers should be able to trust that their food is produced under safe and sanitary conditions,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Where food manufacturers prepare food using substandard practices, the Department of Justice will work aggressively with the FDA to enforce our nation’s food safety laws.”
The complaint, filed with the U.S. District Court for the Southern District of Illinois, alleged that two FDA inspections of Fort Massac in 2016 revealed poor sanitation practices, including failures to sanitize hands, utensils, and food surfaces; insect residue throughout the building; and a pet dog in the facility. According to the complaint, Parrish also failed to ensure the temperature of ready-to-eat caviar remained at a level low enough to control Clostridium botulinum growth and toxin formation, which can cause botulism. The complaint states that FDA warned Parrish of these violations in April 2016, but observed similar deficiencies during a December 2016 inspection.
“Consumers should be able to trust that the food they buy is safe,” said U.S. Attorney Donald S. Boyce for the Southern District of Illinois. “We will continue to work with the FDA to combat and deter conduct that leads to the distribution of contaminated food.”
“By violating food safety regulations, Fort Massac Fish Market put people at unnecessary risk for serious food poisoning,” said FDA Associate Commissioner for Regulatory Affairs Melinda K. Plaisier. “The FDA took action to protect public health by requiring that the defendant cease operations until they can demonstrate that they can produce food that meets important safety requirements.”
The defendant agreed to be bound by a consent decree of permanent injunction. As part of that settlement, Parrish stated that she no longer processes or distributes food. Under the terms of the consent decree as entered by the court, Parrish may not resume such activity before taking steps to ensure the safety of her food and receiving FDA authorization.
This matter was handled by Trial Attorney Jacqueline Blaesi-Freed of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Nicholas Biersbach of the U.S. Attorney’s Office for the Southern District of Illinois, with the assistance of Associate Chief Counsel for Enforcement Yen Hoang of the FDA’s Office of General Counsel, Department of Health and Human Services.
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 Southern District of Illinois, visit its website at https://www.justice.gov/usao-sdil.
Department of Justice Awards more than $1.1 Million to Programs to Help Protect Washington Children from Sexual ExploitationRead the Press Release
The Department of Justice is sending more than $1.1 million to programs in Washington State that protect children from sexual exploitation, announced U.S. Attorney Annette L. Hayes. The largest grant, just over $450,000 will go to the Seattle Internet Crimes Against Children Task Force (ICAC), a Seattle Police based organization that assists with investigations across the region.
“Our ICAC task force in Western Washington is a critical tool in stopping the sexual exploitation of children,” said U.S. Attorney Annette L. Hayes. “These grant dollars will provide cutting edge software and training for detectives and forensic investigators who work every day to identify those using the internet to abuse and sexually molest our children.”
In 2016, ICAC task forces across the country conducted more than 61,000 investigations and about 78,000 forensic exams, which led to more than 9,300 arrests.
In addition to the ICAC funds, three Indian Tribes and Washington State received grants to assist with programs to monitor and track sex offenders under the Adam Walsh Child Protection and Safety Act of 2006. The grants include:
- $292,711 to the Skokomish Indian Tribe to implement the Sex Offender Notification Act (SORNA).
- $228,850 to the Nooksack Tribe for officer training on SORNA and on responding to incidents involving sex offenses.
- $35,081 to the Port Gamble S’Klallam Tribe to replace equipment and provide training for those working in sex offender notifications.
- $145,918 to Washington State to enhance sex offender notification programs.
The Office of Justice Programs (OJP), headed by Acting Assistant Attorney General Alan R. Hanson, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP and its components can be found at www.ojp.gov.
DOJ, EPA Team Receive Top Honors for Public ServiceRead the Press Release
Today members of the Department of Justice and the Environmental Protection Agency (EPA) will receive one of the most prestigious awards for their achievements in public service.
Senior Trial Attorney Josh Van Eaton of the Justice Department’s Environment and Natural Resources Division (ENRD), Director Phillip Brooks of the EPA’s Air Enforcement Division, and Director Byron Bunker of the EPA’s Compliance Division will be honored with the Samuel J. Heyman Service to America Medal (Sammies) as the Federal Employees of the Year.
“The investigation and trial team in the Volkswagen case, from both the Justice Department and EPA, put forth exemplary efforts and achieved results that are worthy of this prestigious award,” said Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division. “We are particularly proud that ENRD attorney Josh Van Eaton is being recognized at the ceremony with this well deserved honor.”
Van Eaton, Brooks, and Bunker headed an interagency and intergovernmental team made up of scientists, engineers, and attorneys that investigated and built the landmark civil case against German automaker Volkswagen for violations of U.S. environmental laws. Volkswagen’s violations included the installation of software used to fool federal and state regulators, and selling diesel vehicles that did not meet U.S. pollution standards.
“Volkswagen’s prolonged deception and subsequent cover-up really offend the moral compass,” Van Eaton said. “This was an opportunity to do something historic and also achieve a just result for the environment and our country and I am proud to say our team did just that.”
With Van Eaton leading civil litigation, Bunker directing EPA’s office that conducts tests for compliance with clean air regulations, and Brooks leading the EPA office of air quality enforcement, their teams were able to develop comprehensive, long term, and environmentally meaningful terms of settlement.
Through their coordination and persistent negotiations, Volkswagen agreed to the largest legal settlement ever secured against a car manufacturer. The settlement includes the largest ever civil penalty under the Clean Air Act and programs to remediate environmental harm, buy back offending cars, and compensate car owners.
Correctional Officer Charged with Violating an Inmate's Civil RightsRead the Press Release
PANAMA CITY, FLORIDA – Michael J. Baxter, 49, of Grand Ridge, Florida, was arraigned today in the U.S. District Court in Panama City after a federal grand jury returned an indictment, unsealed today, charging him with falsifying records and depriving an inmate of his constitutional rights. The indictment was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
The indictment alleges that, in July 2015, Baxter, while acting as a state correctional officer at the Apalachee Correctional Institution, assaulted an inmate, resulting in bodily injury. The indictment further alleges that, in July 2015, Baxter knowingly falsified an incident report to obstruct the investigation.
The trial is scheduled for December 4, 2017, at 8:15 a.m.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt in a court of law.
The case is being investigated by the Federal Bureau of Investigation, the Florida Department of Corrections – Office of Inspector General, and the Florida Department of Law Enforcement. The case is being prosecuted by Assistant United States Attorney David L. Goldberg.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Convicted Heroin Dealer Pleads Guilty to Trafficking Heroin and Deadly FentanylRead the Press Release
PITTSBURGH – Henry T. Little-Proctor a/k/a “Bundles”, of McKeesport, Pennsylvania, pleaded guilty in federal court, on September 26, 2017, to multiple charges of violating federal narcotics and firearms laws, Acting United States Attorney Soo C. Song announced today.
Henry T. Little-Proctor a/k/a Bundles, age 27, formerly of McKeesport, Pennsylvania, pleaded guilty to five counts before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that Little-Proctor conspired to distribute and possessed with intent to distribute both heroin and the even more potent synthetic opiate fentanyl, from late 2015 through July 20, 2016. Specifically, the investigation revealed that Little-Proctor was involved with a fentanyl sale on July 13, 2016, and a heroin sale on July 18, 2016. DEA then executed a federal search warrant on July 20, 2016 at a residence utilized by Little-Proctor. There, federal agents located Full Metal Jacketed ammunition for a .223 Rem caliber assault-style rifle and .22 caliber ammunition, as well as 25 “bundles” (250 stamp bags) of heroin. A receipt for the purchase of the .223 Rem caliber ammunition from Gander Mountain was located in the residence and showed that it was purchased on May 14, 2016, along with two extended length magazines for a AR-15 assault-style rifle and a $100 tactical light. The firearms themselves have yet to be located.
Federal law prohibits a person convicted of a prior felony offense from possessing either a firearm or ammunition and the Court was advised that Little-Proctor had been convicted of multiple crimes, including two prior convictions for heroin dealing.
The defendant specifically admitted to selling the fentanyl that caused the July 2016 death of a young woman.
Judge Cathy Bissoon scheduled sentencing for February 7, 2018, at 2:15 p.m. and remanded the defendant back to the custody of the United States Marshal Service pending the sentencing. The Court ordered a Pre-Sentence Report to be prepared by the United States Probation Office detailing the defendant’s background including his criminal, family, educational and work histories in order to determine if the proposed sentence of 10 years in prison, at least 6 years of Supervised Release and restitution to the victim’s family should be approved by the Court.
Assistant United States Attorney Ross E. Lenhardt, of the Violent Crime Section of the U.S. Attorney’s Office, is prosecuting this case on behalf of the government.
Special Agents and Task Force Officers from the Drug Enforcement Administration and law enforcement officers from the Duquesne Police Department, Homestead Police Department, and Allegheny County Sheriff’s Office conducted the investigation that led to the prosecution of Little-Proctor.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal, state, and local agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Columbia Wal-Mart Cashier Guilty of Passing Counterfeit MoneyRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Courtney Thomas, age 22, of Columbia, pled guilty in federal court in Columbia to Conspiracy, a violation of Title 18, United States Code, § 371. United States District Judge Mary G. Lewis accepted the guilty plea and will sentence her at a later date.
On multiple dates in October 2014, Wal-Mart cashier Courtney Thomas accepted a total of $4,850 in counterfeit money from her co-defendant. Her co-defendant would call or text to learn what register Thomas was working at the Killian Road location. He then went through her line and purchased items of nominal value, paying for them with the counterfeit money. Thomas accepted the counterfeit money and loaded the remaining balance onto Visa cards for their mutual benefit.
Ms. Drake stated the maximum statutory penalty faced by Thomas is imprisonment for five years and a fine of $250,000.
The United States Secret Service, assisted by the Richland County Sheriff’s Office, investigated the case. Assistant United States Attorney Winston David Holliday, Jr., of the Columbia office is prosecuting the case.
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Cleveland man indicted for firing shotgun in Euclid carjackingRead the Press Release
A Cleveland man was indicted in federal court for firing a shotgun during a carjacking in Euclid, law enforcement officials said.
Cody M. Coats, 25, was charged in a three-count indictment with carjacking, discharging a firearm during a crime of violence and being a felon in possession of a firearm.
Coats used an Itahca short-barreled shotgun when he carjacked someone and stole their 2005 Chrysler Crossfire outside a Euclid bar on Aug. 14, 2017, according to the indictment.
