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14 July 2017
Indianapolis man sentenced in federal court for heroin and gun chargesRead the Press Release
Defendant had three prior drug charges on his criminal history
PRESS RELEASE
Indianapolis –United States Attorney Josh J. Minkler announced today that an Indianapolis man was sentenced in federal court on drug and weapon charges. Brant Chaszar, 35, was sentenced to 262 months (over 21 years) imprisonment by U.S. District Judge Tanya Walton Pratt after pleading guilty to possession with intent to distribute heroin and carrying a firearm in relation to a drug trafficking crime.
“Trafficking in heroin not only brings gun violence to a community, it contributes to the opioid crisis our country faces,” said Minkler. “Helping to reduce crime in our neighborhoods, is, and will remain a top priority of this office.”
In June 2015, law enforcement officials learned that Chaszar was dealing fentanyl-laced heroin in Indianapolis. They obtained a search warrant for his residence on the near Southside of Indianapolis. As officers approached Chaszar’s residence, he ran from agents and threw a loaded 40-caliber handgun he was carrying to the ground. He was apprehended and found to be in possession of fentanyl-laced heroin.
When agents served a search warrant on his home, they located ammunition, marijuana and additional heroin.
Chaszar has three narcotic-related prior convictions on his record. Because he is a convicted felon, he is not legally permitted to carry a firearm.
This investigation was jointly conducted by the Drug Enforcement Administration the Indianapolis Metropolitan Police Department and the United Drug Task Force of Hendricks County.
“Drug dealers profit from the weakness of addiction and leave a trail of sadness by introducing synthetic opioids such as fentanyl into our communities,” said Assistant Special Agent in Charge of the Indianapolis Drug Enforcement Administration, Greg Westfall. “DEA is committed to the safety of our neighborhoods by bringing drug dealers to justice.”
According to Assistant United States Attorney Barry Glickman who prosecuted this case for the government, Chaszar must serve six years of supervised release following his sentence.
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Husband and Wife Sentenced for Wire and Mail Fraud ConspiracyRead the Press Release
KNOXVILLE, Tenn. – On July 14, 2017, Christy A. Greider, 40, and Jason A. Greider, 42, both of Huber Heights, Ohio, were sentenced by the Honorable Pamela L. Reeves, U.S. District Court Judge, for their roles in a conspiracy to commit mail and wire fraud. Christy Greider will serve 33 months in federal prison and Jason Greider will serve 27 months.
The Greiders both pleaded guilty in February 2017 to one count of conspiracy to commit mail and wire fraud. Christy Greider worked as the bookkeeper for M-3 Construction, Inc., located in Oak Ridge, Tennessee. She also helped the company’s elderly owners keep track of their personal finances. Christy and Jason Greider made unauthorized purchases totaling more than $350,000 using the company’s and its elderly owners’ personal credit cards. Some of these unauthorized purchases included a boat, pool, furniture, and a trip to Hawaii.
Agencies involved in this investigation included the Oak Ridge Police Department and Federal Bureau of Investigation. Assistant U.S. Attorney Kelly A. Norris represented the United States.
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Former Teacher Sentenced to 27 Years for Child Pornography, Child Sex Tourism ChargesRead the Press Release
Acting United States Attorney Steve Butler of the Southern District of Alabama announced that Clarence Edward Evers, Jr., also known as Bud Evers, 54, of Evergreen, Alabama, was sentenced today to 27 years in prison. Evers pled guilty in April to charges that he produced child pornography, possessed child pornography, and traveled in foreign commerce with the intent to engage in illicit sexual conduct.
Evers was also sentenced to be supervised by the United States Probation Office for the rest of his life, and will be required to register as a sex offender. The Court also ordered that Evers pay $50,000 in restitution and a fine of $5,000.00.
Evers, previously employed as a technology teacher at Hillcrest High School in Conecuh County, admitted in documents filed as part of his guilty plea that he traveled each summer to Thailand, where he paid minor boys as young as thirteen to engage in illicit sexual conduct and that he took sexually explicit photographs of boys. One of the victims, then a 15-year old boy, made a report about being paid approximately $22 by Evers to engage in sex acts with him, and witnessing Evers engage in sex acts with another boy. Evers was identified through Facebook communications he had with the boy, and a search warrant was executed at Evers’s home in Evergreen on April 1, 2015. A substantial amount of child pornography, including videos and photographs of boys engaged in sexually explicit conduct, was recovered from Evers’s home. Although Evers had encrypted many of his electronic devices, the unencrypted data showed that Evers had accessed, downloaded, and produced child pornography. Evidence collected during the investigation also showed that, for years, Evers had discussed and coordinated his travel to and within Thailand with other men interested in engaging in commercial sex acts with boys in that country.
Acting United States Attorney Butler said, “Predators who exploit children will be aggressively investigated, pursued, and prosecuted, wherever they are. I commend the hard work and dedication of the many agents, analysts, support personnel, and lawyers from Mobile to New Orleans to Evergreen to Washington to Bangkok who sought justice for these victims. The Department of Justice remains steadfast in its commitment to protect children everywhere from criminals who would exploit them for their own gratification.”
“HSI will tirelessly work to investigate and bring to justice anyone who thinks they can get away with preying upon our children for their own sexual gratification” said Raymond R. Parmer, Jr. “This case highlights the exceptional commitment and devotion of the men and women who pursue the perpetrators of these depraved crimes every day.” Parmer is the Special Agent in Charge of the New Orleans field office with responsibility for Alabama, Arkansas, Louisiana, Mississippi, and Tennessee.
The case was investigated by the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and prosecuted by Assistant United States Attorneys Sean P. Costello and Maria E. Murphy, and Trial Attorney Jessica Urban of the Department of Justice’s Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Substantial additional investigation and analysis were provided by CEOS’s High Technology Investigative Unit.
This investigation was a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former Suzuki Employee Pleads Guilty to Submitting False Report to the EPARead the Press Release
Wayne Powell, a former employee of American Suzuki Motor Corporation headquartered in Brea, California, pleaded guilty today in a federal court in Detroit, Michigan, to violating the Clean Air Act by submitting a false end-of-year report to the U.S. Environmental Protection Agency, the Justice Department announced.
According to the plea agreement, Powell, a Government Relations Analyst for Suzuki, was responsible for submitting documents to the EPA regarding Suzuki’s compliance with motorcycle emission standards. Powell was in charge of submitting Suzuki’s 2012 application to the EPA for a “certificate of conformity,” which allows a vehicle manufacturer to sell vehicles in the United States. Rather than seek certification of each motorcycle engine family, Suzuki combined the certifications of multiple engine families and averaged their emission standards based on the total number of motorcycles in each family. At the end of the model year, Suzuki was required to submit to the EPA an end-of-year report to show that it was in compliance with emission standards.
The average that Powell created combined emissions of hydrocarbons and nitrogen oxides for the 23,528 Class III model year 2012 motorcycles that Suzuki imported, distributed and sold in the U.S. The average violated the emission limit. The first end-of-year report Powell submitted to the EPA in 2013 purported to utilize “banked credits” to offset the excess emissions. However, Suzuki had not participated in the banked credit program and therefore had no credits to use. As a result, the EPA informed Powell it could not accept the report. Subsequently, on March 28, 2014, Powell submitted an amended end-of-year report to the EPA’s Office of Transportation and Air Quality in Ann Arbor in which he altered the numbers of four motorcycle engine families, resulting in a calculation that was within the emission limit. The altered numbers were false. Powell also deceitfully represented to the EPA in the email that accompanied the amended report that “[t]he computer software that we use to gather this information did not count all of the units” and that he had “corrected some mistakes on the 2012 report.”
Powell faces a statutory maximum penalty of two years in prison and a fine of up to $250,000.
Acting Assistant Attorney General Jeffrey H. Wood and Acting U.S. Attorney Daniel L. Lemisch thanked the U.S. Environmental Protection Agency’s Criminal Investigation Division, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the U.S. Postal Inspection Service for their work in this investigation. The case is being prosecuted by Senior Counsel Kris Dighe of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Craig Weier of the U.S. Attorney’s Office for the Eastern District of Michigan.
Former SunTrust Bank Employee Pleads Guilty to Embezzling Nearly $600,000Read the Press Release
Ocala, Florida – Acting United States Attorney W. Stephen Muldrow announces that Connie Moorman Willis (52, Morriston) today pleaded guilty to one count of mail fraud, one count of aggravated identity theft, two counts of embezzlement by a bank employee, and one count of access device (credit card) fraud. She faces a maximum penalty of 20 years in prison for the mail fraud count, up to of 30 years’ imprisonment for each embezzlement count, up to 10 years’ imprisonment for the credit card fraud count, and 2 consecutive years in federal prison for the aggravated identity theft count. A sentencing date has not yet been set.
According to the plea agreement, Willis worked at SunTrust Bank as a business banker overseeing valuable business accounts, with wide-ranging authority over them. Beginning in February 2013, she stole the identities of two customers by using their personal information to create a fraudulent bank account. She had all written correspondence for this account mailed to her address in order to keep the customers from learning of her activities. Willis subsequently transferred large amounts of money from other customers, without their permission, into this fraudulent account. She then withdrew the stolen funds or used them to pay her own expenses.
Willis’s victims included customers who were elderly or in poor health. In one instance, investigators learned that Willis had opened two fraudulent credit card accounts and had taken out a $140,000 mortgage in the name of an elderly relative. She used stolen funds to pay off the mortgage and to make payments on the credit cards.
Once Willis’s fraud had been discovered, she texted one customer and admitted that she had “made a big mistake.” She added that she wanted to “make it right” by repaying the customer. In total, Willis stole $591,545.33.
This case was investigated by the United States Postal Inspection Service and the City of Ocala Police Department. It is being prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
Former Sheriff’s Deputy Indicted for Solicitation to Tamper with a WitnessRead the Press Release
Memphis, TN - A former Shelby County Sheriff’s Office deputy has been indicted for soliciting a person to murder a witness in a federal case. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the superseding indictment today.
Jeremy Drewery, 42, of Arlington, Tennessee, was indicted last September for attempting to extort thousands of dollars from an alleged drug dealer in August of 2016. In March, additional charges were added to the indictment, which alleged an incident of extortion of another alleged drug dealer in late 2013.
The Shelby County Sheriff’s Office has since received information that Drewery solicited a person to kill one of the witnesses in the earlier indictment and notified the FBI.
Drewery was assigned to the Shelby County’s Sheriff’s Office’s Narcotics Task Force, but has since been terminated from the department.
On Thursday, July 13, 2017, Drewery had his initial appearance in federal court before U.S. Magistrate Judge Charmiane G. Claxton.
Drewery is charged with two counts of Hobbs Act Extortion; two counts of Receipt of a Bribe by a Government Agent; and one count of Solicitation to Commit a Crime of Violence.
If convicted, he faces up to 20 years in federal prison and a fine of up to $250,000.
This case is being investigated by the Tarnished Badge Task Force, which is comprised of investigators from the FBI, Memphis Police Department and the Shelby County Sheriff’s Office.
Assistant U.S. Attorneys Reagan M. Taylor and Mark Erskine are prosecuting this case on the government’s behalf.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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Former FBI Agent Enters Guilty Plea in Federal Court in GeorgiaRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Kenneth W. Hillman, III, age 47, formerly of Dalton, Georgia, has entered a guilty plea in federal court in Rome, Georgia, to disclosure of confidential information, a violation of 18 U.S.C. § 1905. United States Magistrate Judge Walter Johnson, of Rome, presided over the guilty plea hearing and will provide United States District Judge Harold L. Murphy with a recommendation about accepting the plea. If he accepts the plea, Judge Murphy will impose sentence after he has reviewed the presentence report, which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that between August 1, 2012 and November 30, 2012, the Department of Justice Federal Bureau of Investigations (FBI) employed Kenneth W. Hillman, III, as a Special Agent in the Northern District of Georgia. Mr. Hillman was assigned as the lead agent of the Northwest Georgia Internet Crime and Child Exploitation Task Force (Task Force). This Task Force included other officers assigned from local law enforcement agencies.
The Task Force was authorized to investigate and solicit, via the internet, persons seeking to have sexual relations with children. This Task Force used an undercover facility along with undercover computers, government cell phones and specialized internet chat language designed by and known only to the Task Force members to solicit and lure these individuals to the area where they were arrested.
During this period, neither E. R. nor A. R. were law enforcement officers or members of the Task Force. Mr. Hillman disclosed sensitive, but unclassified, information as to the operation of this Task Force to E. R. and A. R. This disclosure included allowing E. R., on one occasion, and A. R. to view agents involved in the internet chatting with some individuals and allowing them to accompany agents during the arrests of some of these individuals.