He ultimately crashed the car on East 222nd Street near Lakeshore Boulevard following a police chase and was arrested.
Coats possessed a shotgun and 20 12-gauge shotgun shells despite a prior conviction for burglary, according to the indictment.
“In the course of committing a robbery, this defendant fired a shotgun and crashed a stolen car near a busy intersection,” U.S. Attorney Justin E. Herdman said. “We will work with all of our law enforcement partners to ensure violent individuals with firearms cannot prey on law-abiding citizens.”
“ATF is committed to combating gun violence in our communities,” said Trevor Velinor, ATF Special Agent in Charge for the Columbus Field Division. “We will continue to work with our law enforcement partners, including the Euclid Police Department, to arrest violent criminals and make our communities safer.”
“We are pleased that the U.S. Attorney’s Office has adopted this case,” Euclid Police Chief Scott Meyer said. “The officers and detectives of the Euclid Police Department did an outstanding job with the apprehension and investigation. We must all work together to send the message that violent crime will not be tolerated in our communities.”
This case was investigated by the ATF and Euclid Police Department. It is being prosecuted by Assistant U.S. Joseph M. Pinjuh.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the violations.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
California Man Pleads Guilty to Federal Heroin Trafficking Charge in New MexicoRead the Press Release
ALBUQUERQUE – Jamell Damian Harris, Jr., 38, of Los Angeles, Calif., pled guilty today in federal court in Albuquerque, N.M., to a heroin trafficking charge under a plea agreement with the U.S. Attorney’s Office
The DEA arrested Harris in July 2017, after seizing approximately 470 grams (1.04 pounds) of heroin from him during an interdiction investigation at the Amtrak Train Station in Albuquerque. The criminal complaint setting forth the charge against Harris indicated that the heroin was contained in a bundle that was concealed in a suitcase belonging to Harris’ travel companion.
Harris subsequently was indicted on Aug. 8, 2017, and was charged with conspiracy and possession of heroin with intent to distribute on July 13, 2017, in Bernalillo County, N.M.
During today’s change of plea hearing, Harris pled guilty to Count 2 of the indictment charging him with possession of heroin with intent to distribute. In entering the guilty plea, Harris admitted transporting approximately 390.90 grams of heroin from Victorville, Calif., to Albuquerque on a on the Amtrak train by concealing the heroin in a bundle contained inside a shopping bag of men’s clothing in a suitcase belonging to another person with whom Harris was traveling. Harris further admitted that he intended to give the heroin to another individual for further distribution once he reached his final destination of Chicago.
At sentencing, Harris faces a mandatory minimum penalty of five years and a maximum of 40 years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA. Assistant U.S. Attorney Rumaldo R. Armijo is prosecuting the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Buffalo Man Who Led Police on High Speed Chase Sentenced on Cocaine ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy, Jr. announced today that Amani Johnson, 21, of Buffalo, NY, who was convicted of possession with intent to distribute crack cocaine, was sentenced to 30 months in prison by U.S. District Judge Elizabeth A, Wolford.
Assistant U.S. Attorney Patricia Astorga, who handled the prosecution of the case, stated that in the early morning hours of August 5, 2016, Buffalo Police officers received a report of a shooting. A vehicle matching the description of a vehicle that the officers had just observed driving around slowly was reported as being involved in the shooting. A short time later, the officers again saw the same vehicle, a white Ford Fusion, run a stop sign without coming to a complete stop. The officers pulled over the vehicle, which was being driven by the defendant. As officers attempted to communication with Johnson, he drove away from the traffic stop at a high rate of speed. The officers engaged in a high-speed chase of the vehicle for several city blocks. The vehicle then crashed into a large tree and the defendant and three passengers ran from the vehicle. Johnson was taken into custody a short distance from the vehicle.
A loaded revolver was recovered in a garbage can near the car crash and a short distance from where the defendant was apprehended. More than 50 bags of crack cocaine were found in the defendant's pockets.
The sentencing is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Brooke County man sentenced for tax fraudRead the Press Release
WHEELING, WEST VIRGINIA – Vaughn C. Hone, Jr., of Wellsburg, West Virginia, was sentenced to 12 months incarceration for failing to file tax returns, Acting United States Attorney Betsy Steinfeld Jividen announced.
Hone, age 55, pled guilty to one count of “Failure to File a Personal Income Tax Return for Tax Year 2010” and one count of “Failure to File a Personal Income Tax Return for Tax Year 2011” in March 2017. Hone admitted to failing to file income tax in 2010 and 2011 in Brooke County.
Hone was also ordered to pay $170,066 in restitution.
Assistant U.S. Attorney Robert H. McWilliams, Jr. prosecuted the case on behalf of the government. The Internal Revenue Service investigated.
U.S. District Judge John Preston Bailey presided.
Bridgeport Heroin Trafficker Sentenced to 70 Months in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ALBERTO COLBERG, 45, of Bridgeport, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 70 months of imprisonment, followed by three years of supervised release, for trafficking heroin.
According to court documents and statements made in court, this matter stems from an investigation headed by the DEA’s Bridgeport High Intensity Drug Trafficking Area Task Force, Stamford Police Department, Norwalk Police Department and Connecticut State Police into a drug trafficking organization led by Wilfredo Gutierrez, also known as “Bean” and “Big Pun,” and his brother, Bobby Gutierrez, also known as “B.O.” The investigation, which included court-authorized wiretaps, controlled purchases of narcotics and physical surveillance, revealed that Wilfredo Gutierrez, Bobby Gutierrez and others, including COLBERG, conspired to distribute heroin in Fairfield County.
In January and February 2016, investigators made several controlled purchases of heroin from COLBERG. In addition, COLBERG was recorded on prison calls speaking to Wilfredo Gutierrez while Gutierrez was incarcerated. The recordings confirmed that COLBERG helped run the Gutierrez drug trafficking operation while Gutierrez was in prison, or was in a halfway house and his movements were restricted. A wiretap also confirmed that COLBERG assisted Bobby Gutierrez’s narcotics trafficking activities.
As part of his sentence, COLBERG was ordered to forfeit $7,081 that was seized from his residence.
COLBERG has been detained since his arrest on May 27, 2016. On January 3, 2017, he pleaded guilty to one count of conspiracy to possess with intent to distribute heroin.
Nine individuals were charged as a result of the investigation. All pleaded guilty.
On March 16, 2017, Wilfredo Gutierrez was sentenced to 180 months of imprisonment and, on April 24, 2017, Bobby Gutierrez was sentenced to 160 months of imprisonment. Bobby Gutierrez also was ordered to forfeit $171,462 in cash.
The DEA’s Bridgeport High Intensity Drug Trafficking Area Task Force includes members from the Bridgeport, Stamford, Stratford, Norwalk, Milford and Trumbull Police Departments, and the Connecticut State Police.
This case is being prosecuted by Assistant U.S. Attorneys Anthony Kaplan and Heather Cherry.
Benin Man Sentenced to Prison for Stolen Identity Refund FraudRead the Press Release
A Republic of Benin man unlawfully residing in Philadelphia, Pennsylvania was sentenced today to 48 months in prison, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Louis D. Lappen for the Eastern District of Pennsylvania.
Abdou Koudos Adissa was convicted on March 31 of conspiring to commit access device fraud following a jury trial in the Eastern District of Pennsylvania. According to the indictment and evidence presented at trial, from February through June 2014, Adissa was engaged in a conspiracy in which stolen identities were used to file tax returns claiming refunds with the Internal Revenue Service (IRS). Co-conspirators filed fraudulent tax returns seeking more than $800,000 in refunds, which were loaded onto Green Dot prepaid debit cards and sent via Western Union to Nigeria. During a search of the apartment Adissa shared with a co-conspirator, special agents found 106 Green Dot cards in Adissa’s room. Adissa registered the Green Dot cards using stolen IDs and provided his co-conspirators with the direct deposit information related to the cards so that fraudulently obtained refunds could be directed to them. According to the evidence produced at trial, he called Western Union 63 times in three months to facilitate transferring these fraudulent refunds to Nigeria.
In addition to the term of prison imposed, U.S. District Court Judge Gene E. K. Pratter ordered Adissa to serve three years of supervised release and to pay $252,840 in restitution to IRS. Adissa is pending immigration removal proceedings.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Lappen commended special agents of IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, who conducted the investigation, and Assistant U.S. Attorney David J. Ignall and Trial Attorney Carl F. Brooker, IV of the Tax Division, who prosecuted the case.
Benin Man Sentenced to Prison for Stolen Identity Refund FraudRead the Press Release
WASHINGTON – A Republic of Benin man unlawfully residing in Philadelphia, Pennsylvania was sentenced today to 48 months in prison, announced Acting U.S. Attorney Louis D. Lappen for the Eastern District of Pennsylvania. And Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
Abdou Koudos Adissa was convicted on March 31 of conspiring to commit access device fraud following a jury trial in the Eastern District of Pennsylvania. According to the indictment and evidence presented at trial, from February through June 2014, Adissa was engaged in a conspiracy in which stolen identities were used to file tax returns claiming refunds with the Internal Revenue Service (IRS). Co-conspirators filed fraudulent tax returns seeking more than $800,000 in refunds, which were loaded onto Green Dot prepaid debit cards and sent via Western Union to Nigeria. During a search of the apartment Adissa shared with a co-conspirator, special agents found 106 Green Dot cards in Adissa’s room. Adissa registered the Green Dot cards using stolen IDs and provided his co-conspirators with the direct deposit information related to the cards so that fraudulently obtained refunds could be directed to them. According to the evidence produced at trial, he called Western Union 63 times in three months to facilitate transferring these fraudulent refunds to Nigeria.
In addition to the term of prison imposed, U.S. District Court Judge Gene E. K. Pratter ordered Adissa to serve three years of supervised release and to pay $252,840 in restitution to IRS. Adissa is pending immigration removal proceedings.
Acting U.S. Attorney Lappen and Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, who conducted the investigation, and Assistant U.S. Attorney David J. Ignall and Trial Attorney Carl F. Brooker, IV of the Tax Division, who prosecuted the case.
Baltimore Man Convicted of Murdering A Witness in Exchange for Money and DrugsRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Greenbelt, Maryland – Baltimore, Maryland – On September 26, 2017, a jury convicted Troy Allen Lucas a/k/a “Troy Madron,” age 49, of Southwest Baltimore, Maryland of charges relating to the murder-for-hire of Robert Long, who was a cooperating witness in a case pending in the Circuit Court for Baltimore City.
The conviction was announced by the Acting United States Attorney for the District of Maryland Steven M. Schenning; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; Colonel Woodrow Jones, Chief of the Maryland Transportation Authority Police; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
“This investigation is the final chapter in an extended federal investigation resulting in several convictions and the exoneration of an innocent man who was wrongly convicted and sentenced to life in state prison,” said Acting United States Attorney Stephen M. Schenning.
According to evidence presented at the two-week trial, Lucas was a member of "Dead Man Inc." (DMI), a criminal street and prison gang. Lucas symbolized his allegiance to DMI while in prison in 2007 by having a large tattoo of a hangman’s noose around his neck and on his chest.
Jose Morales solicited Lucas and his now deceased brother to kill Morales’s employee, Robert Long, in order to retaliate for Long’s cooperation with the police and to prevent Long from testifying against Morales. Morales paid Lucas in cash and cocaine to kill Long. The federal case focused on the use of cellular telephones with the intent to have Long murdered and the evidence showed that Lucas and Morales used cell phones to contact one another regarding Long’s cooperation and Long’s whereabouts. Minutes after the murder, Lucas called Morales to advise that the “job” was done.
Long was shot twice in the head on March 24, 2008, in an open area behind Traci Atkins Park in southwest Baltimore known as the “Lumber Yard.” The evidence presented at trial showed that Long was shot with a .25 caliber handgun at close range and that Lucas used, carried, and discharged the gun that caused Long’s death.
Judge Roger W. Titus scheduled sentencing for January 3, 2018, and Lucas faces a mandatory minimum sentence of life in prison for murder-for-hire conspiracy and use of interstate commerce facilities in the commission of murder-for-hire. Lucas also faces a maximum life sentence for discharging the firearm during a crime of violence resulting in death.
Jose Joaquin Morales, age 40, of Baltimore, Maryland, was convicted at trial by a federal jury for using a cell phone to arrange the murder-for-hire of Robert Long, and was sentenced to life in prison on December 9, 2013.
Stanley Needleman, age 75, of Baltimore, Maryland was convicted by guilty plea of underreporting $1.2 million in cash on his income tax returns and for failing to file federal forms disclosing the receipt of $10,000 in more or in cash from clients. Needleman testified at both trials reference Morales’s confession to him about the DMI hit.
The prosecution of Morales resulted in the exoneration of Demetrius Smith, who was serving life in state prison for the murder -- a crime he did not commit.
Acting United States Attorney Stephen M. Schenning commended the DEA, Maryland Transportation Authority Police and Maryland State Police for their work in the investigation. Mr. Schenning thanked Assistant United States Attorneys Sandra Wilkinson and Martin Clarke, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Attorney General Jeff Sessions Welcomes Makan Delrahim as Assistant Attorney General for the Antitrust DivisionRead the Press Release
Attorney General Jeff Sessions today welcomed the confirmation of Makan Delrahim as the Department of Justice’s Assistant Attorney General for the Antitrust Division.
“Makan is an outstanding lawyer with a deep devotion to the integrity of our free market system,” said Attorney General Sessions. “His expertise in antitrust enforcement will enable him to follow legal requirements and effectively promote competition to the benefit of consumers and the American economy.”
Mr. Delrahim’s rich antitrust background covers the full range of industries, issues, and institutions touched upon by the critical work of the Antitrust Division. He previously served in the Antitrust Division from 2003 to 2005 as a Deputy Assistant Attorney General, overseeing the Appellate, Foreign Commerce, and Legal Policy sections. During that time, he played an integral role in building the Antitrust Division’s engagement with its international counterparts and was involved in civil and criminal matters. He has also served on the Attorney General’s Task Force on Intellectual Property and as Chairman of the Merger Working Group of the International Competition Network. Mr. Delrahim also served as a Commissioner on the Antitrust Modernization Commission from 2004 to 2007. Earlier in his career, Mr. Delrahim served as antitrust counsel, and later as the Staff Director and Chief Counsel of the U.S. Senate Judiciary Committee.
Prior to his nomination by the President to serve as the Assistant Attorney General for the Antitrust Division, Mr. Delrahim served as Deputy Assistant to the President and Deputy White House Counsel. He is a former partner in the Los Angeles office of the law firm of Brownstein Hyatt Farber Schreck. Mr. Delrahim received his J.D., with high honors, from the George Washington University School of Law, his M.S. from Johns Hopkins University, and his B.S. from the University of California, Los Angeles.
Armed Drug Trafficker Pleads Guilty to Cocaine and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that Tyree Williams, 34, of Rochester, NY, pleaded guilty before U.S. District Judge Charles J. Siragusa to possession with intent to distribute cocaine and possession of firearms in furtherance of a drug trafficking crime. The firearm charge carries a mandatory minimum penalty of five years in prison, a maximum of life, and a fine of $250,000 or both. The drug charge carries a maximum penalty of 20 years, and a fine of $1,000,000 or both.
Assistant U.S. Attorney Charles Moynihan, who is handling the case, stated that Williams was arrested following the execution of a search warrant at 56 Rauber Street in Rochester. During the search, officers recovered a Jimenez Arms, model J.A. Nine, 9mm pistol, on the attic stairs. Above the doorway to the attic, officers recovered a stolen Walther model CCP, 9 mm pistol. On the attic floor, officers found a Glock model 19, 9 mm pistol. All three firearms were loaded. In addition, the police found over 107 grams of cocaine and over 5 grams of heroin throughout the residence, together with packaging, scales, grinders, glassine bags, and a money-counting machine.
The plea is the result of an investigation by the Greater Rochester Area Narcotics Enforcement Team (“GRANET”), under the direction of Rochester Police Department Lieutenant David Gebhardt, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division.
Sentencing is scheduled for January 9, 2018, at 9:15 a.m. before Judge Siragusa.
Armed Career Criminal Sentenced to 300 Months in Federal Prison for Possessing Methamphetamine and Possessing a Loaded FirearmRead the Press Release
Spokane – Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that Christopher Allen Cain, age 52, of Spokane, Washington, was sentenced today for being in possession of methamphetamine with the intent to distribute and being a previously convicted felon in possession of a firearm and ammunition. United States District Court Judge Rosanna Malouf Petersen sentenced Cain, an armed career criminal, to a 300-month term of imprisonment and a five-year term of court supervision following release from Federal prison.
According to information disclosed during court proceedings, a Washington State Patrol Trooper, during the course of a traffic stop of Cain, observed a glass-smoking device commonly used for smoking methamphetamine in close proximity to Cain. Upon further investigation, the Washington State Patrol Trooper observed, in plain view, a handgun on the driver’s side floor board. After securing a search warrant for the vehicle Cain was driving, Washington State Patrol Troopers located a handgun with one round of ammunition loaded in the chamber and another nine rounds of ammunition in the magazine. In close proximity to this firearm were two plastic bags containing methamphetamine. Also located in the vehicle were digital scales, small plastic bags, and additional rounds of ammunition. After a three-day jury trial, the jury return verdicts of guilty to both counts.
Joseph H. Harrington said, “Prosecuting drug-trafficking and firearms-related crimes continues to be a priority for the United States Attorney’s Office for the Eastern District of Washington. In addition to mandatory terms of imprisonment for methamphetamine-trafficking offenses, previously convicted felons and violent felons should be aware that there are serious criminal penalties connected with possessing any firearm, ammunition and body armor and that this office is committed to prosecuting aggressively firearm-related cases in the Eastern District of Washington.”
This case was investigated by the Washington State Patrol and the Spokane Resident Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Earl A. Hicks and Patrick J. Cashman, Assistant United States Attorneys for the Eastern District of Washington.
AnMed Health Agrees to Pay $7 Million to Settle False Claims Act AllegationsRead the Press Release
Columbia, South Carolina------AnMed Health, a South Carolina hospital based in Anderson, South Carolina, has agreed to pay over $7 million to resolve allegations that it violated the False Claims Act by submitting false Medicare claims. The settlement announced today resolves allegations that AnMed Health knowingly disregarded the statutory conditions for submitting claims to the Medicare program for a variety of services, including radiation oncology services, emergency department services, and clinic services.
Specifically, the United States alleged that AnMed Health billed for radiation oncology services for Medicare patients when a qualified practitioner was not immediately available to provide assistance and direction throughout the radiation procedure, as required by Medicare regulations. The settlement also resolves allegations that AnMed Health systematically billed a minor care clinic as if it was an Emergency Department, and billed Emergency Department services as if they were provided by a physician when, in fact, the services were rendered by mid-level providers. Each of these billing practices resulted in higher reimbursements to AnMed Health.
“Our goal in pursuing Medicare fraud is not only to protect taxpayers, but also to ensure that Medicare beneficiaries receive the quality care they deserve,” said Barbara Bowens, Civil Chief for the U.S. Attorney’s Office for the District of South Carolina.
“This is another example of how the False Claims Act whistleblower provisions help protect the public’s interest,” said U. S. Attorney John Horn. “It also reflects our ongoing commitment to safeguard our federal health care programs and the vital care that they provide.”
“Protecting people with Medicare and guarding health resources are top priorities,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Provider organizations seeking to increase profits at the expense of patients and taxpayers should expect such plans to be costly.”
The allegations settled today arose from a lawsuit filed in the Northern District of Georgia by a whistleblower formerly employed by AnMed Health, Linda Jainniney, under the whistleblower provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The lawsuit is captioned United States ex rel. Jainniney v. Anmed Health, et al., 1:12-cv-2941 (N.D. Ga.). Ms. Jainniney will receive $1,202,500 of the United States’ False Claims Act recovery. Ms. Jainniney will also receive $850,136.50 from AnMed Health to resolve her wrongful termination claims under the False Claims Act.
This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Attorney’s Office for the District of South Carolina, and the Department of Health and Human Services Office of the Inspector General.
The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected].
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Amerisourcebergen Specialty Group Pleads Guilty to Distributing Misbranded Drugs and is Sentenced to Pay $260 Million to Resolve Criminal LiabilityRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, AmerisourceBergen Specialty Group (ABSG), a wholly-owned subsidiary of AmerisourceBergen Corporation (NYSE: ABC), one of the nation’s largest wholesale drug companies and number 11 on the Fortune 500 list, pled guilty to illegally distributing misbranded drugs. ABSG agreed to pay a total of $260 million to resolve criminal liability for its distribution of oncology supportive-care drugs from a facility that was not registered with the Food and Drug Administration (FDA). The guilty plea and sentencing took place before United States District Judge Nina Gershon.