Mr. Hillman also allowed A. R. access to a sensitive, but unclassified, undercover FBI computer and the specialized internet chat language used by the Task Force. Mr. Hillman allowed A. R., using the FBI’s undercover computer and the specialized language, to conduct several chats with persons on behalf of the Task Force. A. R. recruited several individuals who were looking to engage sexually with minor children to the area. These persons were arrested.
Mr. Hillman was not authorized by law to divulge, disclose or make known in any manner the Task Force operation to E. R. and/or A. R., or to allow A. R. to participate in the undercover operation of the Task Force, to possess and operate FBI equipment, to conduct chats, arrests, or otherwise be involved in the operation of the Task Force.
Ms. Drake stated the maximum penalty for this offense is imprisonment for 1 year and/or a fine of $100,000.
The case was investigated by agents of the United States Department of Justice, Office of the Inspector General. Assistant United States Attorneys William K. Witherspoon and James H. May of the Columbia office are prosecuting the case.
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Former D.C. Government Employee Pleads Guilty to Accepting Bribes in Scheme Involving PermitsRead the Press Release
WASHINGTON – Stacie M. Williams, .a former employee of the District of Columbia Department of Consumer and Regulatory Affairs (DCRA), pled guilty today to a federal bribery charge stemming from a scheme in which she accepted cash in return for facilitating the issuance of construction permits.
The guilty plea was announced by U.S. Attorney Channing D. Phillips, Andrew Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Daniel W. Lucas, Inspector General for the District of Columbia.
Williams, 47, of Washington, D.C., pled guilty in the U.S. District Court for the District of Columbia to a charge of receipt of a bribe by a public official. The charge carries a statutory maximum of 15 years in prison and potential financial penalties. Under federal sentencing guidelines, Williams faces a likely range of 12 to 18 months in prison and possible financial penalties. She is to be sentenced on Oct. 19, 2017, by the Honorable Amit P. Mehta.
According to the government’s evidence, Williams worked from March 2004 until August 2016 as a contact representative in DCRA’s Business License Department. She was responsible for reviewing and processing applications for various permits. In two meetings at her workstation in April and June of 2012, Williams accepted a total of $700 in cash from a person who was actually participating in an undercover FBI investigation. In exchange for this money, Williams issued two air conditioning permits and one construction permit. In processing these permits, she did not require the person to take a number and wait in line at DCRA, which is the practice for all customers. She also falsified the requirement calling for the signature of a certified licensed tradesman who would oversee the construction. Instead, she inserted the name of a master licensed tradesman who she knew was not involved in the construction work.
In her plea today, Williams admitted that she often partnered with a co-worker, Lucretia B. Barksdale, in the illegal scheme of issuing DCRA permits to customers. Barksdale, 52, of Oxon Hill, Md. pled guilty to a federal bribery charge in March 2016 and later was sentenced to three years of probation, including 180 days that was to be spent in home detention.
In announcing the plea, U.S. Attorney Phillips, Assistant Director in Charge Vale, and Inspector General Lucas commended the work of those who investigated the case from the FBI’s Washington Field Office and the District of Columbia Office of the Inspector General. They also expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Christopher Toms and former Assistant U.S. Attorneys Lionel André. Finally, they commended the work of Assistant U.S. Attorney Michelle N. Bradford, who is prosecuting the case.
Former Compton Deputy Treasurer Admits $3.7 Million EmbezzlementRead the Press Release
SANTA ANA, California – The former deputy treasurer for the City of Compton pleaded guilty yesterday to federal charges stemming from his theft of more than $3.7 million of city funds.
Salvador Galvan, 47, of La Mirada, pleaded guilty to one count of theft from an organization receiving federal funds, a felony offense that carries a statutory maximum sentence of 10 years in federal prison.
Galvan pleaded guilty before United States District Judge Josephine L. Staton, who scheduled a sentencing hearing for November 3, 2017.
When he pleaded guilty, Galvan admitted that he stole $3,721,924 from the City of Compton from May 2010 through December 2016
Galvan, who worked in the Compton Treasurer’s Office for more than 20 years, was responsible for tallying the cash received by the city as payment for parking tickets, business licenses and other fees. After the cash was counted, Galvan prepared the money for deposit into a city bank account.
According to court documents, Galvan skimmed cash from the daily receipts on numerous occasions, sometimes taking as much $8,000 per day.
Galvan has agreed to forfeit to the government the remaining proceeds of his embezzlement, which includes cash and cars purchased with the stolen money. He has also agreed to pay restitution to the City of Compton as ordered by Judge Staton.
In conjunction with Galvan’s guilty plea, his wife – Rosa Maria Galvan – was charged with money laundering related to the embezzled funds. She pleaded guilty to that charge yesterday as well and will also be sentenced on November 3, 2017.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Daniel O’Brien, Deputy Chief of the Public Corruption and Civil Rights Section. Assistant United States Attorney Jonathan Galatzan of the Asset Forfeiture Section is assisting in the case.
Former CWA Local President Sentenced to One Year and a Day in Prison for Stealing from UnionRead the Press Release
BIRMINGHAM – A federal judge on Thursday sentenced the former president of the Communications Workers of America, Local 3901, in Oxford, Ala., to one year and a day in prison for embezzling from the organization, announced Acting U.S. Attorney Robert O. Posey and U.S. Department of Labor, Office of Labor-Management Standards, Investigator Hollis Lindley Jr.
U.S. District Court Judge Virginia Emerson Hopkins sentenced MICHAEL LACKEY, 44, of Bremen, Ga., on five counts of bank fraud and one count of embezzlement and theft of union funds. Lackey pleaded guilty to the charges in January. The judge ordered Lackey to repay $69,193 to the local and to forfeit that same amount to the government as proceeds of illegal activity. He must report to prison Sept. 11.
Local 3901 members elected Lackey president in October 2008 and he remained in that position until October 2014. As president, Lackey exercised control over the local’s finances, including its accounts at Wells Fargo and Regions banks.
According to his guilty plea, Lackey executed a scheme to defraud the banks and Local 3901 between February 2010 and October 2014 by using his position as Local 3901 president and acting treasurer to conduct unauthorized transactions to take money from the CWA local’s bank accounts and use it for his personal benefit. Those transactions included writing checks to himself from Local 3901 accounts for unauthorized or nonexistent travel expenses, using debit cards he obtained on accounts for the local at both Regions and Wells Fargo for personal expenses, and making cash withdrawals from Local 3901 accounts at both banks for his personal use.
Lackey attempted to conceal his theft by failing to maintain records of his unauthorized transactions and by failing to seek approval for expenditures, as required by federal law and the Local 3901 constitution and bylaws.
Local 3901 members began to suspect in summer 2014 that Lackey had stolen money from the union when a union check bounced. About the same time, Lackey told a national CWA AFL-CIO representative that he had taken out a personal loan using the union’s bank accounts and assets as collateral, and had failed to make the loan payments, leading the bank to collect from the union’s finances, according to court documents.
The U.S. Department of Labor, Office of Labor-Management Standards, investigated the case, which Assistant U.S. Attorney Xavier O. Carter Sr. prosecuted.
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Florida Return Preparers Plead Guilty to Using Stolen IDs to File Fraudulent Tax ReturnsRead the Press Release
Two Broward County, Florida tax return preparers pleaded guilty today to conspiring to file and filing fraudulent tax returns with the Internal Revenue Service (IRS), announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida.
According to documents filed with the court, Luczor Fertilien, 39, and David Joseph, 37, owned two tax preparation businesses in Lauderhill, Florida: Imperial Taxation and Multi-Services Corp. and Aleluya Universal Accounting Services Inc. From approximately 2010 through 2016, Fertilien and Joseph filed fraudulent returns for their clients seeking refunds to which the clients were not entitled, by reporting fictitious business income, fraudulent education and fuel tax credits and claiming deceased individuals, whose identities were stolen, as dependents. They also filed returns in the names of individuals whose identities had been stolen. Fertilien and Joseph did not report the illegal proceeds they received from this scheme on their personal tax returns and each admitted to causing a tax loss of more than $550,000.
Sentencing is scheduled for Sept. 22 before U.S. District Court Judge William P. Dimitrouleas. Fertilien and Joseph face a statutory maximum sentence of five years in prison on the conspiracy count and a maximum sentence of three years in prison on the false return count. The defendants also face a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Greenberg thanked 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 Neil Karadbil and Assistant Chief Greg Tortella of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Florida Return Preparers Plead Guilty to Using Stolen Ids to File Fraudulent Tax ReturnsRead the Press Release
Two Broward County, Florida tax return preparers pleaded guilty today to conspiring to file and filing fraudulent tax returns with the Internal Revenue Service (IRS), announced Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to documents filed with the court, Luczor Fertilien, 39, and David Joseph, 37, owned two tax preparation businesses in Lauderhill, Florida: Imperial Taxation and Multi-Services Corp. and Aleluya Universal Accounting Services Inc. From approximately 2010 through 2016, Fertilien and Joseph filed fraudulent returns for their clients seeking refunds to which the clients were not entitled, by reporting fictitious business income, fraudulent education and fuel tax credits and claiming deceased individuals, whose identities were stolen, as dependents. They also filed returns in the names of individuals whose identities had been stolen. Fertilien and Joseph did not report the illegal proceeds they received from this scheme on their personal tax returns and each admitted to causing a tax loss of more than $550,000.
Sentencing is scheduled for Sept. 22 before U.S. District Court Judge William P. Dimitrouleas. Fertilien and Joseph face a statutory maximum sentence of five years in prison on the conspiracy count and a maximum sentence of three years in prison on the false return count. The defendants also face a period of supervised release, restitution and monetary penalties.
Acting U.S. Attorney Greenberg and Acting Deputy Assistant Attorney General Goldberg thanked 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 Neil Karadbil and Assistant Chief Greg Tortella of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
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.
Felon in Possession of Firearm Sentenced to 180 Months in Federal PrisonRead the Press Release
Jackson, TN – Caricus Hendrix, 30, was sentenced to 180 months in federal prison for being a felon in possession of a firearm. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the sentence today.
According to information presented in court, on August 8, 2016, investigators with the Jackson Police Department (JPD) observed a vehicle parked in the parking lot of Pandora’s Box blocking the flow of traffic. When investigators approached the vehicle, Hendrix admitted that he had an open container of alcohol and that a firearm was in the center console of the vehicle.
A search of Hendrix revealed "Molly" or ethylone. The firearm, a Smith and Wesson 9mm pistol, was found to be stolen out of Murfreesboro, Tennessee.
On July 12, 2017, the Honorable J. Daniel Breen sentenced Hendrix, who had three prior serious drug offense convictions, as an Armed Career Offender to 15 years’ confinement and a total of 3 years supervised release to begin after his incarceration.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Jackson Police Department and the U.S. Attorney’s Office, who have all worked jointly to address gun-related crimes through aggressive investigation and prosecution. Assistant U.S. Attorney Taylor Eskridge prosecuted this case on the government’s behalf.
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Dominican National Charged with Illegal Reentry After DeportationRead the Press Release
BOSTON - A Dominican national was charged yesterday in federal court in Boston with a federal immigration crime.
Julio Ernesto Gomez, 46, was charged with illegally reentering the United States after being deported.
According to the indictment, Gomez was deported in February 2004. On Jun 16, 2017, federal agents in Boston encountered Gomez and found him to be illegally present in the United States.
Gomez faces a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 and will be subject to deportation upon completion of his sentence. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. Assistant U.S. Attorney Kenneth G. Shine of Weinreb’s Major Crimes Unit is 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.
Doctor Pleads Guilty in Multi-Million Dollar Health Care Fraud and Money Laundering Scheme Involving Sober Homes and Alcohol and Drug Addiction Treatment CentersRead the Press Release
A doctor pled guilty for his participation in a multi-million dollar health care fraud and money laundering scheme that involved the filing of fraudulent insurance claim forms and defrauded health care benefit programs.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida; George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI); Dave Aronberg, State Attorney, Palm Beach County State Attorney’s Office; Jeff Atwater, Florida Chief Financial Officer; William D. Snyder, Sheriff, Martin County Sheriff's Office; George L. Dorsett, Assistant Inspector General for Investigations, Amtrak Office of Inspector General; Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG); Isabel Colon, Regional Director, United States Department of Labor, Employee Benefits Security Administration (DOL-EBSA); Dennis Russo, Director of Operations, National Insurance Crime Bureau (NICB); Ric Bradshaw, Sheriff, Palm Beach County Sheriff's Office (PBSO); Bryan Kummerlen, Chief, West Palm Beach Police Department; Jeffrey S. Goldman, Chief, Delray Beach Police Department; Pam Bondi, Florida Attorney General; and Scott Rezendes, Special Agent in Charge, Office of Personnel Management, Office of Inspector General (OPM-OIG); made the announcement.