The criminal resolution was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; Mark S. McCormack, Special Agent-in-Charge, FDA Office of Criminal Investigations Metro Washington Field Office; Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS OIG), New York Region; Leigh-Alistair Barzey, Special Agent-in Charge, Defense Criminal Investigative Service (DCIS), Northeast Field Office; and Scott Rezendes, Special Agent-in-Charge, Office of Personnel Management, Office of Inspector General (OPM-OIG).
“Today’s guilty plea demonstrates our commitment to investigating and holding accountable any pharmaceutical company that fails to ensure the health and safety of the public. This Office will continue to work actively with the FDA to ensure that those responsible for America’s drug supply scrupulously comply with the law and provide safe products that doctors and patients can trust,” said Acting United States Attorney Rohde. Ms. Rohde expressed her grateful appreciation to the Department of Justice Consumer Protection Branch, the FDA Office of the Chief Counsel and the Alabama Board of Pharmacy.
“Injectable drugs prescribed for patients – especially vulnerable cancer patients – must be pure, sterile and produced in an FDA-compliant facility that is within the supply chain that FDA oversees,” stated Special Agent-in-Charge McCormack. “We will continue to pursue and bring to justice those manufacturers who would violate the public’s trust and endanger their health by attempting to avoid FDA’s oversight authority.”
“Companies that sell oncology drugs from a facility not registered with the FDA threaten the health and safety of cancer patients,” stated HHS OIG Special Agent-in-Charge Lampert. “We will continue to work closely with our law enforcement partners to protect patients from such shortcuts.”
“The illegal misbranding and distribution of drugs threatens the health and safety of U.S. military members, retirees and their dependents,” stated DCIS Special Agent-in-Charge Barzey. “Today’s guilty plea is demonstrative of DCIS’s ongoing commitment to work jointly with the USAO EDNY, FDA, HHS OIG and OPM-OIG, in order to protect members of the Armed Forces and to ensure the integrity of the Defense Department’s TRICARE healthcare system.”
“OPM-OIG agents will continue to work with our law enforcement partners to protect Federal employees, annuitants and their families from companies that would put the health of vulnerable cancer patients at risk,” stated OPM-OIG Special Agent-in-Charge Rezendes.
As set forth in court records, between 2001 and 2014, two of ABSG’s Alabama-based subsidiaries, Medical Initiatives Inc. (MII) and Oncology Supply Company (OSC), prepared millions of syringes that had been pre-filled with oncology supportive care drugs — specifically, Aloxi®, Anzemet®, generic versions of granisetron injection, Kytril®, Neupogen® and Procrit®. Those syringes were shipped to oncology centers, medical practices and physicians for administration to immunocompromised cancer patients undergoing chemotherapy treatment in all 50 states, including to approximately 37 healthcare providers located in the Eastern District of New York.
To prepare pre-filled syringes (PFS), MII removed FDA-approved drug products from their original glass vials and repackaged them into plastic syringes through a process that allowed MII to access and sell excess drug product in the vials, known as “overfill,” that MII was able to extract from the vials. As alleged in the Information, however, MII prepared PFS in an unclean, unsterile environment. Accordingly, MII’s process for creating PFS resulted in some PFS that contained particles or foreign matter, which MII employees identified and termed “floaters.” PFS were also at times not of the quality or purity that MII and OSC represented them to be to their customers.
MII’s business model was to combine the contents of multiple vials in a process known as “pooling.” However, as set forth in the Information, many of the vials used by MII to prepare PFS were designated by the drug manufacturer as “single use” vials, meaning that the manufacturer could not guarantee the sterility of the drug product if the vials were breached. However, in the pooling process, MII’s technicians frequently breached drug vials multiple times, thereby increasing the risk of contamination.
In order to avoid the FDA’s regulatory oversight, ABSG did not register MII as a re-packager or manufacturer with the FDA as required by the Federal Food, Drug and Cosmetic Act. Instead, ABSG inaccurately portrayed MII to its customers and to state agencies as a state-regulated pharmacy in the business of dispensing drugs pursuant valid prescriptions and claimed that MII was otherwise in compliance with state pharmacy laws. By holding MII out as a pharmacy, ABSG unlawfully exploited an exemption to the FDA registration requirement that is reserved for legitimate pharmacies, not for manufacturers or re-packagers.
In connection with the guilty plea, ABSG filed a Statement of Facts setting forth those facts which it is admitting.
As part of its guilty plea, ABSG has agreed to pay a $208 million criminal fine, plus $52 million in criminal forfeiture, for a total financial penalty of $260 million. In addition, ABSG has entered into an agreement with the Office and the Department of Justice’s Consumer Protection Branch to maintain a compliance and ethics program designed to increase accountability of individuals and corporate board members, to increase transparency, and to strengthen ABSG’s compliance with the FDCA. The compliance and ethics program requires corporate board members to review annually the effectiveness of the company’s compliance program and for ABSG to maintain a hotline that will receive and process complaints about any improper practices.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Alixandra E. Smith and Ameet B. Kabrawala are in charge of the prosecution. Senior Litigation Counsel Patrick Jasperse of the Department of Justice Consumer Protection Branch also provided assistance.
Albany Man Pleads Guilty to Child Pornography ChargesRead the Press Release
SYRACUSE, NEW YORK – Michael Gullinese, age 47, of Albany, New York, pled guilty yesterday to distributing, receiving, and possessing child pornography.
The announcement was made by Acting United States Attorney Grant C. Jaquith and Vadim D. Thomas, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
As part of his guilty plea, Gullinese admitted that between January 23, 2017 and his arrest on March 14, 2017, he used his cell phone to send and receive images of child pornography over the Kik instant-messaging application. Gullinese saved to his phone approximately 600 image files and 150 video files of child pornography, some depicting children as young as infants.
Gullinese has a 2010 federal child pornography conviction. He was serving a life term of supervised release at the time of his arrest, having been released from prison in August 2014.
Gullinese is scheduled to be sentenced on January 25, 2018 by Senior United States District Judge Norman A. Mordue. He faces at least 15 years and up to 40 years in prison, at least 5 years and up to lifetime post-imprisonment supervised release, and a maximum $250,000 fine. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
The case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Joseph A. Giovannetti.
This case is prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/
Adult Daycare Facility Agrees to $2.72 Million Settlement to Resolve Allegations of Violating False Claims ActRead the Press Release
NEWARK, N.J. – Edison Adult Medical Daycare (Edison), its former owner, Dinesh Patel, and current owners, Daxa Patel and Satish Mehtani, have agreed to pay the United States and the State of New Jersey $2.72 million to resolve allegations that Edison improperly billed and received payments from Medicaid despite Dinesh Patel having been excluded from participating in Medicaid following his 2012 conviction for accepting kickbacks, Acting U.S. Attorney William E. Fitzpatrick announced today.
On Sept. 19, 2012, Dinesh Patel pleaded guilty to accepting cash kickback payments from Orange Community MRI LLC in exchange for patient referrals. He was later sentenced to three months in jail and two years of supervised release.
On March 17, 2012, Dinesh Patel was excluded by the State of New Jersey from participating in any capacity in the Medicaid program. Later, on Feb. 20, 2014, Dinesh Patel was excluded by the U.S. Department of Health and Human Services from participating in Medicare, Medicaid, and all federal health care programs for a period of five years. Five days after Dinesh Patel’s Medicaid exclusion in 2012, he transferred his 50 percent ownership interest in Edison to his wife, Daxa Patel.Today’s settlement resolves federal and state government allegations that from March 17, 2012, through Aug. 4, 2015, Dinesh Patel violated his exclusion by not ceasing his involvement in the adult daycare facility, and that Edison violated the False Claims Act by submitting claims to and receiving payments from Medicaid while Dinesh Patel directed, managed and supervised activities at Edison. The settlement also resolves allegations that owners Daxa Patel and Satish Mehtani had full knowledge that Dinesh Patel was managing Edison while he was an excluded Medicaid provider.
Dinesh Patel, Daxa Patel, Satish Mehtani, and Edison have agreed to pay $2.72 million plus interest to be split equally between United States and State of New Jersey. Dinesh Patel has also agreed to another five-year exclusion precluding him from participating in all federal health care programs, including Medicaid and Medicare, until 2022.Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Department of Health and Human Services - Office of the Inspector General (HHS-OIG), under the direction of Special Agent in Charge Scott J. Lampert, New York Region, and the N.J. Office of the State Comptroller, Medicaid Fraud Division, under the direction of State Comptroller Philip James Degnan, with the investigation leading to the settlement.
The government is represented by Assistant U.S. Attorney Nicole F. Mastropieri of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark. David Fuchs of the HHS-OIG negotiated the additional period of exclusion.The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.37 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
The claims settled by this agreement are allegations only; there have been no admissions of liability.
Defense counsel:
Edison Adult Medical Daycare: Robert Fogg Esq., Princeton
Dinesh Patel: Steven D. Feldman Esq., New York, and Melissa L. Jampol Esq., New York
Daxa Patel: Nicholas C. Harbist Esq., Princeton
Satish Mehtani: Denis F. Driscoll Esq., Parsippany
ANMED Health agrees to pay $7 million to settle False Claims Act allegationsRead the Press Release
ATLANTA – AnMed Health, a South Carolina hospital based in Anderson, South Carolina, has agreed to pay over $7 million to resolve allegations that it violated the False Claims Act by submitting false Medicare claims. The settlement announced today resolves allegations that AnMed Health knowingly disregarded the statutory conditions for submitting claims to the Medicare program for a variety of services, including radiation oncology services, emergency department services, and clinic services.
Specifically, the United States alleged that AnMed Health billed for radiation oncology services for Medicare patients when a qualified practitioner was not immediately available to provide assistance and direction throughout the radiation procedure, as required by Medicare regulations. The settlement also resolves allegations that AnMed Health systematically billed a minor care clinic as if it was an Emergency Department and billed Emergency Department services as if they were provided by a physician when, in fact, the services were rendered by mid-level providers. Each of these billing practices resulted in higher reimbursements to AnMed Health.
“This is another example of how the False Claims Act whistleblower provisions help protect the public’s interest,” said U. S. Attorney John Horn. “It also reflects our ongoing commitment to safeguard our federal health care programs and the vital care that they provide.”
“Our goal in pursuing Medicare fraud is not only to protect taxpayers, but also to ensure that Medicare beneficiaries receive the quality care they deserve,” said Barbara Bowens, Civil Chief for the U.S. Attorney’s Office for the District of South Carolina.
“Protecting people with Medicare and guarding health resources are top priorities,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Provider organizations seeking to increase profits at the expense of patients and taxpayers should expect such plans to be costly.”
The allegations settled arose from a lawsuit filed in the Northern District of Georgia by a whistleblower formerly employed by AnMed Health, Linda Jainniney, under the whistleblower provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The lawsuit is captioned United States ex rel. Jainniney v. Anmed Health, et al., 1:12-cv-2941 (N.D. Ga.). Under the provisions for whistleblowers under the False Claims Act, Ms. Jainniney will receive $1,202,500 of the United States’ False Claims Act recovery.
This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Attorney’s Office for the District of South Carolina, and the Department of Health and Human Services Office of the Inspector General.
The civil settlement was reached by Assistant U.S. Attorneys David A. O’Neal for the Northern District of Georgia and Beth Warren for the District of South Carolina.
The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 900-HHS-TIPS (800-447-8477).
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.
15 People Charged in Drug Trafficking ConspiracyRead the Press Release
PANAMA CITY, FLORIDA – A federal grand jury returned a nine-count indictment, unsealed today, charging 15 defendants with several federal drug trafficking offenses. The indictment was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
The defendants are:
- Johnny Allen, 26, Panama City Beach, Florida;
- Elijah Segers-Meier, 26, Panama City Beach;
- Alexis Salas, 20, Columbus, Georgia;
- Decorey Walker, 26, Columbus, Georgia;
- Kyle Pate, 33, Panama City Beach, Florida;
- Christopher Pipkins, 28, Columbus, Georgia;
- Kimberly Fuller, 46, Panama City Beach, Florida;
- David Snyder III, 23, Panama City; Florida;
- Ashley Coatley, 36, Panama City Beach, Florida;
- Anthony Servillo, 25, Panama City Beach; Florida;
- Michael Soifert, 24, Panama City Beach, Florida;
- Angela Adams, 26, Columbus, Georgia;
- Mardarrius Collier, 20,Columbus, Georgia;
- John Elliott, 26, Panama City, Florida; and
- Franschwa Riggins, 29, Panama City, Florida.
The charges are:
Conspiracy to Distribute a Controlled Substance: All defendants were charged with conspiracy. Allen, Segers-Meier, Salas, Collier, and Adams were attributed an amount of 100 grams or more of heroin. Riggins was attributed an amount of 500 grams or more of methamphetamine. Allen, Segers-Meier, Salas, and Pate were attributed an amount of 50 grams or more of methamphetamine.
Distribution of a Controlled Substance: Segers-Meier was charged with distributing heroin and methamphetamine. Allen was charged with distributing heroin and fentanyl.
Possession of a Firearm in Furtherance of Drug Trafficking: Segers-Meier was charged with possessing a pistol in furtherance of a drug trafficking crime.
Possession with Intent to Distribute a Controlled Substance: Adams, Collier, and Allen were charged and attributed with 100 grams or more of heroin. Allen and Salas were charged with possessing heroin with the intent to distribute it.
Allen, Segers-Meier, Walker, Fuller, Snyder, Coatley, Servillo, Soifert, and Elliott’s trial is scheduled for December 4, 2017, at 8:15 a.m., at the United States courthouse in Panama City.
This case resulted from an investigation by the Bay County Sheriff’s Office, the Jackson County Sheriff’s Office, the Walton County Sheriff’s Office, the Panama City Beach Police Department, the Panama City Police Department, the Florida Department of Law Enforcement, the 14th District Medical Examiner’s Office, the U.S. Postal Inspection Service, the United States Immigration and Customs Enforcement Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Drug Enforcement Administration. Assistant United States Attorney Aine Ahmed is prosecuting the case.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Tuesday 26 September 2017
White River Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a White River, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on September 19, 2017, by U.S. District Judge Roberto A. Lange.
Louis Anthony Good Shield, age 28, was sentenced to 18 months in custody, followed by 4 years of supervised release, a fine of $1,000, and a mandatory special assessment to the Federal Crime Victims Fund in the amount of $100.
Good Shield was indicted by a federal grand jury on August 16, 2016. He pled guilty on June 27, 2017.
Good Shield admitted that between January 1, 2013, and September 17, 2015, he knowingly and intentionally conspired with others to distribute methamphetamine, a Schedule II controlled substance, in South Dakota. Good Shield assisted other individuals in obtaining methamphetamine and delivering that methamphetamine to others for further distribution in South Dakota. Good Shield’s role in the distribution scheme was to accompany others during the transport of the methamphetamine, and to be “the muscle.”
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services, the Federal Bureau of Investigation, and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Good Shield was immediately turned over to the custody of the U.S. Marshals Service.
Wheeling man admits to firearm chargeRead the Press Release
WHEELING, WEST VIRGINIA - A Wheeling man has admitted to a firearms charge, Acting United States Attorney Betsy Steinfeld Jividen announced.
Levar Jermain Matthews, age 40, pled guilty to one count of “Unlawful Possession of a Firearm.” Matthews, having previously been convicted of Distribution of Crack Cocaine Within 1,000 feet of a School in the United States District Court for the Northern District of West Virginia, admitted to possessing a .38 special caliber revolver. The crime occurred in April 2017 in Ohio County.
Matthews faces up to 10 years incarceration and a fine of up to $250,000. 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 Stephen L. Vogrin prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Wheeling Police Department investigated.
U.S. Magistrate Judge James E. Seibert presided.
Walnut Man Faces Federal Charges of Falsely Reporting Passenger Planned to Blow up Commercial AirplaneRead the Press Release
LOS ANGELES – A Walnut resident has been arrested on federal charges of making a hoax threat by falsely reporting to airline and law enforcement officials that an acquaintance of his planned to blow up an airplane and posed a threat to the United States.
Dino Ninku, 36, of Walnut, was arrested Friday at his residence without incident by FBI Agents. Appearing before a United States Magistrate Judge Friday afternoon, Ninku was ordered held without bond pending trial.
Ninku was charged in a criminal complaint filed last week in United States District Court in Los Angeles with providing false information, a felony offense that carries a statutory maximum penalty of five years in federal prison.
According to the affidavit in support of the complaint, a person later identified as Ninku called the Asiana Airlines reservations center in Los Angeles on August 5 and reported a passenger scheduled to travel from Asia to the United States on August 18 posed a terrorist threat and was threatening to blow up the plane. Ninku, who also told the Asiana representative that the passenger had been recruiting other people in the U.S., provided details about the passenger’s flight itinerary and said that the attack would happen either on a flight from China to South Korea or a flight from South Korea to Los Angeles.
Asiana Airlines reported the information to law enforcement authorities in the United States, China and South Korea. Multiple law enforcement agencies also investigated the threat, including the FBI, which received a similar report via the internet. A report to the Department of Homeland Security also provided details of the alleged threat, adding that the passenger planned to “take out public locations in the U.S. mainland” through the passenger’s “network.” A report was also made to LAPD’s iWatch Program, according to court documents.
As part of the ensuing investigation, the victim of Ninku’s hoax threat became the subject of national security interest, and the United States State Department revoked the victim’s student visa. Further investigation revealed that the victim is a legitimate student pursuing an education, is not a member of a terrorist organization, and does not pose any known threat to the United States.
According to the criminal complaint, Ninku ultimately admitted during an interview with an FBI agent that the victim did not make terrorist threats and does not pose a credible threat to the United States.
At Ninku’s initial court appearance last Friday, he was ordered to appear for a preliminary hearing on October 6 and an arraignment on October 13.
The investigation in this case is being conducted by the FBI, the United States Secret Service and the Federal Air Marshal Service.
The case is being prosecuted by Assistant United States Attorney Michael G. Freedman of the General Crimes Section.
Utah Chiropractor Sentenced to Prison for Tax Evasion and Obstructing the IRSRead the Press Release
SALT LAKE CITY – A former Orem, Utah, chiropractor, who also owned a health care products business, was sentenced to 33 months in prison for tax evasion and corruptly endeavoring to obstruct the internal revenue laws in U.S. District Court in Salt Lake City Monday afternoon. Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney John W. Huber for the District of Utah announced the sentence.
Louis Hansen, 65, was convicted following a jury trial in July. According to documents submitted to the court and evidence presented at trial, Hansen attempted to evade the payment of his federal income taxes for the years 2005, 2006, 2007 and 2010. For the years 2005, 2006 and 2010, Hansen filed a tax return reporting that he owed taxes, but did not fully pay the amounts due. Hansen’s 2007 return was audited and additional taxes assessed.
In March 2012, Hansen sent a check to the Internal Revenue Service (IRS) in the amount of $342,699 that was drawn on a closed bank account held in the name of another individual, and claimed that the check paid off his tax debt. Hansen then sent a signed letter to the revenue officer assigned to collect his unpaid taxes, claiming that he had paid the taxes owed. A few months later, Hansen sent 10 additional checks all in the amount of $425,000, to at least six IRS locations, all drawn on another closed account in the name of a different individual, claiming to pay the back taxes due.
In addition to the term of prison imposed, U.S. District Court Judge Clark Waddoups sentenced Hansen to serve three years of supervised release and ordered him to pay restitution to the IRS in the amount of $342,699.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Huber thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Kevin L. Sundwall and Assistant Chief Andrew Kameros of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
U.S. Attorney’s Office in Chicago Charges Financial Analyst and Former Investment Banker with Fraud for Allegedly Profiting from Insider TradingRead the Press Release
CHICAGO — The U.S. Attorney’s Office in Chicago today charged a financial analyst and a former investment banker with securities fraud for allegedly earning profits from trades they made with non-public information.
JASON NAPODANO, a former Managing Director of a Chicago investment research firm, used material, non-public information he obtained while preparing equity research reports about companies to purchase and sell stock in those companies, according to a criminal information filed in federal court in Chicago. The illegal trading profits netted Napodano approximately $143,000, the information states.
In a related case, BILAL BASRAI, a former Managing Director of a Chicago investment banking firm, used material, non-public information to earn approximately $37,157 in illegal profits from the purchase and sale of stock in three companies. Through his legal counsel, Basrai authorized the U.S. Attorney’s Office to disclose that Basrai has cooperated with the government’s investigation and intends to plead guilty to the charge contained in the information.