Joaquin Mendez, 52, of Miramar, pled guilty to one count of conspiracy to commit health care fraud, in violation of Title 18, United States Code, Section 1347; all in violation of Title 18, United States Code, Section 1349.
Co-defendants Kenneth Chatman, Fransesia Davis, and Michael Bonds established sober homes which were purportedly in the business of providing safe and drug-free residences for individuals suffering from drug and alcohol addiction. To obtain residents for the sober homes, members of the conspiracy provided kickbacks and bribes, in the form of free or reduced rent and other benefits, to individuals with insurance who agreed to reside at the sober homes, attend drug treatment, and submit to regular drug testing that members of the conspiracy could bill to the residents’ insurance plans. Although the sober homes were purportedly drug-free residences, some of the defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing.
The co-defendants referred the sober homes’ residents who had insurance to treatment centers that purportedly offered clinical treatment services for persons suffering from alcohol and drug addiction. Defendant Chatman hired doctors, including defendant Mendez, to serve as medical directors of his treatment centers. As medical director, Mendez was purportedly responsible for evaluating patients and prescribing medically necessary treatment and testing. Instead of Mendez using his medical expertise and his individual assessments of patients to decide what type of laboratory testing was needed by each patient, co-defendant Chatman dictated the type and frequency of different types of lab testing that would be performed based upon the kickbacks and bribes that he was receiving from different clinical laboratories. Mendez facilitated this testing by signing doctor’s orders for urine drug tests and certificates of medical necessity for saliva drug tests, although Mendez had never seen some of the patients. Mendez knew that insurance claims for the medically unnecessary tests that he prescribed would be submitted to the patients’ insurance companies. When he examined treatment center patients, Mendez billed those patients’ insurance plans using procedure codes that reflected more complex and lengthier examinations than Mendez actually performed.
Mendez faces a maximum of ten years’ imprisonment. Sentencing is scheduled for September 27, 2017 at 10:00 a.m.
Mr. Greenberg commended the investigative efforts of the Greater Palm Beach Health Care Fraud Task Force. Agencies of the task force include the FBI, IRS-CI, the Palm Beach County State Attorney's Office Sober Homes Task Force, Florida Division of Investigative and Forensic Services, Martin County Sheriff's Office, Amtrak OIG, DOL-OIG, DOL-EBSA, National Insurance Crime Bureau, Palm Beach County Sheriff's Office, West Palm Beach Police Department, Delray Beach Police Department, Florida Attorney General Office of Statewide Prosecution, and OPM-OIG. The cases are being prosecuted by Assistant United States Attorney A. Marie Villafaña.
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.
District Man Sentenced to Nine Years in Prison for Pair of Carjackings in Northwest WashingtonRead the Press Release
WASHINGTON – Travon Carter, 18, of Washington, D.C., has been sentenced to nine years in prison for a pair of carjackings he committed last year in Northwest Washington, U.S. Attorney Channing D. Phillips announced today.
Carter pled guilty in April 2017, in the Superior Court of the District of Columbia, to two counts of carjacking and two related firearms offenses. He was sentenced on July 13, 2017, by the Honorable Ronna L. Beck. Following his prison term, he will be placed on three years of supervised release.
According to a proffer of facts submitted at the time of the plea, the first carjacking took place on Oct. 4, 2016, at about 4 a.m. Carter, along with three other individuals, approached a man in the 900 block of Quackenbos Street NW. The victim reported that all four assailants were wearing masks and armed with firearms. At least one of them knocked the victim to the ground. The group stole the victim’s car keys, cellular telephone, and wallet and took off in the victim’s car. The vehicle was found several hours later in the 700 block of Fairmont Street NW.
The second carjacking took place on Oct. 6, 2016, at about 12:45 a.m., this time in the 1200 block of Sheridan Street NW. Carter and two other individuals approached a woman who had just parked her car. One of Carter’s accomplices was wearing a mask and armed with a firearm. The three demanded the victim’s cellular telephone and car keys and left in her car. They hid the vehicle in a parking lot in the 2500 block of Sherman Avenue NW and then got into another vehicle, driven by a fourth person. Officers with the Metropolitan Police Department (MPD) stopped the vehicle within 90 minutes of the carjacking and arrested all four men.
Carter has been in custody since his arrest.
In announcing the sentence, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department. He also expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Sarah McClellan, Chief of the Victim/Witness Assistance Unit; Diana Lim, Karina Hernandez, LaJune Thames, M. Laverne Perry, and Katina Adams-Washington, all of the Victim/Witness Assistance Unit; Litigation Technology Specialists Anisha Bhatia, Jeanie Latimore-Brown, Kimberly Smith, and Paul Howell, and former Litigation Technology Specialist Aneela Bhatia;
Finally, he commended the work of Assistant U.S. Attorneys Michael J. Romano and Gregory Rosen, who investigated and prosecuted the matter.
District Man Sentenced to More Than Nine Years in Prison for Robbery and Burglary ChargesRead the Press Release
WASHINGTON – Robert Lewis, 21, of Washington, D.C., was sentenced today to nine years and three months in prison on charges stemming from an armed robbery and two burglaries in Northwest Washington, U.S. Attorney Channing D. Phillips announced.
Lewis pled guilty in March 2017, in the Superior Court of the District of Columbia, to robbery, second-degree burglary, and contempt. The plea, which was contingent upon the Court’s approval, called for an agreed-upon sentence of five years in prison. The Honorable Kimberley S. Knowles accepted the plea today and sentenced Lewis accordingly.
In a separate case, also in March of 2017, a jury found Lewis guilty of second-degree burglary and second-degree theft, with a finding that the crimes were committed while Lewis was on pretrial release. In that case, the Honorable Juliet McKenna sentenced Lewis today to four years and three months in prison, to run consecutively to the other prison term.
Following completion of his prison terms, Lewis will be placed on three years of supervised release.
In the guilty plea, Lewis admitted taking part in an armed robbery on the afternoon of June 24, 2016, in the 600 block of Buchanan Street NW; a co-defendant, Donathan Taylor, 20, pled guilty to an armed robbery charge for that offense. Lewis also admitted to committing a residential burglary during the daytime hours of Oct. 16, 2015 in the 700 block of Taylor Street NW. Finally, Lewis pled guilty to a contempt charge for leaving a halfway house, where he was being held while awaiting trial, without authorization on June 22, 2016.
The guilty verdict stemmed from a burglary on April 9, 2015 at a home in the unit block of Gallatin Street NW.
In announcing the sentences, U.S. Attorney Phillips commended the work of those who investigated the cases from the Metropolitan Police Department (MPD). He also expressed appreciation for the assistance provided by the Latent Fingerprint Unit of the Forensic Science Laboratory of the District of Columbia Department of Forensic Sciences.
Finally, he acknowledged the efforts of those who worked on the cases from the U.S. Attorney’s Office involving Lewis and his co-defendant. They include Assistant U.S. Attorneys Michael J. Romano, Kamil E. Shields and C.B. Buente, and former Assistant U.S. Attorney Alyssa Kociuruba.
District Man Sentenced to 9 1/2-Year Prison Term for Sexually Assaulting 12-Year-Old BoyRead the Press Release
WASHINGTON – A 37-year-old man was sentenced today to a 9½-year prison term for sexually abusing a 12-year-old boy, U.S. Attorney Channing D. Phillips announced.
The man, of Washington, D.C., is not identified here to protect the privacy of the victim. He pled guilty in May 2017, in the Superior Court of the District of Columbia, to first-degree child sexual abuse. The plea, which was subject to the Court’s approval, called for a 9½-year prison term. The Honorable Zoe Bush accepted the plea today and sentenced the defendant accordingly. Upon completion of his prison term, the man will be placed on five years of supervised release. He also will be required to register as a sex offender for a period of 10 years.
According to the government’s evidence, between late Sept. 30, 2016 and early Oct. 1, 2016, the defendant anally raped his son’s 12-year-old friend, who was at their residence in Southeast Washington for a sleepover. The victim disclosed the assault and an investigation led to the man’s arrest.
In announcing the sentence, U.S. Attorney Phillips commended those who investigated the case from the Metropolitan Police Department (MPD). He also expressed appreciation for the work of the Children’s Advocacy Center, Children’s National Medical Center, and the District of Columbia Department of Forensic Sciences. Finally, he acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Lezlie Richardson, Forensic Interviewer Tracy Owusu, Paralegal Specialist D’Yvonne Key, and Assistant U.S. Attorneys Elana Suttenberg and Marisa West, who investigated and prosecuted the case.
Dexter Man Sentenced to 33 Months for Drug ConspiracyRead the Press Release
Bangor, Maine: Acting United States Attorney Richard W. Murphy announced that Donald Vigue, 42, of Dexter, Maine, was sentenced today in U.S. District Court by Judge Jon D. Levy to 33 months in prison and three years of supervised release for conspiring to distribute and possess with the intent to distribute oxycodone and cocaine.
According to court records, for several years between 2002 and 2014, Vigue conspired with Roger Belanger, Mark Tasker, and others to acquire oxycodone and cocaine in Rhode Island and distribute it in the Dexter area. Vigue is the 11th person to be sentenced in the case. On August 19, 2016, Belanger and his daughter, Kelli Mujo, were convicted of conspiracy and related charges following a jury trial.
The case was investigated by the U.S. Drug Enforcement Administration and the Maine Drug Enforcement Agency, with assistance provided by the Dexter Police Department and the Penobscot and Somerset County Sheriffs’ Offices.
Department of Justice Seeks to Recover over $100 Million Obtained from Corruption in the Nigerian Oil IndustryRead the Press Release
The Department of Justice announced today the filing of a civil complaint seeking the forfeiture and recovery of approximately $144 million in assets that are allegedly the proceeds of foreign corruption offenses and were laundered in and through the U.S. Acting Assistant Attorney General Kenneth A. Blanco, Assistant Director in Charge Andrew W. Vale of the FBI’s Washington Field Office, Assistant Director Stephen E. Richardson of the FBI’s Criminal Investigative Division, and Chief Don Fort of the IRS Criminal Investigation (IRS-CI) made the announcement.
According to the complaint, from 2011 to 2015, Nigerian businessmen Kolawole Akanni Aluko and Olajide Omokore conspired with others to pay bribes to Nigeria’s former Minister for Petroleum Resources, Diezani Alison-Madueke, who oversaw Nigeria’s state-owned oil company. In return for these improper benefits, Alison-Madueke used her influence to steer lucrative oil contracts to companies owned by Aluko and Omokore. The complaint alleges that the proceeds of those illicitly awarded contracts were then laundered in and through the U.S. and used to purchase various assets subject to seizure and forfeiture, including a $50 million condominium located in one of Manhattan’s most expensive buildings – 157 W. 57th Street – and the Galactica Star, an $80 million yacht.
“The United States is not a safe haven for the proceeds of corruption,” said Acting Assistant Attorney General Blanco. “The complaint announced today demonstrates the Department’s commitment to working with our law enforcement partners around the globe to trace and recover the proceeds of corruption, no matter the source. Corrupt foreign officials and business executives should make no mistake: if illicit funds are within the reach of the United States, we will seek to forfeit them and to return them to the victims from whom they were stolen.”
“Business executives who engage in bribery and illegal pay-offs in order to obtain contracts create an uneven marketplace where honest competitor companies are put at a disadvantage,” said Assistant Director Vale. “Along with the Department of Justice, international law enforcement partners and other U.S. federal agencies, the FBI is committed to pursuing all those who attempt to advance their businesses through corrupt practices.”
“Today’s announcement would not have been possible without the remarkable work conducted by a group of dedicated investigators, attorneys and international partners who were committed to leaving no stone unturned in this case targeting international corruption,” said Assistant Director Richardson. “This case demonstrates that the FBI will not tolerate American institutions and property being used to launder proceeds of foreign corruption and today’s filing is an important step towards recovering identified funds. This should serve as a warning to other corrupt foreign officials that the United States is not open for their business.”
“Today’s actions are the direct result of our agents following the money and unmasking corruption and greed,” said Chief Fort. “Working with our law enforcement partners, IRS-CI will continue to investigate and unravel these complex financial transactions.”
The government alleges that Aluko, Omokore and others funded a lavish lifestyle for Alison-Madueke. According to the allegations, they conspired to purchase millions of dollars in real estate in and around London for Alison-Madueke and her family members, then renovated and furnished these homes with millions of dollars in furniture, artwork and other luxury items purchased at two Houston-area furniture stores at Alison-Madueke’s direction. In return, the government alleges Alison-Madueke used her influence to direct a subsidiary of the Nigerian National Petroleum Corporation to award Strategic Alliance Agreements (SAAs) to two shell companies created by Aluko and Omokore: Atlantic Energy Drilling Concepts Nigeria Ltd. and Atlantic Energy Brass Development Ltd. (the Atlantic Companies). Under the SAAs, the Atlantic Companies were required to finance the exploration and production operations of eight on-shore oil and gas blocks. In return for financing these operations, the companies expected to receive a portion of the oil and gas produced. However, according to the complaint, the Atlantic Companies provided only a fraction of the agreed upon financing or, in some instances, failed entirely to provide it. The companies also failed to meet other obligations under the SAAs, including the payment of $120 million entry fee. Nevertheless, according to the allegations, the companies were permitted to lift and sell more than $1.5 billion worth of Nigerian crude oil. The government contends the Atlantic Companies then used a series of shell companies and intermediaries to launder a portion of the total proceeds of these arrangements into and through the U.S.
A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards judgment in favor of the U.S.
The FBI’s International Corruption Squads in Washington, D.C. and Los Angeles and the IRS-CI are investigating the case. Trial Attorneys Stephen A. Gibbons and Michael W. Khoo of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case. The Criminal Division’s Office of International Affairs is providing substantial assistance.
This case was brought under the Kleptocracy Asset Recovery Initiative. This initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.
In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the U.S. should contact federal law enforcement or send an email to [email protected] or https://tips.fbi.gov/.\
Dallas Man Sentenced to 230 Months in Federal Prison for Role in Cocaine ConspiracyRead the Press Release
DALLAS — A Dallas man who admitted to his role in a cocaine conspiracy was sentenced yesterday to a lengthy federal prison sentence, announced U.S. Attorney John Parker of the Northern District of Texas.
Corey Nelson, 40, was sentenced by U.S. District Judge Jane J. Boyle to 230 months in federal prison following his guilty plea in September 2016 to one count of conspiracy to possess with intent to distribute a schedule II controlled substance. Nelson has been in custody since mid-July 2015 following a law enforcement operation, led by the Federal Bureau of Investigation, the Dallas Police Department and Internal Revenue Service Criminal Investigation, in which numerous defendants were arrested on drug distribution conspiracy and related charges outlined in a federal superseding indictment returned by a federal grand jury in Dallas in June 2015.
According to documents filed in the case, from January 1, 2012 through June 23, 2015, Nelson engaged in a conspiracy to possess with intent to distribute five kilograms or more of a mixture or substance containing a detectable amount of cocaine. Nelson purchased multiple kilograms of cocaine and would resell the cocaine he purchased to other individuals involved in the conspiracy.
At yesterday’s sentencing hearing, Judge Boyle held Nelson responsible for 120 kilograms of cocaine.
At the time of Nelson’s arrest a firearm and $12,963 in United States Currency were seized.
The FBI, Dallas Police Department and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments.
Assistant U.S. Attorney George Leal prosecuted.
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Cranston Business Owner Sentenced on Drug Trafficking, Firearm ChargesRead the Press Release
PROVIDENCE – Bassam K. Naiefeh, 48, of Cranston, owner of AAA Gas Mart in Cranston, was sentenced today to 12 months and 1 day in federal prison for conspiracy to possess and distribute oxycodone, and for being a felon in possession of a firearm, announced Acting United States Attorney Stephen G. Dambruch and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration’s New England Field Division.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Naiefeh to serve 3 years supervised release and to perform 300 hours of community service upon completion of his prison sentence. Naiefeh pleaded guilty on March 22, 2017, to one count of conspiracy to distribute and possess with the intent to distribute oxycodone, and one count of being a felon in possession of a firearm.
The U.S. Sentencing Guidelines range of imprisonment in this matter is 41-51 months. The government recommended the court impose a sentence of 41 months in prison.
According to information presented to the court, between April and November 2016 , DEA Drug Task Force undercover agents made 8 controlled purchases of oxycodone from Naiefeh and a co-conspirator acting at his direction. In total, DEA agents purchased 560 oxycodone tablets.
On November 14, 2016, DEA agents and other members of law enforcement executed a court authorized search of Naiefeh’s business and seized additional narcotics and a .32 caliber revolver. Naiefeh was arrested.
According to court records, Naiefeh was previously convicted in Rhode Island state court of a crime punishable by a term of imprisonment exceeding one year.
The case was prosecuted by Assistant U.S. Attorney Dulce Donovan.
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Colorado Man Sentenced to Prison for Conspiring to File Fraudulent Tax Refund ClaimsRead the Press Release
WASHINGTON – A Loveland, Colorado businessman, who owned a delicatessen franchise in Fort Collins, Colorado, was sentenced to serve 24 months in prison today for conspiring to file fraudulent claims for tax refunds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Bob Troyer for the District of Colorado.
According to documents filed with the court, Daryl Brent Giesking, conspired with his return preparer, Teresa Marty, the owner of Advanced Financial Services (AFS), a Placerville, California tax return preparation business, to claim fraudulent refunds. With Marty’s help, Giesking filed three individual tax returns claiming more than $1 million in refunds based on falsely reported income tax withholdings. As a result, the Internal Revenue Service (IRS) paid out a $350,765 fraudulent refund to Giesking. Within months of receiving the refund, Giesking spent the funds on precious metals and coins, a truck, jewelry, luxury travel and sporting equipment. After discovering the refund should not have been paid, the IRS levied Giesking’s bank accounts and recovered approximately $40,503. Following the IRS’s levies, Giesking took steps to liquidate a number of his assets to include selling the truck he bought with the fraudulent proceeds and withdrawing all of the funds in his retirement account. He then relocated to Ecuador, where he was arrested in June 2016, on a warrant issued in this case.
In addition to the term of prison imposed, Giesking was ordered to serve three years of supervised release and to pay restitution to the IRS in the amount of $310,261.58. He was remanded into custody.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Troyer commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Erin S. Mellen and Assistant U.S. Attorney Kenneth M. Harmon, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Colorado Man Sentenced to Prison for Conspiring to File Fraudulent Tax Refund ClaimsRead the Press Release
A Loveland, Colorado businessman, who owned a delicatessen franchise in Fort Collins, Colorado, was sentenced to serve 24 months in prison today for conspiring to file fraudulent claims for tax refunds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Bob Troyer for the District of Colorado.
According to documents filed with the court, Daryl Brent Giesking, conspired with his return preparer, Teresa Marty, the owner of Advanced Financial Services (AFS), a Placerville, California tax return preparation business, to claim fraudulent refunds. With Marty’s help, Giesking filed three individual tax returns claiming more than $1 million in refunds based on falsely reported income tax withholdings. As a result, the Internal Revenue Service (IRS) paid out a $350,765 fraudulent refund to Giesking. Within months of receiving the refund, Giesking spent the funds on precious metals and coins, a truck, jewelry, luxury travel and sporting equipment. After discovering the refund should not have been paid, the IRS levied Giesking’s bank accounts and recovered approximately $40,503. Following the IRS’s levies, Giesking took steps to liquidate a number of his assets to include selling the truck he bought with the fraudulent proceeds and withdrawing all of the funds in his retirement account. He then relocated to Ecuador, where he was arrested in June 2016, on a warrant issued in this case.
In addition to the term of prison imposed, Giesking was ordered to serve three years of supervised release and to pay restitution to the IRS in the amount of $310,261.58. He was remanded into custody.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Troyer commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Erin S. Mellen and Assistant U.S. Attorney Kenneth M. Harmon, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Coal Company Pleads Guilty to Providing Advance Notice of MSHA Inspections Pays over $260,000 in Fines and PenaltiesRead the Press Release
Abingdon, VIRGINIA – A Kingsport, Tennessee, coal company pled guilty this week in the United States District Court in Abingdon to violating the Federal Mine Safety and Health Act by providing advance notice of safety inspections, Acting United States Attorney Rick A. Mountcastle announced.
Mill Branch Coal, LLC, pled guilty and was sentenced earlier this week to one count of providing advance notice of safety inspections.
Pursuant to the plea agreement, Mill Branch Coal, LLC, paid $260,538 to the United States Department of Labor for criminal fines and obligations, and resolution of civil citations, orders, and assessments. In addition, the company was placed on probation for a period of two years.
From January to June 2015, Mill Branch employees at the Dorchester mine in Wise County, Virginia, used an underground texting system to give employees advance notice that United States Mine Safety and Health Administration inspectors were on premises. The employees also gave advance notice when Mill Branch’s internal auditors and inspectors from the Virginia Department of Mines, Minerals and Energy were on premises.
When evidence of the activity was uncovered in June 2015, both the company and MSHA conducted investigations of the illegal activity by Mill Branch’s employees. The company terminated employees and took remedial action to prevent the activity from occurring in the future.
“MSHA believes that mine inspections should be conducted when mines are operating under actual working conditions. The Agency appreciates Mill Branch’s swift, remedial action to address this problem,” notes Patricia W. Silvey, deputy assistant secretary for MSHA.
The investigation of the case was conducted by the Norton Office of the Mine Safety and Health Administration. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Clinical Psychologist and Owner of Psychological Services Centers Sentenced to 264 Months for Roles in $25 Million Psychological Testing Scheme Carried out Through Eight Companies in Four StatesRead the Press Release
Two owners of psychological services companies, one of whom was a clinical psychologist, were sentenced yesterday for their involvement in a $25.2 million Medicare fraud scheme carried out through eight companies at nursing homes in four states in the Southeastern U.S.
The announcement was made by Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Duane A. Evans of the Eastern District of Louisiana, Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Regional Office.
Rodney Hesson, 47, of Slidell, Louisiana, and Gertrude Parker, 63 of Slidell, Louisiana, were sentenced on July 13, to 180 months’ imprisonment and 84 months’ imprisonment by U.S. District Court Judge Carl J. Barbier of the Eastern District of Louisiana. Judge Barbier also ordered Hesson to pay $13,800,553.57 in restitution, and ordered Parker to pay $7,313,379.75 in restitution. The defendants were each convicted of one count of conspiracy to commit health care fraud and one count of conspiracy to make false statements related to health care matters on January 24.
According to evidence presented at trial, Hesson and Parker’s companies, Nursing Home Psychological Services (NHPS) and Psychological Care Services (PCS), respectively, contracted with nursing homes in Alabama, Florida, Lousiana and Mississippi to allow NHPS and PCS clinical psychologists to provide psychological services to nursing home residents. Hesson and Parker caused these companies to bill Medicare for psychological testing services that these nursing home residents did not need or in some instances did not receive, the trial evidence showed. During trial, evidence was entered showing that between 2009 and 2015, NHPS and PCS submitted over $25.2 million in claims to Medicare, the vast majority of which were fraudulent, while Medicare paid more than $13.5 million on the fraudulent claims. The jury verdict included a money judgment of $8,956,278, as well as forfeiture of Hesson’s home and at least $525,629 in seized currency.
The case was investigated by the FBI and HHS-OIG, and brought by the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Louisiana. The case is being prosecuted by Senior Litigiation Counsel John Michelich and Trial Attorneys Katherine Raut and Katherine Payerle of the Fraud Section.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 3,000 defendants who collectively have billed the Medicare program for over $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Child Rapist Sentenced to Ten Years in Federal Prison for Possession of Child PornographyRead the Press Release
Spokane– Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that Larry Joseph Fraley, age 58, of Spokane, Washington, was sentenced after having previously pleaded guilty on April 13, 2017 to Possession of Child Pornography. Chief United States District Judge Thomas O. Rice sentenced Fraley to a ten-year term of imprisonment, to be followed by a twenty-year term of court supervision after he is released from Federal prison. In addition, Fraley agreed to forfeit to the United States the computer he used to possess child pornography images. Upon release from prison, Fraley will be required to register as a Sex Offender.
According to information disclosed during the court proceedings, at all times relevant to the investigation of this case Fraley was on supervision with the Washington State Department of Corrections (“DOC”) as a result of his 1991 conviction for First Degree Rape of a Child in King County Washington. On August 29, 2016, DOC officers were conducting a review of Fraley at a halfway house on Dean Ave. in Spokane. The officers observed Fraley looking at images on his computer of prepubescent boys engaged in sexual activity. DOC officer contacted the Federal Bureau of Investigation. The FBI interviewed Fraley and he admitted searching the internet for child pornography images of young boys. The FBI seized Fraley’s computer and forensically examined it. Forensic examination revealed Fraley had approximately 287 images of child pornography on his computer. The child pornography images included photographs of minors under the age of twelve years and involved material that portrayed sadistic or masochist images.
Joseph H. Harrington stated, “The sentence handed down in this case provides just punishment for this offense and I commend the excellent work of the law enforcement officers with the Washington State Department of Corrections and the FBI. Prosecuting offenders who possess child pornography is one of the priorities of the United States Attorney’s Office for the Eastern District of Washington. This Office will continue to prosecute aggressively and seek appropriate punishment for child pornography crimes.”