Napodano, 43, of Waxhaw, N.C., and Basrai, 43, of Naperville, Ill., are each charged with one count of securities fraud. Arraignments in federal court in Chicago have not yet been scheduled.
The charges were filed by the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago. The charges were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission provided valuable assistance.
According to the charges, Napodano’s alleged fraud scheme began in October 2012 and continued through May 2015. The charges allege that, prior to the public release of equity research reports that contained positive recommendations about the companies, Napodano purchased stock in those companies. He then allegedly sold the stock for a profit after his reports were publicly released and the stock prices of the companies increased. In doing so, Napodano allegedly misappropriated material, non-public information – the timing and contents of the research reports – that belonged to his employer. Napodano also traded based on inside knowledge of a company’s announcement of an in-licensing agreement, the information states.
Basrai’s fraud scheme spanned the first seven months of 2014. Basrai allegedly learned non-public information about a secondary stock offering, an in-licensing agreement, and the release date of a research report, and used it to make profitable trades of three companies’ stock.
The public is reminded that an information is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Securities fraud is punishable by up to 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Jason Yonan and Matthew Kutcher.
U.S. Attorney Announces the Arrest of 10 Individuals, Including Four Division I Coaches, for College Basketball Fraud and Corruption SchemesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the arrest today of 10 individuals, including four Division I NCAA men’s basketball coaches and a senior executive at a major athletic apparel company (“Company-1”), in connection with two related fraud and corruption schemes. In the first scheme, as alleged in the three Complaints unsealed today, college basketball coaches took cash bribes from athlete advisors, including business managers and financial advisors, in exchange for using their influence over college players under their control to pressure and direct those players and their families to retain the services of the advisors paying the bribes. In the second scheme, a senior executive at Company-1, working in connection with corrupt advisors, funneled bribe payments to high school-aged players and their families to secure those players’ commitments to attend universities sponsored by Company-1, rather than universities sponsored by rival athletic apparel companies.
The three Complaints unsealed today charge four coaches, CHUCK CONNORS PERSON, LAMONT EVANS, EMANUEL RICHARDSON, a/k/a “Book,” and ANTHONY BLAND, a/k/a “Tony”; three athlete advisors, CHRISTIAN DAWKINS, MUNISH SOOD, and RASHAN MICHEL; a senior executive at Company-1, JAMES GATTO, a/k/a “Jim,” along with two individuals affiliated with Company-1, MERL CODE and JONATHAN BRAD AUGUSTINE, with wire fraud, bribery, travel act, and conspiracy offenses. The defendants were all arrested this morning in various parts of the country. DAWKINS, SOOD, and AUGUSTINE are scheduled to appear before U.S. Magistrate James L. Cott in federal court later today.
Acting Manhattan U.S. Attorney Joon H. Kim said: “The picture of college basketball painted by the charges is not a pretty one – coaches at some of the nation’s top programs taking cash bribes, managers and advisors circling blue-chip prospects like coyotes, and employees of a global sportswear company funneling cash to families of high school recruits. For the ten charged men, the madness of college basketball went well beyond the Big Dance in March. Month after month, the defendants allegedly exploited the hoop dreams of student-athletes around the country, treating them as little more than opportunities to enrich themselves through bribery and fraud schemes. The defendants’ alleged criminal conduct not only sullied the spirit of amateur athletics, but showed contempt for the thousands of players and coaches who follow the rules, and play the game the right way.”
FBI Assistant Director William F. Sweeney Jr. said: “Today’s charges detail a corrupt practice in which highly rated high school and college basketball players were steered toward lucrative business deals with agents, advisors, and an international athletics apparel company. As alleged, NCAA Division I and AAU coaches created a pay-to-play culture, agreeing to provide access to their most valuable players while also effectively exerting their influence over them. Today’s arrests should also serve as a warning to those who conduct business this way in the world of college athletics.”
According to allegations contained in the three Complaints[1] unsealed today in Manhattan federal court, and other publicly available documents:Overview of the Investigation
The charges in the Complaints result from a scheme involving bribery, corruption, and fraud in intercollegiate athletics. Since 2015, the U.S. Attorney’s Office for the Southern District of New York and the FBI have been investigating the criminal influence of money on coaches and student-athletes who participate in intercollegiate basketball governed by the NCAA. The investigation has revealed two related schemes. In the first scheme (the “Coach Bribery Scheme”), athlete advisors – including financial advisors and business managers, among others – allegedly paid bribes to assistant and associate head basketball coaches at NCAA Division I universities, and sometimes directly to student-athletes at those universities, facilitated by the coaches. In exchange for the bribes, the coaches agreed to pressure and exert influence over student-athletes under their control to retain the services of the bribe-payors once the athletes entered the National Basketball Association (“NBA”).
In the second scheme (the “Company-1 Scheme”), athlete advisors working with high-level Company-1 employees, allegedly paid bribes to student-athletes playing at, or bound for, NCAA Division I universities, and to the families of such athletes. These bribes were paid in exchange for a commitment by the athletes to matriculate at a specific university sponsored by Company-1, and a promise to ultimately sign agreements to be represented by the bribe-payors once the athletes entered the NBA.
Participants in both schemes allegedly took steps to conceal the illegal payments, including (i) funneling them to athletes and/or their families indirectly through surrogates and entities controlled by the scheme participants; and (ii) making or intending to make misrepresentations to the relevant universities regarding the involvement of student-athletes and coaches in the schemes, in violation of NCAA rules.
As described in the complaints, these schemes operated as a fraud on the universities involved, all of which provide scholarships to players and salaries to coaches with the understanding and expectation that the players and coaches are in full compliance with all relevant NCAA rules and regulations. Moreover, these schemes subject the universities to substantial potential penalties by the NCAA, including, but not limited to, financial fines and penalties as well as the potential loss of eligibility to compete in various NCAA events.
The Coach Bribery Schemes
The first scheme alleged in the Complaints entailed bribes by DAWKINS and SOOD, among others, to four men’s basketball coaches, PERSON, EVANS, RICHARDSON and BLAND, in exchange for the coaches’ agreement to direct players under their control, and the players’ families, to retain DAWKINS and SOOD once the players entered the NBA. These corrupt arrangements, which turn on the coaches’ abuse of their positions of trust at the universities, are valuable both to the coaches, who receive cash bribes, and to the bribe-payors, for whom securing a future NBA player as a client can prove extremely profitable.
Allegations Involving Chuck Person
Beginning in or around 2016, and continuing into 2017, PERSON, a former NBA player and the associate head coach at University-1, abused his coaching position at University-1 to solicit and obtain approximately $91,500 in bribe payments from a financial advisor and business manager for professional athletes, who, unbeknownst to PERSON, was providing information to law enforcement (“CW-1”). In exchange for the bribes, PERSON agreed to direct certain University-1 basketball players to retain the services of CW-1 when those student-athletes entered the NBA. The bribe payments initially were arranged by MICHEL, who had a preexisting relationship with PERSON and operated a clothing store that specialized in making bespoke suits for professional athletes. Over the course of the scheme, PERSON did, in fact, arrange multiple meetings between CW-1 and players and/or their family members, in which he falsely touted CW-1’s qualifications without disclosing that he was being bribed to recommend CW-1. For example, at one meeting, PERSON told the mother of a player at University-1 that CW-1 was PERSON’s own financial advisor and had also advised NBA Hall of Fame inductee (and University-1 alumnus) Charles Barkley, neither of which was true. PERSON similarly told another player that CW-1 would purchase him a separate cell phone over which they could communicate so as to conceal the nature of the scheme.
In addition to the bribe payments that PERSON solicited and received, PERSON also arranged for CW-1 to make payments directly to the families of the players PERSON was steering to CW-1. PERSON further claimed to have given approximately $18,500 of the bribe money he received to the families of two student-athletes whom PERSON sought to steer to retain CW-1.
Allegations Involving Lamont Evans
Beginning in 2016, and continuing into 2017, EVANS solicited at least $22,000 from CW-1 and SOOD in exchange for EVANS’s agreement to exert his official influence over certain student-athletes that EVANS coached at two NCAA Division I universities, University-3 and University-4, to retain SOOD and CW-1’s business management and financial advisory services once those players entered the NBA. In return, EVANS (who had received bribe payments from DAWKINS previously), promised SOOD and CW-1 that he would steer multiple specific players to retain their services. Indeed, as a part of the scheme, EVANS arranged for CW-1 to meet with a student-athlete EVANS coached at University-4 (“Player-4”), and arranged for SOOD to meet with the mother of another student-athlete EVANS had previously coached at University-3, for the purpose of pressuring them to retain SOOD and CW-1. Moreover, and in return for the bribe payments, EVANS falsely touted the services of SOOD and CW-1 to players and their families, telling Player-4, for example, that CW-1 was “my guy,” adding, falsely, that CW-1 “has helped me personally. And I trust that,” and assuring Player-4 that “[i]t’s going to benefit you. I promise you that.” In explaining the benefit of bribing an assistant coach such as EVANS, DAWKINS explained to SOOD and CW-1 that because coaches like EVANS could not get “caught” receiving bribes because “his job is on the line,” EVANS and other corrupt coaches would have an incentive to “block” other athlete advisors from accessing the players under the coaches’ supervision and directing those players to the bribe-payors.
Allegations Involving Emanuel Richardson, a/k/a “Book”
Beginning in or around February 2017, and continuing through September 2017, DAWKINS and SOOD, along with two undercover law enforcement agents posing as financial backers of CW-1 (“UC-1” and “UC-2,” respectively), paid or facilitated the payment of $20,000 in bribes to RICHARDSON in return for RICHARDSON’s commitment to steer players under his control at University-4 to retain DAWKINS and SOOD’s services upon entering the NBA. During that period, RICHARDSON repeatedly assured DAWKINS and SOOD that RICHARDSON would use his influence over players at Univeristy-4 to direct them to DAWKINS and SOOD, explaining, with respect to one particular player DAWKINS and SOOD sought to sign (“Player-6”), that Player-6 would be “insulated in who he talks to.” RICHARDSON added, with respect to himself, that “you’re looking at the guy” whom Player-6 trusted. RICHARDSON subsequently facilitated at least one meeting between DAWKINS, SOOD, and a representative of Player-6 for the purpose of having that representative commit the player to retain DAWKINS and SOOD’s business management and financial advisory services. In addition, RICHARDSON appears to have provided a portion of the bribe money he received from DAWKINS, SOOD, UC-1, and UC-2 to at least one prospective high school basketball player (“Player-5”) in order to recruit that player to play for University-4.
Allegations Involving Anthony Bland, a/k/a “Tony,”
Beginning in or around July 2017, and continuing into September 2017, DAWKINS and SOOD, working with UC-1, paid and/or facilitated the payment of at least $13,000 in bribes to BLAND in exchange for BLAND’s agreement to exert his official influence over certain student-athletes BLAND coached at University-5, to retain DAWKINS and SOOD’s business management and/or financial advisory services once those players entered the NBA. In particular, as BLAND told DAWKINS and SOOD, in return for their bribe payments, “I definitely can get the players. . . . And I can definitely mold the players and put them in the lap of you guys.” In addition, and as part of the scheme, at BLAND’s direction DAWKINS and SOOD paid or facilitated the payment of an additional $9,000 directly to the families of two student-athletes at University-5. In return, BLAND facilitated a meeting between DAWKINS and SOOD and a relative of a player currently attending University-5 (“Player-9”) for the purpose of pressuring Player-9 to retain DAWKINS and SOOD.
The Company-1 Scheme
In addition to the Coach Bribery Scheme described above, the investigation further revealed a second, related scheme. In the second scheme, JAMES GATTO, a/k/a “Jim,” a high-level executive at Company-1, and MERL CODE, an individual affiliated with Company-1 and its high school and college basketball programs, conspired to pay high school basketball players or their families for commitments by those players to attend and play for aCompany-1-sponsored university, and to sign with Company-1 upon turning professional. In addition, DAWKINS, SOOD, and JONATHAN BRAD AUGUSTINE brokered and facilitated the corrupt payments in exchange for a promise that the players also would retain the services of DAWKINS and SOOD upon turning professional.
Specifically, in or around 2017, GATTO, CODE, DAWKINS, AUGUSTINE, and SOOD agreed to pay bribes to at least three high school basketball players or their families in the following manner:
Allegations Involving Player-10 and University-6
First, GATTO, CODE, DAWKINS, and SOOD worked together to funnel $100,000 from Company-1 to the family of a high school basketball player (“Player-10”) in exchange for Player-10’s commitment to play at an NCAA Division I university whose athletic programs are sponsored by Company-1 (“University-6”), and in further exchange for a commitment from Player-10 to retain DAWKINS and SOOD, and to sign with Company-1, once Player-10 joined the NBA. DAWKINS told CW-1 and others on a recorded conversation that he did so at the request of a coach at University-6 (“Coach-2”), and call records show that GATTO spoke directly with Coach-2 multiple times in the days before Player-10 publicly committed to attending University-6.
Moreover, because the payments to the family of Player-10 were both in violation of NCAA rules and illegal, they were disguised by GATTO, CODE, DAWKINS, and SOOD using fake purchase orders, invoices and related documents to make them appear to be payments from Company-1 to CODE’s company. As CODE explained to DAWKINS, while such payments are sometimes made “off the books,” for this particular payment, GATTO and CODE had identified it to Company-1 as “as a payment to my team, to my organization, so it’s on the books, [but] it’s not on the books for what it’s actually for.” Indeed, the money, once allocated by Company-1, was funneled back to DAWKINS to use to pay the father of Player-10 in cash.
Allegations Involving Player-11 and University-6
Second, DAWKINS and AUGUSTINE agreed to facilitate payments to the family of another high school basketball player (“Player-11”) in exchange for Player-11’s commitment to play at University-6 and ultimately to retain DAWKINS’s services. While these payments were not directly funded by Company-1, they were made to benefit Company-1, which, as noted, sponsors University-6, and with the expectation that Company-1 would provide additional funding to AUGUSTINE in return. AUGUSTINE noted, “all [Coach-2] has to do is pick up the phone and call somebody [and say] these are my guys, they’re taking care of us.”
Because these payments from DAWKINS to Player-11’s family were both in violation of NCAA rules and illegal, AUGUSTINE suggested that the “easiest way” for DAWKINS to provide money for Player-11 and his family would be to send the money to AUGUSTINE’s “non-profit for the grassroots team,” although AUGUSTINE confirmed that he also would accept cash.
As DAWKINS subsequently explained to UC-2 in the context of providing such money to AUGUSTINE and others, “obviously some of it can’t be completely accounted for on paper because some of it is, whatever you want to call it, illegal.”
Allegations Involving Player-12 and University-7
Third, GATTO, CODE, DAWKINS, and AUGUSTINE agreed to make payments of as much as $150,000 from Company-1 to another high school basketball player (“Player-12”) in order to secure Player-12’s commitment to play at an NCAA Division I university whose athletic programs are also sponsored by Company-1 (“University-7”). Because Player-12 played for an amateur team run by AUGUSTINE and sponsored by Company-1, AUGUSTINE, with the assistance of CODE and DAWKINS, attempted to broker the deal to secure Player-12’s commitment to attend University-7 rather than a school sponsored by a rival athletic apparel company. In exchange for the payment, Player-12 similarly was expected to commit to retaining DAWKINS’s services and signing with Company-1 once Player-12 joined the NBA.
Much as with the payments to Player-10 described above, according to intercepted calls, GATTO stated that the payments from Company-1 to Player-12 were allegedly requested specifically by a coach at University-7 (“Coach-3”), who allegedly called GATTO directly and who, according to DAWKINS, CODE, and AUGUSTINE, “knows everything” and, in particular, “knows something’s gotta happen for” Player-12 to commit to attending University-7.
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Defendant
Age
Hometown
Charges (Potential Maximum Term of Imprisonment)
Chuck Connors Person
53
Auburn, AL
Bribery conspiracy, Solicitation of bribes, Honest services fraud conspiracy, Honest services fraud, Wire fraud conspiracy; Travel Act conspiracy (80 years)
Rashan Michel
43
Smyrna, GA
Bribery conspiracy, Solicitation of bribes, Honest services fraud conspiracy, Honest services fraud,
Wire fraud conspiracy; Travel Act conspiracy (80 years)
Lamont Evans
40
Stillwater, OK
Bribery conspiracy, Solicitation of bribes, Honest services fraud conspiracy, Honest services fraud,
Conspiracy to commit wire fraud; Travel Act conspiracy (80 years)
Emanuel Richardson, a/k/a “Book”
44
Tucson, AZ
Bribery conspiracy, Solicitation of bribes, Honest services fraud conspiracy, Honest services fraud,
Conspiracy to commit wire fraud; Travel Act conspiracy (80 years)
Anthony Bland, a/k/a “Tony”
37
Los Angeles, CA
Bribery conspiracy, Solicitation of bribes, Honest services fraud conspiracy, Honest services fraud,
Conspiracy to commit wire fraud; Travel Act conspiracy (80 years)
Christian Dawkins
24
Atlanta, GA
Bribery conspiracy, Payments of bribes, Honest services fraud conspiracy, Honest services fraud (3 counts), Wire fraud conspiracy (2 counts), Wire fraud (2 counts), Travel Act conspiracy, Money laundering conspiracy (200 years)
Munish Sood
45
Trenton, NJ
Bribery conspiracy, Payments of bribes, Honest services fraud conspiracy, Honest services fraud (3 counts), Wire fraud conspiracy (2 counts), Wire fraud (2 counts), Travel Act conspiracy, Money laundering conspiracy (200 years)
James Gatto, a/k/a “Jim”
47
Wilsonville, OR
Wire fraud conspiracy, Wire fraud (2 counts), Money laundering conspiracy (80 years)
Merl Code
43
Greer, SC
Wire fraud conspiracy, Wire fraud (2 counts), Money laundering conspiracy (80 years)
Jonathan Brad Augustine
32
Winter Garden, FL
Wire fraud conspiracy, Wire fraud (2 counts), Money laundering conspiracy (80 years)
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendants will be determined by a judge.
Mr. Kim praised the work of the FBI and the Criminal Investigators of the United States Attorney’s Office for the Southern District of New York.
Anyone with information relevant to the investigation is asked to contact the FBI at the special phone number established to receive such information, (212) 384-2135.
The case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Robert Boone, Russell Capone, Edward B. Diskant, and Noah Solowiejczyk are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the texts of the Complaints and the descriptions of the Complaints set forth below constitute only allegations and every fact described should be treated as an allegation.
Two Men Charged in Bribery Scheme Related to Korean Base RelocationRead the Press Release
A former contracting officer for the U.S. Army Corps of Engineers (USACE), Far East District (FED) and a former officer in the Korean Ministry of Defense (MOD) were indicted for their roles in a scheme to direct over $400 million in Department of Defense (DOD) construction contracts to a large multinational corporation based in the Republic of Korea in exchange for over $3 million in bribes.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; Director Frank Robey, Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command (CID); and Assistant Director Stephen E. Richardson of the FBI's Criminal Investigative Division made the announcement.
Former FED contracting officer Duane Nishiie, 58, of Honolulu, and former Korean MOD officer Seung-Ju Lee, 50, of Seoul, Korea, were charged in a nine-count indictment with mail and wire conspiracy, bribery, wire fraud, and conspiracy to commit money laundering. Nishiie was also charged with three counts of making a false statement.
According to the indictment, from 2008 through 2012, Nishiie and Lee solicited bribes from a large Korean engineering and construction company in exchange for Nishiie’s official actions to direct to the company certain contracts relating to the relocation and expansion of Camp Humphreys, a large military installation in Korea. The indictment further alleges that during this time, Nishiie, Lee and others used foreign bank accounts to hide the bribes accepted by Nishiie.
The indictment alleges that in late 2008, Nishiie took official action to steer a contract, valued at over $400 million, involving land development, utilities and infrastructure for the expansion of Camp Humphreys to the Korean company. Nishiie is also alleged to have used his official position in 2009 and 2010 to influence the award of a contract for construction of a project management office at Camp Humphreys, valued at over $6 million to the same Korean company.
In exchange for these actions, the indictment alleges, Nishiie and Lee received over $3 million in cash and other payments. Nishiie concealed these payments by using bank accounts held in the names of Lee and other Korean nationals.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
U.S. Army CID, FBI and the Defense Criminal Investigative Service conducted the investigation. Trial Attorneys Richard B. Evans and Peter M. Nothstein of the Criminal Division’s Public Integrity Section are prosecuting the case.