This case was pursued as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. The Project Safe Childhood Initiative (“PSC”) has five major components:
• Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue children;
• Participation of PSC partners in coordinated national initiatives;
• Increased federal enforcement in child pornography and enticement cases;
• Training of federal, state, and local law enforcement agents; and
• Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
This investigation was conducted by the Washington State Department of Corrections and the Federal Bureau of Investigations. The case was prosecuted by Stephanie J. Lister, an Assistant United States Attorney and PSC Coordinator for the Eastern District of Washington.
Cedar Rapids Man Pleads Guilty to Distribution of Child PornographyRead the Press Release
A man who distributed child pornography pled guilty today in federal court in Cedar Rapids.
Scott Ristine, age 40, from Cedar Rapids, Iowa, was convicted of one count of distribution of child pornography. At the plea hearing, Ristine admitted that, in 2015, he knowingly distributed child pornography. He also admitted that he was convicted of receipt of child pornography in the Northern District of Iowa in 2002.
Sentencing before United States District Court Judge Linda R. Reade will be set after a presentence report is prepared. Ristine remains in custody of the United States Marshal pending sentencing. Ristine faces a mandatory minimum sentence of 15 years’ imprisonment and a possible maximum sentence of 40 years’ imprisonment, a $250,000 fine, $5,100 in special assessments, and supervised release for 5 years to life following any imprisonment.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Cedar Rapids Police Department and the Iowa Division of Criminal Investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 17-37.
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Cameroonian National Sentenced for Marriage Fraud ConspiracyRead the Press Release
ALEXANDRIA, Va. – A Cameroonian national was sentenced today for her role in a marriage fraud conspiracy dubbed “Operation Evasive Immigration.”
According to court records and evidence presented at trial, Carine Kojia Aleah Epse Mbendeke, 27, of New Carrollton, Maryland, conspired with Landry Mbendeke, who is currently serving time in federal prison for leading this marriage fraud conspiracy. The evidence presented at trial showed that beginning in December 2013, and continuing through August 2015, the Mbendekes operated a marriage fraud ring that recruited United States citizens to marry Cameroonian nationals for the promise of $5,000. Carine Mbendeke traveled with United States citizen co-conspirators to Cameroon on two occasions. While in Cameroon, Carine Mbendeke orchestrated their fraudulent marriages, acted as a translator, and collected immigration-related documents.
The Mbendekes recruited, or attempted to recruit, approximately 18 United States citizens. Seven of their co-conspirators previously pleaded guilty for their participation in the fraudulent scheme, including Marcus Carlye Brooks, Benjamin Franklin Minkins, Jr., Kenneth Cornelius Lewis, Alecia Angelita Portillo, Keonna Lakata Lynch, James Settles III, and Latrell Turner.
Carine Mbendeke was sentenced to one year and one day in prison.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Richard Ingram, Special Agent in Charge of Diplomatic Security Service, U.S. Department of State’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorney Carina A. Cuellar and Special Assistant U.S. Attorney Michelle R. Pascucci are prosecuting the case
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-272.
Bahamian National Charged with Bringing Aliens into the United StatesRead the Press Release
On July 11, 2017, a Bahamian national was charged with bringing aliens into the United States at a place other than a designated port of entry.
Benjamin Greenberg, Acting United States Attorney for the Southern District of Florida, and Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), made the announcement.
Raymond Abdul Pritchard, 43, of the Bahamas, is charged by indictment with bringing aliens into the United States at a place other than a designated port of entry, in violation of Title 8, United States Code, Sections 1324(a)(1)(A)(i) and (B)(i), and with illegal reentry into the United States by an aggravated felon, in violation of Title 8, United States Code, Sections 1326(a) and (b)(2). The indictment also charges Andy Jackson Mitchell, 51, of Trinidad, Kelvin Everett Esteen, 66, of Jamaica, and Devon Rankin, a/k/a “Raylon Etheridge,” 48, of Jamaica, with illegal reentry into the United States, in violation of Title 8, United States Code, Sections 1326(a) and (b)(2).
According to the court docket, including a criminal complaint and indictment, on June 27, 2017, a Fort Lauderdale Police Marine Unit officer noticed a privately owned open fishing vessel coming in from the ocean that was unusually low in the water. The captain appeared to be having trouble steering the vessel. The Marine Unit officer attempted to pull over the vessel and the vessel sped off to the Sails Marina. Upon arriving at the marina, the vessel docked and individuals who had been aboard the vessel were apprehended, including Mitchell, Esteen and Rankin. Pritchard was determined to have been driving the vessel.
Pritchard is alleged to have brought Mitchell, Esteen and Rankin and an individual with the initials “D.A.J.,” into the United States, at a place other than as designated by the Secretary of Homeland Security, knowing that they were aliens. It is further alleged that Pritchard brought the aliens to the United States for financial gain.
Mr. Greenberg commends the investigative efforts of ICE-HSI and thanks the assistance of U.S. Customs and Border Protection. This case is being prosecuted by Assistant U.S. Attorney Jennifer Keene.
A criminal complaint and indictment merely contain accusations. A defendant is presumed innocent unless and until proven guilty 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.
Armed Drug Trafficker Convicted at TrialRead the Press Release
BATON ROUGE, LA – Acting United States Attorney Corey R. Amundson announced today that a federal jury has convicted QUINTON HALL, age 32, of Baton Rouge, Louisiana, of various drug trafficking crimes, and illegally possessing a firearm in connection with the crimes, based on the defendant’s efforts to distribute methamphetamine throughout Livingston, Louisiana, and Gonzales, Louisiana, in 2015. Earlier this afternoon, after a three-day trial, the jury unanimously returned guilty verdicts on all four counts presented at trial, namely, conspiracy to distribute and possess with the intent to distribute fifty grams or more of methamphetamine, attempted possession with the intent to distribute five grams or more of methamphetamine, distribution of fifty grams or more of methamphetamine, and possession of a firearm during and in relation to a drug trafficking crime.
As the evidence at trial demonstrated, HALL would obtain kilogram and multi-ounce quantities of methamphetamine from suppliers in Texas and California. Working with other individuals in Gonzales and Walker, Louisiana, HALL would distribute the methamphetamine to customers in Livingston and Ascension Parishes. During the conspiracy, for instance, in January of 2015, HALL caused a mail parcel containing more than 300 grams of methamphetamine to be mailed from California to an address in Walker, Louisiana, where HALL believed he would be able to pick up the parcel. On January 22, 2015, HALL attempted to possess more than five grams of methamphetamine, which he intended to distribute. Later, on August 19, 2015, HALL actually distributed fifty grams or more of methamphetamine. On that date, he was arrested and found to be in possession of a Smith & Wesson 9mm pistol, which HALL concealed in a compartment behind the stereo of his vehicle.
As a result of his convictions, HALL faces a lengthy federal prison sentence, including a mandatory minimum sentence of not less than 15 years in prison as a result of the conspiracy and firearms counts. HALL also faces significant fines and forfeiture. HALL is scheduled to be sentenced on November 9, 2017.
Acting U.S. Attorney Corey Amundson stated, “Today reaffirms, yet again, that armed drug traffickers will find no safe quarter in federal court. I applaud the thoughtful decisions of the unanimous jury, and the excellent work of the prosecutors and the federal, state, and local law enforcements agencies who all worked seamlessly together to bring this trafficker to justice. Our collective work to make our communities safer must and will continue with vigor.”
This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana, the United States Drug Enforcement Administration, the United States Postal Inspection Service, the Livingston Parish Sheriff’s Office, and the Ascension Parish Sheriff’s Office. The investigation received valuable assistance from the Louisiana State Police. This matter is being prosecuted by Assistant United States Attorneys Ryan Crosswell and J. Brady Casey.
Armed Career Criminal Sentenced to 15 Years for Being a Felon in Possession of a FirearmRead the Press Release
Jackson, TN – Preston Bryson, 40, was sentenced to 180 months in federal prison for being a felon in possession of a firearm. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the sentence today.
According to information presented in court, on September 1, 2016, members of the West Tennessee Violent Crimes and Drug Task Force, attempted to serve an outstanding parole violation warrant on Bryson in Humboldt, Tennessee, when Bryson fled on foot. Agents apprehended him a short distance away and found methamphetamine and cocaine near where Bryson fled.
Agents later located a North American Arms .22 caliber revolver in the same area after Bryson, in a recorded jail call, admitted that he had thrown a "strap" in the wood line while fleeing from agents.
On July 12, 2017, the Honorable J. Daniel Breen sentenced Bryson, who had three prior serious drug offense convictions, as an Armed Career Offender to 15 years’ confinement and a total of 5 years supervised release to begin after his incarceration.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the West Tennessee Violent Crimes and Drug Task Force; and the U.S. Attorney’s Office, who have all worked jointly to address gun-related crimes through aggressive investigation and prosecution.
Assistant U.S. Attorney Taylor Eskridge prosecuted this case on the government’s behalf.
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Albuquerque Woman Sentenced to Prison for Federal Bank Robbery ConvictionRead the Press Release
ALBUQUERQUE – Joleen Sedillo, 42, of Albuquerque, N.M., was sentenced this morning in federal court to 27 months in prison followed by three years of supervised release for her conviction on bank robbery charges.
Sedillo and co-defendants Abel Lopez, 31, and William Colbert, 38, both of Albuquerque, were arrested in July 2016, on a criminal complaint charging them with bank robbery charges. The criminal complaint alleges that Sedillo, Lopez and Colbert robbed Bank of the West branches located at 5401 Central Ave. NE and 7900 Wyoming Blvd. NE on June 22, 2016 and June 27, 2016, respectively, and attempted to rob the Bank of the West branch located at 5228 Central Ave. SW on July 14, 2016.
Sedillo, Lopez and Colbert were indicted on Aug. 10, 2016, and charged with conspiracy to commit bank robbery in June and July 2016; bank robbery on June 22, 2016 and June 27, 2016; and attempted bank robbery on July 14, 2016. According to the indictment, the three defendants committed the crimes in Bernalillo County, N.M.
On March 28, 2017, Sedillo pled guilty to conspiracy to commit bank robbery and to aiding and abetting an attempted bank robbery. In entering the guilty plea, Sedillo admitted driving Lopez and Colbert to the Bank of the West branches they planned to rob. Sedillo further admitted that on July 14, 2016, she drove her co-defendants away from a branch of Bank of the West branch that Colbert attempted to rob. She also admitted concealing the clothing Colbert wore during the attempted robbery.
On April 5, 2017, Colbert pled guilty to conspiracy to commit bank robbery and to aiding and abetting an attempted bank robbery. Under the terms of his plea agreement, Colbert will be sentenced within the range of 41 to 51 months in federal prison followed by a term of supervised release to be determined by the court. On April 7, 2017, Lopez pled guilty to conspiracy to commit bank robbery and to aiding and abetting an attempted bank robbery. Under the terms of his plea agreement, Lopez will be sentenced within the range of 27 to 33 months in federal prison followed by a term of supervised release to be determined by the court. Colbert and Lopez are currently scheduled for sentencing hearings on July 21, 2017
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department. Assistant U.S. Attorney Michael D. Murphy is prosecuting the case.
Acting Manhattan U.S. Attorney Settles Civil Fraud Lawsuit Against Narco Freedom, Joining Hands Management, and Devorah Haigler for Engaging in Schemes to Defraud MedicaidRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the United States has settled its claims brought under the False Claims Act against NARCO FREEDOM, INC. (“NARCO FREEDOM”), a former operator of outpatient chemical dependency clinics, and separately has settled its claims against JOINING HANDS MANAGEMENT INC. (“JOINING HANDS”), an operator of short-term residences known as “three-quarter houses,” and DEVORAH HAIGLER, co-owner of JOINING HANDS. The consent orders were approved yesterday by U.S. District Judge John G. Koeltl. Pursuant to the settlement, the three defendants admit and accept responsibility for conduct alleged in the Government’s complaint-in-intervention, the United States will receive a $50.5 million allowed claim in the Narco Freedom bankruptcy proceeding, and Joining Hands and Haigler will pay $300,000 to the United States and the State of New York, the federal portion of which is $141,180.
Acting U.S. Attorney Joon H. Kim said: “Narco Freedom not only defrauded Medicaid, it also victimized vulnerable low-income patients who were attempting to recover from drug and alcohol addictions. Particularly in light of the opioid epidemic ravaging our communities, we will act aggressively to stop such abusive conduct.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “This settlement puts an end to a greed-fueled scheme that callously compromised patient care and took advantage of an extremely vulnerable population. Health providers engaging in such behaviors should contemplate facing Narco Freedom’s fate – exclusion from all government health programs.”
The complaint-in-intervention filed by the United States alleged three separate fraud schemes. First, the complaint alleged that NARCO FREEDOM, JOINING HANDS, HAIGLER, and others were engaged in a kickback scheme, whereby NARCO FREEDOM made monthly cash payments to JOINING HANDS in exchange for HAIGLER and others referring residents of JOINING HANDS’ three-quarter houses, almost all of whom were Medicaid recipients, to NARCO FREEDOM outpatient programs and enforcing attendance at those programs, for which NARCO FREEDOM billed Medicaid. Second, the complaint alleged that NARCO FREEDOM and others were engaged in a kickback scheme whereby NARCO FREEDOM provided below-cost housing in its own three-quarter houses, known as “Freedom Houses,” to induce residents of those houses to enroll in and attend NARCO FREEDOM’s outpatient programs, and then evicted the residents as soon as NARCO FREEDOM had collected the maximum available Medicaid funds. Both schemes exploited vulnerable individuals who were forced to comply with NARCO FREEDOM’s rules because they lacked stable housing options. Third, the complaint alleged that NARCO FREEDOM and others directed and paid employees of its outpatient program in Red Hook, Brooklyn, to create false treatment records for certain patients and to backdate records.
As part of the NARCO FREEDOM settlement, NARCO FREEDOM, which is currently in Chapter 7 bankruptcy, has agreed (through the Chapter 7 Trustee) that the United States has a general unsecured claim for damages in the amount of $50,509,440, which will be paid through the bankruptcy proceeding on a pro rata basis with other general unsecured creditors. As additional terms of the settlement, NARCO FREEDOM will be excluded from all federal health care programs for 50 years, and the Chapter 7 Trustee will take steps to dissolve NARCO FREEDOM. NARCO FREEDOM, through the Chapter 7 Trustee, also has admitted, acknowledged, and accepted responsibility for the following conduct:
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Between 2006 and 2014, NARCO FREEDOM operated short-term residences known as “Freedom Houses.” As a condition of residence at the Freedom Houses, NARCO FREEDOM required residents to enroll in and attend a NARCO FREEDOM outpatient program. One purpose of the Freedom Houses was to induce Medicaid recipients to use NARCO FREEDOM’s outpatient programs by providing those individuals with subsidized housing.
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Between 2008 and 2011, NARCO FREEDOM made monthly payments to operators of three-quarter houses pursuant to purported “lease agreements” executed by NARCO FREEDOM, but these payments were not actually part of a legitimate lease arrangement, and instead were paid to incentivize the operators to require the residents of their houses to attend NARCO FREEDOM outpatient programs.
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In 2010, NARCO FREEDOM directed and paid counselors employed in its outpatient treatment programs in Red Hook, Brooklyn, to perform “corrective action and maintenance” on patient records, which included creating records reflecting that counselors had treated certain patients that the counselors had not in fact treated; claims based upon these false records were submitted to and paid by Medicaid.
NARCO FREEDOM’s conduct also was the subject of a lawsuit brought by this Office in October of 2014, United States v. Narco Freedom, Inc., 14 Civ. 8593 (JGK), in which the United States obtained a temporary restraining order and preliminary injunction enjoining NARCO FREEDOM from using the Freedom Houses to induce people to enroll in outpatient treatment programs. That suit ultimately resulted in the Court appointing a temporary receiver who oversaw the transition of NARCO FREEDOM’s clinics and Freedom Houses to other health care providers.
As part of the JOINING HANDS and HAIGLER settlement, they must pay a total of $300,000 to resolve the United States’ claims along with related claims asserted by the State of New York, of which the federal portion is $141,180. JOINING HANDS and HAIGLER also are enjoined from making or receiving payments of any kind in exchange for referrals or recommendations for any medical care or service, and from requiring residents to provide information relating to enrollment or attendance at an outpatient program.
JOINING HANDS and HAIGLER also admitted, acknowledged, and accepted responsibility for conduct alleged in the Government’s complaint, including the following:
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In 2008, JOINING HANDS and NARCO FREEDOM reached an agreement whereby NARCO FREEDOM would make monthly payments to JOINING HANDS and in exchange, JOINING HANDS would refer individuals residing in its three-quarter houses to NARCO FREEDOM outpatient programs.
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HAIGLER was aware of, and consented to, this agreement.
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Between 2008 and 2011, pursuant to this agreement and subsequent agreements, NARCO FREEDOM made monthly payments to JOINING HANDS, in amounts ranging from $4,000 to $15,000 per month, per house.
This case arose, in part, from a complaint filed under seal by whistleblowers under the False Claims Act.
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Mr. Kim thanked HHS-OIG for its investigative efforts and ongoing support and assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Kirti Vaidya Reddy and Cristine Irvin Phillips are in charge of the case.
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13 July 2017
Worcester Man Charged with Firearms OffensesRead the Press Release
BOSTON – A Worcester man was indicted today in federal court in Worcester on a federal firearms charge.
Steven Rivera, 24, was charged with being a felon in possession of ammunition. Rivera was arrested on June 29, 2017, as part of a coordinated federal and state sweep that resulted in the arrests of nine individuals who have been charged with firearms-related offenses.
According to court documents, Rivera – who has multiple prior felony convictions, including drug-related offenses – sold two handguns and numerous rounds of ammunition to a cooperating source in Worcester on Feb. 14, 2017. On Feb. 28, 2017, Rivera sold the cooperating source two more handguns and numerous rounds of ammunition, and during a recorded phone call, Rivera offered to sell the cooperating source heroin.
Eight others were arrested on state charges as part of an investigation into gun and narcotics trafficking in the Worcester area. During the course of the investigation, law enforcement purchased nine guns from nine defendants, including several handguns, two shotguns, and an assault rifle with a 100-round capacity drum magazine; multiple rounds of ammunition; and narcotics. Law enforcement seized several more guns during the June 29, 2017, sweep.
The charge of possessing ammunition after being convicted of a felony provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Worcester County District Attorney Joseph D. Early Jr.; and Worcester Police Chief Steven M. Sargent made the announcement today. Assistant U.S. Attorney William F. Abely of Weinreb’s Worcester Branch Office is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Woman Indicted on Medicaid Fraud and Identity Theft ChargesRead the Press Release
RICHMOND, Va. – As part of the largest ever health care fraud enforcement action in Department of Justice History, a Richmond woman has been charged with healthcare fraud, aggravated identity theft, and making a false statement to federal agents.
Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced today the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $1.3 billion in false billings. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.
Chermeca Harris, 36, was arrested on Tuesday and the indictment was unsealed. Harris, a Medicaid beneficiary, would misrepresent her health condition to health care providers, such as hospitals and ambulance services, in order to obtain health care benefits. Specifically, she would falsely represent that she was suffering from sickle cell anemia and was having a sickle cell crisis in order to obtain pain killing drugs, such as dilaudid, which she wanted to receive intravenously through the neck. In fact, doctors tested Harris in January 2016, and determined she did not have sickle cell anemia. The hospitals involved were Virginia Commonwealth University Medical Center, Chippenham, Bon Secours St. Mary’s, Memorial Regional, John Randolph Medical Center, and Henrico Doctor’s.
According to the indictment, it was a further part of the scheme that Harris also falsely represented her identity. On some occasions she used the name of M.M., and on other occasions she used the name of R.J.; both Medicaid recipients. She also falsely stated to investigating federal agents that her name was M.M. and that she had sickle cell anemia.
Harris has been charged with eight counts of healthcare fraud on the Medicaid program, two counts of aggravated identity theft, and one count of making a false statement to federal agents. She faces a mandatory minimum of four years in prison and a maximum penalty of 89 years in prison, if convicted. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; and Nick DiGiulio, Special Agent in Charge, Philadelphia Regional Office of Inspector General of Department of Health and Human Services, made the announcement after the arrest. Assistant U.S. Attorney David T. Maguire is prosecuting the case.
The charges announced today aggressively target schemes billing Medicare, Medicaid, and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 91 Americans die every day of an opioid related overdose.
Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:17-cr-77.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Waterbury Grocery Store Worker Sentenced to 30 Months in Prison for Food Stamp FraudRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that TALLAT MAHMOOD, 64, of Waterbury, was sentenced yesterday by U.S. District Judge Vanessa L. Bryant in Hartford to 30 months of imprisonment, followed by two years of supervised release, for defrauding the federal food stamp program.
The federal Supplemental Nutrition and Assistance Program (“SNAP”) is administered by the USDA’s Food and Nutrition Service and utilizes federal tax dollars to subsidize low-income households to provide them with the opportunity to achieve a more nutritious diet by increasing their food-purchasing power. SNAP recipients purchase eligible food items at retail food stores through the use of an Electronic Benefits Transfer (EBT) card, and SNAP benefits may be accepted by authorized retailers only in exchange for eligible items. Items such as alcoholic beverages, cigarettes, paper goods and soaps are not eligible for purchase with Food Stamp benefits, and it is a violation of the rules and regulations governing the food stamp program to allow benefits to be used to purchase ineligible items. SNAP benefits may not lawfully be exchanged for cash under any circumstances. The program is designed so that the total amount of each purchase is electronically transferred to the retailer’s designated bank account.
According to court documents, MAHMOOD worked at WB Trade Fair Grocery, located at 43 Willow Street in Waterbury. From November 2014 until June 2016, MAHMOOD and others illegally allowed customers to redeem their food stamp benefits for cash and other ineligible items.
Given the stock of eligible food items at the store, the number of registers and the customer amenities, it is estimated that WB Trade Fair Grocery could lawfully redeem at most between $120,000 to $240,000 per year in food stamp benefits. However, during this approximately 18-month period, food stamp redemptions at the store totaled approximately $3.2 million.
Judge Bryant ordered MAHMOOD to pay approximately $1.5 million in restitution.
MAHMOOD was arrested on August 18, 2016. On March 30, 2016, he pleaded guilty to one count of unlawful use of food stamp benefits and one count of conspiracy to commit food stamp fraud.
On April 7, 2017, Raul Carlos Monarca-Gonzalez, also an employee at WB Trade Fair Grocery, was sentenced to 30 months of imprisonment and restitution of approximately $1.5 million for his role in this scheme.
A third employee of the store who was involved in this scheme, Tahir Shahzad, also has pleaded guilty and is scheduled to be sentenced on July 31.
This matter was investigated by the U.S. Department of Agriculture, Office of Inspector General, and is being prosecuted by Assistant U.S. Attorneys Anastasia King and Neeraj Patel.
Washington Man Pleads Guilty to Defrauding Alaskans Out of Approximately $2.7 MillionRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Bryan Schroder announced that Floyd Jay Mann, Jr., 55, of Puyallup, Washington, pleaded guilty in Anchorage yesterday to all counts charged against him, to include 11 counts of wire fraud and 8 counts of money laundering, regarding a scheme to defraud Alaskans out of approximately $2.7 million. His wife, Cheryl Mann, 52, also of Puyallup, was convicted in Seattle on Friday, July 7, 2017, of one count of social security fraud.
According to Assistant U.S. Attorney Aunnie Steward, who prosecuted the case against Floyd Mann in the District of Alaska, Floyd Mann defrauded several Alaska residents of approximately $2.7 million by falsely leading the victims to believe that he was the recipient of a multimillion-dollar settlement from a class-action lawsuit with a pharmaceutical company. Mann told victims that if they helped to pay Mann’s medical bills and other lawsuit-related expenses, the victims would be paid back plus a substantial return on their money, but only after Mann’s multimillion-dollar settlement was released by the court. In fact, Mann did not use the victim’s money to pay medical bills. There was no lawsuit settlement, and Mann used the money he obtained from the victims to gamble at a casino, collecting over $1 million in jackpots while receiving need-based social security benefits.
According to Special Assistant U.S. Attorney Benjamin Diggs, who prosecuted the case against Floyd Mann’s wife, Cheryl Mann, in the Western District of Washington, during the course of Floyd Mann’s scheme, he and his wife Cheryl Mann and their son collected approximately $81,000 in need-based Supplemental Security Income benefits. Cheryl Mann was the designated payee for Floyd Mann and their son and responsible for reporting any changes in the household income or assets. During this time, Cheryl Mann won approximately $125,000 by gambling at a casino. That income, as well as the funds obtained by her husband, disqualified the Manns from the public assistance they received. At her sentencing on July 7, 2017, Cheryl Mann was ordered to pay $81,000 in restitution and serve three years of probation.
Floyd Mann is scheduled to be sentenced on Dec. 11, 2017, in Anchorage.
For Floyd Mann’s charges, the law provides for a maximum sentence of 20 years in prison and a $500,000 fine or both. Under federal sentencing statutes, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The IRS Criminal Investigations, FBI, and Social Security Office of Inspector General, conducted the investigation in this case.