Staten Island Man Admits Trafficking over $2.5 Million in Counterfeit Footwear Through Port of NewarkRead the Press Release
NEWARK, N.J. – A Staten Island, New York, man today admitted his plan to distribute more than $2.5 million of counterfeit UGG-brand boots that were shipped into the Port of Newark, Acting U.S. Attorney William E. Fitzpatrick announced.
Shi Wei Zheng, 42, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with one count of trafficking in counterfeit goods. Zheng was originally arrested and charged by complaint on March 7, 2017.
According to documents filed in this case and statements made in court:
From September 2016 through February 2017, Zheng received certain shipping container numbers from an individual overseas that identified at least three containers containing counterfeit UGG boots. Cheng asked individuals working at the Port of Newark to remove the containers from the port before they could be examined by U.S. Customs and Border Protection. Once the containers were removed, Zheng directed that they be delivered to other individuals working for him, who would then distribute the boots in New Jersey and elsewhere.
However, before Zheng could distribute the goods, law enforcement intercepted the containers, examined their contents, and determined the boots were counterfeit. At no time was Zheng authorized to import authentic or counterfeit UGG merchandise.
In total, Zheng trafficked in over 15,000 pairs of counterfeit UGG boots, with a total estimated retail value of over $2.5 million. Zheng also paid individuals over $50,000 in exchange for the delivery of the containers.
The trafficking in counterfeit goods charge carries a maximum potential penalty of 10 years in prison and a $2 million fine. Zheng will be sentenced on Jan. 23, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents of U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations (HSI), under the direction of
Acting Special Agent in Charge Debra Parker in Newark, with the investigation leading to Zheng’s guilty plea.The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Scott B Tulman Esq., New York
Statement of Acting United States Attorney Joon H. Kim on the Decision of the Court of Appeals in U.S. v. Dean Skelos and Adam SkelosRead the Press Release
“The Second Circuit, while finding that the evidence was more than sufficient to convict Dean and Adam Skelos, held that a part of the jury instruction is no longer good law under the Supreme Court decision in McDonnell. While we are disappointed in the decision and will weigh our appellate options, we look forward to a prompt retrial where we will have another opportunity to present the overwhelming evidence of Dean Skelos and Adam Skelos’s guilt and again give the public the justice it deserves. Cleaning up corruption is never easy, and that is certainly true for corruption in New York State government. But we are as committed as ever to doing everything we can to keep our government honest. That is what we will do in this prosecution as well.”
St. Mary Parish man pleads guilty to shirking sex offender registration requirementsRead the Press Release
LAFAYETTE, La. – Acting U.S. Attorney Alexander C. Van Hook announced that a St. Mary Parish man pleaded guilty last week to moving to Texas without updating his sex offender registration.
Forrest Tucker, 54, of Morgan City, La., pleaded guilty Friday before U.S. Magistrate Judge Carol Whitehurst to one count of failure to register as a sex offender. The plea will become final when accepted by U.S. District Judge Dee D. Drell. According to the guilty plea, Tucker was convicted of a felony on April 17, 2008 that required him to register as a sex offender. After he served seven years in prison, St. Mary Parish Sheriff’s officers checked his address after his release in 2014, and Tucker was found absent from his Morgan City residence. A warrant was issued for his arrest, and U.S. Marshals arrested Tucker on May 4, 2017 in a hotel in San Antonio, Texas.
Tucker faces up to 10 years in prison, three years of supervised release and a $250,000 fine. The court set sentencing for November 30, 2017.
The U.S. Marshals Service and the St. Mary Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Joseph T. Mickel is prosecuting the case.
St. Joseph Man Charged with Possessing Meth to Distribute after High-Speed Chase in PlattsburgRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced today that a St. Joseph, Mo., man has been charged with possessing methamphetamine to distribute following a high-speed pursuit that resulted in his arrest and the seizure of more than two kilograms of methamphetamine.
James Patrick Pardee, II, 27, of St. Joseph, was charged in a complaint filed in the U.S. District Court in Kansas City, Mo., on Monday, Sept. 25, 2017. Pardee remains in federal custody pending a detention hearing on Wednesday, Sept. 27, 2017.
According to an affidavit filed in support of the federal criminal complaint, Plattsburg, Mo., police officers attempted to conduct a traffic stop for a lane violation on a black Audi A4 driven by Pardee on Saturday, Sept. 23, 2017. Pardee fled from officers at speeds exceeding 100 miles per hour for approximately nine miles, the affidavit says, until his vehicle crashed into a guardrail.
Pardee and a female passenger got out of the vehicle; Pardee was arrested and the female passenger escaped. Officers found a backpack inside the vehicle that contained numerous clear plastic baggies with a total of more than two kilograms of methamphetamine. Investigators later determined that he had recently sold approximately one kilogram of methamphetamine, the affidavit says.
Larson cautioned that the charge contained in this complaint is simply an accusations and not evidence of guilt.This case is being prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the Drug Enforcement Administration, the Plattsburg, Mo., Police Department, the Clinton County, Mo., Sheriff’s Department and the Buchanan County, Mo., Sheriff’s Department.
Sierra Vista Man Sentenced to 10 Years for Attempted Transportation of a Minor with Intent to Engage in Criminal Sexual ActivityRead the Press Release
TUCSON, Ariz. – Yesterday, Matthew Demond Lyons, 23, of Sierra Vista, Ariz., was sentenced by U.S. District Judge Rosemary Marquez to 10 years' imprisonment to be followed by 20 years of supervised release. Lyons previously pleaded guilty to attempted transportation of a minor with intent to engage in prostitution or any criminal sexual activity, aiding and abetting. He will be required to register as a sex offender and abide by sex offender terms as part of his supervision once released from prison.
In January 2016, Lyons attempted via electronic communications to induce a 16-year-old girl to travel to Arizona from Minnesota. Lyons instructed the minor to send him nude photographs of herself and to refer to him as “daddy” and stated that he would provide her with food, drugs, and shelter. Lyons also purchased a bus ticket so she could travel to Arizona. She boarded the bus in Minnesota and was enroute to Arizona before law enforcement located her.
The investigation in this case was conducted by the Federal Bureau of Investigation, Sierra Vista Police Department, Eden Prairie Police Department (Eden Prairie, Minnesota), and the Cochise County Attorney’s Office. The prosecution was handled by Raquel Arellano and Karen Rolley, Assistant U.S. Attorneys, District of Arizona, Tucson
CASE NUMBER: CR- 17-00160-TUC-RM
RELEASE NUMBER: 2017-094_Lyons
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Schenectady Man Sentenced for Crack Cocaine DistributionRead the Press Release
ALBANY, NEW YORK – Nicholas “Netti” Khan, age 24, of Schenectady, New York, was sentenced today to 92 months in prison for distributing crack cocaine.
The announcement was made by Acting United States Attorney Grant C. Jaquith and Special Agent in Charge James J. Hunt, New York Division, U.S. Drug Enforcement Administration (DEA).
In July 2016, following a three-day trial, a jury in Binghamton convicted Khan of distributing crack cocaine on four occasions in Schenectady from July to September 2013.
Khan is serving a term of imprisonment of 25 years to life in state prison for a 2014 murder conviction. The 92-month federal sentence issued today will begin after Khan is finished serving the murder sentence.
Senior United States District Judge Thomas J. McAvoy also imposed a 4-year term of supervised release, to begin after Khan’s release from prison.
This case was investigated by the DEA and the Colonie Police Department, and was prosecuted by Assistant United States Attorney Emmet O’Hanlon.
Rosebud Man Charged with Domestic Assault by an Habitual OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rosebud, South Dakota, man has been indicted by a federal grand jury for Domestic Assault by an Habitual Offender.
Calvin Gillette, age 26, was indicted on September 12, 2017. He appeared before U.S. Magistrate Judge Mark A. Moreno on September 19, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Gillette is accused of assaulting his domestic partner on January 31, 2017, when at the time of the assault, Gillette had a final conviction on at least two separate prior occasions in Rosebud Sioux Tribal Court proceedings for offenses that would have been, if subject to federal jurisdiction, an assault against a domestic partner.
The charge is merely an accusation and Gillette is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Daniel Nelson is prosecuting the case.
Gillette was released on bond pending trial. A trial date has not been set.
Rhode Island Tax Return Preparer Indicted for Filing False Tax ReturnsRead the Press Release
BOSTON – A Rhode Island tax return preparer was indicted today by a federal grand jury in Providence, R.I., on charges of preparing and filing fraudulent tax returns in the names of his clients.
Raymond P. Petrarca, 63, of West Warwick was charged with 44 counts of preparing false federal income tax returns.
According to the indictment, Petrarca owned and operated Stratus Financial Group, a tax preparation business located in Warwick. From at least 2011 through 2015, Petrarca allegedly prepared and filed falsified federal tax returns in his clients’ names by adding false and inflated deductions for home mortgage interest and charitable donations, as well as false and inflated credits for purported home energy improvements.
The charging statute provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. Sentences for federal crimes are imposed by a federal district judge based on the U.S. Sentencing Guidelines and other sentencing factors.
Acting United States Attorney for the District of Massachusetts William D. Weinreb; Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Victor A. Wild of Weinreb’s Economic Crimes Unit and Trial Attorney Kimberly G. Ang of the Justice Department’s Tax Division are prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Rhode Island Tax Return Preparer Indicted for Allegedly Filing Fraudulent Tax ReturnsRead the Press Release
A federal grand jury in Providence, Rhode Island returned an indictment today charging a West Warwick, Rhone Island tax return preparer with 44 counts of filing fraudulent tax returns for clients, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney for the District of Massachusetts William D. Weinreb.
According to the indictment, Raymond P. Petrarca owned and operated Stratus Financial Group, a tax preparation business located in Warwick. For at least tax years 2010 through 2015, Petrarca allegedly falsified his clients’ tax returns, seeking refunds from the Internal Revenue Service (IRS) to which his clients were not entitled. Petrarca allegedly included false and inflated deductions for home mortgage interest and charitable donations, as well as false and inflated credits for purported home energy improvements.
If convicted, Petrarca faces a statutory maximum sentence of three years in prison for each count, as well as a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Weinreb thanked special agents of the IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Victor A. Wild and Trial Attorney Kimberly G. Ang of the Tax Division, who are prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.