Violent Felon Sentenced to 29 Years in Federal Prison for Running Drug Empire from Georgia State PrisonRead the Press Release
BRUNSWICK, GA - Daniel Roger Alo, 46, a Georgia penal resident, was sentenced earlier this week by U. S. District Court Judge Lisa Godbey Wood to 29 years in federal prison for his role in running a drug trafficking ring from a Georgia prison cell that operated throughout the Southeast.
According to evidence presented during the guilty plea, sentencing and other hearings, Alo, while serving a life sentence in the Georgia Department of Corrections for armed robbery, aggravated assault and kidnapping, formed a drug trafficking organization that trafficked in pounds of crystalized methamphetamine. Alo recruited members from inside and outside prison, including members of the Ghost Face Gangsters, Bloods and Gangster Disciple gangs. Alo and members of his conspiracy used drones and corrupt guards to smuggle phones and other contraband inside prison, which were used to facilitate drug trafficking activities. Members of the conspiracy distributed large quantities of crystal meth throughout the Southeast. Following a 2015 sting operation in Brunswick, Georgia, law enforcement agents seized from Alo’s organization over 11 pounds of meth, 15 firearms, and over $600,000. Coconspirator and former Georgia lottery winner, Ronnie Music, purchased meth for Alo’s organization with some of the $3 million Music won playing the lottery. Music was previously sentenced to 21 years in federal prison for his role in the drug trafficking organization.
Alo’s criminal history is shocking. Almost 30 years ago, at age 17, Alo earned his first felony burglary conviction. He was placed on probation, and the next year he committed and was convicted of burglarizing sixteen other homes. At 19, Alo committed and was convicted of another felony burglary charge. At 23, he kidnapped a doctor, stole his vehicle, shot the doctor in the leg, and then ran him over in an automobile. He was convicted by a jury and sentenced to life in prison.
At his sentencing before Judge Wood, Alo explained that the “devil” tattoo that adorns his left shoulder serves as a reminder of the “markings of the high cost of low living.”
Acting United States Attorney James D. Durham said, “Even the bars of a state prison cell have not deterred Mr. Alo from committing horrendous crimes. From a federal prison cell far, far away, it appears Mr. Alo will now have most of the rest of his live to ponder the high cost of low living.”
ATF Resident Agent in Charge Timothy S. Graden, stated, “Daniel Alo was one part of a large criminal organization. He and others will now spend lengthy parts of their life behind bars because of their criminal activity. Criminal organizations and individuals that commit violent crime, take notice, you could be next. ATF will continue to work closely with other agencies to make communities a safer place.”
Alo was one of over 20 other defendants who were charged and convicted in this investigation. This case was investigated and prosecuted by the Organized Crime Drug Enforcement Task Force, which is comprised of federal and local law enforcement agencies. The case was investigated by the ATF, the DEA, the FBI, the United States Marshal Service, the GBI, the Glynn-Brunswick Narcotics Enforcement Team, the Wayne County Sheriff’s Office, the Ware County Sheriff’s Office, the Glynn County Police Department, the Glynn County Sheriff’s Office, the Haralson-Paulding Drug Task Force and the Virginia State Police. Assistant United States Attorneys E. Greg Gilluly, Jr. and Tania D. Groover prosecuted the case on behalf of the United States. For questions, please contact the U. S. Attorney’s Office at (912) 201-2522.
US v Neilson IndictmentRead the Press Release
Neilson IndictmentU.S. Attorney Charges NW Alabama Compounding Pharmacy Sales Representatives in Prescription Fraud ConspiracyRead the Press Release
BIRMINGHAM – The U.S. Attorney’s Office on Wednesday charged two sales representatives for a Haleyville, Ala.,-based compounding pharmacy for participating in a conspiracy to generate prescriptions and defraud health care insurers and prescription drug administrators out of tens of millions of dollars in 2015.
Acting U.S. Attorney Robert O. Posey, FBI Acting Special Agent in Charge David W. Archey, U.S. Postal Inspector in Charge, Houston Division, Adrian Gonzalez, U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, Defense Criminal Investigative Service Special Agent in Charge John F. Khin, and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge James E. Dorsey announced the charges as part of a nationwide Department of Justice Health Care Fraud Takedown.
Attorney General Jeff Sessions and Department of Health and Human Services Secretary Tom Price, M.D., earlier today announced the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving about $1.3 billion in false billings. Of those charged, more than 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s nationwide arrests. In addition, HHS has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.
In the Northern District of Alabama, the U.S. Attorney’s Office filed separate informations charging KELLEY NORRIS, also known as KELLEY NORRIS-HARTLEY, 41, of Tuscaloosa, and BRIDGET McCUNE, 41, of Destin, Fla., with conspiracy to commit health care fraud, wire fraud and mail fraud. McCune’s information also charges her with conspiring to solicit and receive kickbacks in return for referring prescriptions under Medicare and TRICARE, a U.S. Department of Defense health care program, and with money laundering for spending proceeds of the crimes. Both women face various counts of health care fraud for submitting fraudulent prescription reimbursement claims to Blue Cross Blue Shield of Alabama.
In conjunction with the charges, prosecutors also filed plea agreements with Norris and McCune.
“In this case, a pharmacy used a marketing scheme that increased sales of expensive medications without regard for patient need or medical necessity,” Posey said. “Schemes like this defraud Medicare and other health insurance systems by pushing unnecessary medications and driving up the costs of health care.”
Norris and McCune both worked for Northside Pharmacy, an Alabama company doing business as Global Compounding Pharmacy. Global’s compounding and shipping facility was in Haleyville. The pharmacy did its prescription processing, billing and customer service at its “call center” in Clearwater, Fla.
Global hired sales representatives, including Norris and McCune, who were located in various states and were responsible for generating prescriptions from physicians and other prescribers. To bill insurance providers, including Blue Cross Blue Shield of Alabama, Medicare and TRICARE, for these prescriptions, Global contracted to enter the pharmacy networks of their third-party administrators, known as “pharmacy benefit managers” or “PBMs. These PBMs included Prime Therapeutics, Express Scripts Incorporated and CVS/Caremark.
The court documents describe a conspiracy at Global that centered on generating and billing PBMs for fraudulent, often high-reimbursement prescriptions. To generate prescriptions, Global hired sales representatives who were married or related to doctors and other prescribers. Global also encouraged sales representatives to volunteer at doctors’ offices where they would review patient files and push Global’s products to patients. Global executives also frequently instructed employees to obtain high-reimbursing prescriptions that Global would fill and bill for reimbursement. Each of the plea agreements describes a Global executive instructing sales representatives to obtain certain prescriptions and, shortly after, Norris and McCune obtained those prescriptions for themselves and their dependents.
When billing, Global engaged in various fraudulent practices, including splitting drug quantities to evade PBM billing safeguards and automatically refilling and billing for prescriptions regardless of patient need. Global routinely waived co-pays to encourage patients to accept unnecessary medications and refills.
As part of their plea agreements, Norris and McCune agree to forfeit money to the government as proceeds of illegal activity. Norris agrees to forfeit $287,698 and McCune $401,628.
Global paid the defendants a base salary plus a monthly commission for prescriptions that they obtained, according to court documents.
Norris worked out of Tuscaloosa as a sales representative for Global’s Alabama region from August 2014 to July 2016. She was closely related to an Alabama physician. That relative and a second physician, described in her plea agreement as a family friend, wrote a significant number of the prescriptions Norris obtained for Global to fill.
McCune began as a sales representative for Global’s Florida region in September 2014, working from Destin. Global promoted her to national field trainer in January 2015, but she also continued to function as a sales representative until she left the company in July 2016. McCune had a “close familial relationship” with a Florida physician, according to her plea agreement. “The overwhelming majority of prescriptions she obtained” were issued under her family member’s signature, her plea agreement states.
The charges against Norris and McCune follow charges brought by the U.S. Attorney’s Office in May against Global sales representative Robin Gary Lowry, 49, of Columbus, Miss. Lowry was charged with conspiracy to defraud BCBS of Alabama and Prime Therapeutics. She also faced three counts of health care fraud for submitting fraudulent claims for payment to BCBS of Alabama.
Lowry pleaded guilty to the charges in June. She is scheduled for sentencing Nov. 7.
FBI, U.S. Postal Inspection Service, U.S. Department of Health and Human Services Office of Inspector General, U.S. Defense Criminal Investigative Service and Internal Revenue Service, Criminal Investigation investigated the cases, which Assistant U.S. Attorneys Chinelo Dike-Minor and Nicole Grosnoff are prosecuting.
Two KC Men Indicted for Drug Trafficking as Part of National TakedownRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced today that two Kansas City, Mo., men have been indicted, in separate cases, as part of a nationwide enforcement action related to the distribution of opioids and other dangerous narcotics.
Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced earlier today the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts. Many of the defendants included in today’s national announcement are medical professionals, including doctors and nurses. In the two local cases, however, the defendants are not medical professionals but are charged with conduct related to the possession and distribution of controlled substances.
USA v. Toombs
William E. Toombs, Jr., also known as “Zorro” or “Big Z,” 59, of Kansas City, was charged in a 10-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on June 29, 2017. That indictment was unsealed and made public upon Toombs’s arrest and initial court appearance on Tuesday, July 11, 2017.
The federal indictment charges Toombs with nine counts of possessing controlled substances with the intent to distribute. On June 19, 2015, Toombs allegedly possessed crack cocaine, Oxycodone, Morphine, Hydrocodone, Codeine, Alprazolam and Diazepam with the intent to distribute. On April 25, 2016, Toombs allegedly possessed heroin with the intent to distribute. On May 4, 2016, Toombs allegedly possessed Oxycodone, Methadone, Hydrocodone and Alprazolam with the intent to distribute.
Toombs is also charged with being a felon in possession of a firearm. Toombs, who has a prior felony conviction, allegedly possessed a Taurus .45 Long Colt/410 gauge revolver on June 19, 2015.
USA v. Cunningham
Josef Cunningham, Jr., also known as Carl Thomas, 31, of Kansas City, Mo., was charged in a six-count indictment returned by a federal grand jury on June 29, 2017.
The federal indictment charges Cunningham with one count of possessing Oxycodone between April 25 and June 10, 2015, with the intent to distribute. Cunningham is also charged with five counts of obtaining a controlled substance by fraud. Cunningham allegedly obtained Oxycodone and Codeine using fraudulent prescriptions.
Larson cautioned that the charges contained in these indictments are simply accusations, and not evidence of guilt.
These cases are being prosecuted by Assistant U.S. Attorney Trey Alford. They were investigated by the Kansas City, Mo., Police Department and the Department of Health and Human Services, Office of Inspector General.
Two Former Employees of House Member Indicted on Federal Charges in Cyberstalking CaseRead the Press Release
WASHINGTON – Two former staff employees of a member of the U.S. House of Representatives have been indicted following an investigation into the circulation of private, nude images and videos of the member and the member’s spouse, announced U.S. Attorney Channing D. Phillips and Matthew R. Verderosa, Chief of the United States Capitol Police.
Juan R. McCullum, 35, of Washington, D.C., was indicted by a grand jury on two counts of cyberstalking, and a co-worker, Dorene Browne-Louis, 45, of Upper Marlboro, Md., was indicted on two counts of obstruction of justice. The indictment, which was unsealed today, was returned on July 11, 2017, in the U.S. District Court for the District of Columbia.
According to the indictment, McCullum worked from April 2015 until June 2016 in the House member’s legislative office in Washington, D.C. Browne-Louis worked in the same office from January 2015 until April 2016.
The indictment alleges that, during the course of his employment, McCullum offered in March 2016 to assist the House member in repairing the member’s malfunctioning, password-protected cellular iPhone by taking the device to a local Apple store. According to the indictment, the House member provided McCullum with the device solely to have the iPhone repaired. McCullum was not given permission to take, copy, or distribute any of the contents of the iPhone. The iPhone contained the private, nude images and videos.
As alleged in the indictment, in July 2016, after McCullum left the House member’s staff, he engaged in a course of conduct that included creating a Hotmail account and a Facebook social media account, using a fictitious name, to distribute and post the private images and videos. Further, according to the indictment, he encouraged others on social media to redistribute the images and videos in the member’s congressional district. The indictment alleges that McCullum also sent text messages to Browne-Louis alerting her to his activities as early as July 2, 2016, as well as e-mail messages containing several of the images and videos.
On July 6, 2016, federal law enforcement initiated a criminal investigation into the unauthorized distribution and publication of the images and videos. The charges against Browne-Louis involve text messages from McCullum that she allegedly deleted from her cellular phone, as well as false, incomplete, and misleading statements that she allegedly made to law enforcement and a federal grand jury regarding her knowledge of the activities.
Browne-Louis made her first appearance today in the U.S. District Court for the District of Columbia. She pled not guilty to the charges and was released on personal recognizance pending a status hearing scheduled for July 19, 2017. McCullum’s first court appearance has not yet been scheduled.
The charge of cyberstalking carries a statutory maximum of five years in prison and potential financial penalties. The charge of obstruction of justice carries a statutory maximum of 20 years of incarceration and potential financial penalties.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
This case is being investigated by the United States Capitol Police. It is being prosecuted by Assistant U.S. Attorneys Veronica Jennings and Tejpal S. Chawla of the U.S. Attorney’s Office for the District of Columbia. Assistance was provided by former Assistant U.S. Attorney Natalia Medina, Criminal Investigator John Marsh, Paralegal Specialists Bianca Evans and Matthew Ruggiero, and Litigation Technology Specialists Leif Hickling, Thomas Royal and Paul Howell, all of the U.S. Attorney’s Office.
Two Executives Found Guilty of Promoting A Fraudulent Offshore Tax Shelter SchemeRead the Press Release
Tampa, Florida – U.S. District Judge Steven D. Merryday has found Duane Crithfield (70, Asheville, North Carolina) and Stephen P. Donaldson, Sr. (71, Tampa) guilty of one count of conspiracy to defraud the United States and two counts of willfully aiding the submission of a false and fraudulent income tax return. Crithfield’s and Donaldson’s sentencing hearings are scheduled for September 27 and 28, 2017, respectively. Each faces a maximum penalty of 11 years in federal prison.
Crithfield and Donaldson were initially indicted on May 2, 2013, for conspiracy to defraud the United States. A superseding indictment was returned on July 25, 2013, adding two substantive charges.
As alleged in the superseding indictment, from 2001 to at least March 2008, Crithfield, Donaldson, and others, through Foster & Dunhill, Offshore Trust Service, Fidelity Insurance Company (FIC), and Citadel Insurance Company (CIC) promoted, marketed, and implemented a fraudulent offshore tax strategy known as the Business Protection Plan (BPP). The fraudulent BPP strategy enabled the defendants' affluent clients to claim business expense deductions based on sham “BPP insurance premium” payments made to offshore entities FIC and CIC in amounts intended primarily to substantially reduce the clients' taxable income for a particular year.
According to the trial judge’s Order and evidence admitted during the bench trial, Crithfield and Donaldson conspired together, and with others, to create and promote the offshore BPP tax shelter strategy. The strategy, however, was nothing more than self-insurance and was devoid of any economic substance and the so‑called “BPP insurance premiums” were not based on actual business risks. After obtaining the benefit of a tax deduction on the client's corporate income tax return, the client would later receive approximately 83‑85% of the premium back. Thus, the premium amounts were not ordinary and necessary business expenses that were entitled to deductions under Section 162(a) of the Internal Revenue Code. Rather, they were merely sham expenditures and not properly deductible for U.S. income tax purposes on the respective businesses’ tax returns.
This case was investigated by the Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorneys Jay G. Trezevant and Megan K. Kistler.
Two Charged in Multi-Million Dollar Compounding Pharmacy Fraud SchemeRead the Press Release
Hattiesburg, Miss. – Jason May, 40, of Lamar County, Mississippi, and Gerald Jay Schaar, 46, of Biloxi, Mississippi, have each been charged by Criminal Information for their roles in a multi-million dollar compounding pharmacy health care fraud conspiracy, announced Acting U.S. Attorney Harold Brittain, FBI Special Agent in Charge Christopher Freeze, IRS-Criminal Investigation Special Agent in Charge Jerome R. McDuffie, and John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service Southeast Field Office.
The charges were brought as a result of the largest ever national health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants in 41 federal districts across the country, targeting schemes which involved billing Medicare, Medicaid, and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries.
May is charged with conspiracy to commit health care fraud and money laundering in connection with his role as co-owner and pharmacist in charge of Advantage Pharmacy, which received approximately $192 million in reimbursements from TRICARE and other health care benefit programs for compound topical creams. According to the Criminal Information, May selected formulas for the compound creams based on reimbursement rates as opposed to medical efficacy. In order to facilitate the scheme to defraud, May and Advantage Pharmacy either did not collect patient copayments for the compound topical creams or paid copayments on behalf of beneficiaries. As a co-owner of Advantage Pharmacy, May received a portion of the reimbursements associated with the fraudulently obtained compound creams and transferred certain of those proceeds from the fraud – in transactions greater than $10,000 - into a money market account held in his name.
Schaar is charged with conspiracy to commit health care fraud for his role in a fraudulent scheme in which he, acting as a marketer for a pharmacy located in Lamar County, solicited physicians and other medical professionals to write prescriptions without seeing patients for compound topical creams dispensed by the pharmacy. According to the Criminal Information, Schaar, together with others, later falsified patient records to make it seem as though medical professionals had examined the patients who received prescriptions for the compound creams. In total, the pharmacy received $2.3 million in reimbursements for the prescriptions solicited by Schaar.
Jason May and Gerald Jay Schaar are both scheduled to enter guilty pleas before U.S. District Judge Keith Starrett on July 25, 2017, at 1:30 p.m.
This case is being prosecuted by Department of Justice trial attorneys Dustin Davis and Katherine Payerle and Assistant U.S. Attorney Mary Helen Wall. The case is being investigated by the FBI, IRS-Criminal Investigation, Defense Criminal Investigative Service, Health and Human Services Office of Inspector General, Mississippi Bureau of Narcotics, and other government agencies.
Two Austin Psychologists, Owners of Psychological A.R.T.S., P.C., and a Patient Recruiter Indicted for Federal Health Care CrimesRead the Press Release
As part of the largest coordinated Health Care Fraud enforcement action to date, Federal and state authorities arrested two Austin psychologists who own and operate Psychological A.R.T.S., P.C., announced United States Attorney Richard L. Durbin, Jr., FBI Special Agent in Charge Christopher Combs, San Antonio Division, and Texas Attorney General Ken Paxton.
An indictment returned by a federal grand jury in Austin charges 72-year-old Dr. William Joseph Dubin and his son, 32-year-old Dr. David Fox Dubin, with one count of conspiracy to violate the federal anti-kickback law; five counts of paying illegal kickbacks; one count of conspiracy to commit health care fraud; seven counts of health care fraud and aiding and abetting health care fraud; and, six counts of aggravated identity theft, and aiding and abetting aggravated identity theft. A third defendant in this indictment, 67-year-old patient recruiter Glen Elwood McKenzie, Jr., of Cedar Park, TX, is charged with one count of conspiracy to violate the federal anti-kickback law and five counts of receiving illegal kickbacks.
According to the indictment, Dr. William Dubin, and Dr. David Dubin, are licensed psychologists who operated Psychological A.R.T.S. in Austin. McKenzie was the President of the Board of Directors of an emergency shelter house located approximately eighty miles from Austin that provided temporary shelter for crisis intervention and mental health services to children and youth ages 5 to 17 who had been removed from their homes by the Texas Department of Family and Protective Services. The indictment alleges that, in exchange for kickbacks paid to him, McKenzie used his position at the emergency shelter and his contacts with other similar shelters to refer children and youth to Psychological A.R.T.S., for comprehensive mental health assessments. From January 2011 to June 2015, Dr. William Dubin and Dr. David Dubin allegedly caused fraudulent billings totaling approximately $300,000 to be submitted to the Texas Medicaid program and the Texas Vocational Rehabilitation Services program for various psychological services. Upon receipt of payment for their services, the doctors paid McKenzie a 10-percent kickback from the money paid to Psychological A.R.T.S.
According to the allegations of the indictment, Dr. William Dubin, and Dr. David Dubin directed students and interns, who were unlicensed and unsupervised, to conduct psychiatric diagnostic evaluations of the children and youth referred to them by McKenzie. The students and interns then prepared psychological evaluation reports, which included the student’s diagnoses of the psychological condition of each child and youth, the student’s impressions of the risk of each child and youth for future obstructive and disruptive behaviors, and the student’s recommendations for future treatment. The indictment alleges that Dr. William Dubin, and Dr. David Dubin, then billed or caused others to send bills to Medicaid that falsely claimed that Dr. William Dubin had done the work that was actually done by the unlicensed students and interns. The Medicaid rules expressly prohibited psychologists from billing for services performed by students and interns. The Medicaid rules allow a psychologist to bill, at a reduced fee, for services provided by a supervised licensed psychological associate. The reduced fee is seventy percent of the fee paid for work performed by the licensed psychologist.
The indictment alleges that Dr. William Dubin, and Dr. David Dubin also directed unsupervised licensed psychological associates to prepare psychiatric diagnostic evaluations of the children and youth referred to them by McKenzie. Dr. William Dubin and Dr. David Dubin then billed, or caused others to send bills, Medicaid falsely claiming that Dr. William Dubin had done work that was actually done by the associates. This resulted in a larger payment from Medicaid and a larger percentage of profit for Psychological A.R.T.S., Dr. William Dubin and Dr. David Dubin.
Upon conviction, each count related to illegal kickbacks calls for up to five years in federal prison; each count related to Health Care Fraud calls for up to ten years in federal prison; and, each count related to aggravated identity theft calls for up to two years in federal prison.
This indictment resulted from an investigation conducted by special agents with the Federal Bureau of Investigation together with investigators from the Texas Attorney General’s Medicaid Fraud Control Unit. Special Assistant United States Attorney Rex Beasley is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Two Atlantic County Men Sentenced for Their Roles in Large-Scale Crack Cocaine Trafficking ConspiracyRead the Press Release
CAMDEN, N.J. – Two Atlantic County, New Jersey, men were each given multi-year prison sentences for their participation in a nearly three-year conspiracy to distribute cocaine and crack cocaine in the Atlantic City, New Jersey area, Acting U.S. Attorney William E. Fitzpatrick announced today.
John Wellman, 41, of Atlantic City, New Jersey, was sentenced today to 130 months in prison. Ronald Douglas Byrd, 51, of Pleasantville, New Jersey, was sentenced July 11, 2017 to 96 months in prison. Both defendants previously pleaded guilty to Count One of an indictment charging them with conspiracy to distribute crack cocaine. U.S. District Judge Jerome B. Simandle imposed both sentences in Camden federal court.
According to documents filed in this case and statements made in court:
From February 2012 through Dec. 10, 2014, Byrd, Wellman and others engaged in a drug trafficking conspiracy through which Byrd distributed more than one kilogram of crack cocaine and Wellman distributed more than 280 grams of crack cocaine. Members of the conspiracy used Byrd’s Pleasantville residence and at least two other residences in Pleasantville and Absecon, New Jersey – including one that was rented by Wellman – to store and package cocaine and crack cocaine.
In addition to the prison terms, Judge Simandle sentenced both defendants to five years of supervised release.
The U.S Attorney’s Office charged a total of 12 individuals for their participation in this drug trafficking conspiracy. All of those charged, with the exception of one defendant who remains a fugitive, have been convicted of their roles in the drug trafficking conspiracy or related charges.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Drug Enforcement Administration’s Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski; the Atlantic County Prosecutor’s Office, under the direction of Acting Prosecutor Diane M. Ruberton; and the Atlantic City Police Department, under the direction of Police Chief Henry White, with the investigation leading to these convictions.
He also thanked the N.J. State Police; the Bureau of Alcohol, Tobacco and Firearms; U.S. Immigration and Customs Enforcement (ICE)-Homeland Security Investigation (HSI); U.S. Postal Inspection Service; Cumberland County Sheriff’s Office and the Ventnor, Northfield and Millville police departments for their assistance.
The government is represented by Assistant U.S. Attorneys Diana Vondra Carrig and Howard Wiener of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel:
Byrd: Michael Huff Esq., Philadelphia
Wellman: John F. Renner Esq., Marlton, New Jersey
Twenty-Four Charged in Arkansas as Part of Largest Nationwide Health Care Fraud Enforcement Action in Department of Justice HistoryRead the Press Release
WASHINGTON—Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced today the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts—including the Eastern District of Arkansas. Among the defendants were 115 doctors, nurses and other licensed medical professionals, all alleged to have participated in health care fraud schemes involving approximately $1.3 billion in false billings. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.
In Arkansas, Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas and Stephen G. Azzam, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) New Orleans Field Division, who oversees the DEAs’ Little Rock District Office, announced the unsealing of three indictments charging 24 defendants in schemes intended to divert pharmaceutical pills to the streets.
“The abuse of prescription medication, particularly opioids, is one of the largest health and crime problems Arkansas is facing,” Harris said. “This epidemic must be attacked on multiple fronts—by stopping the criminal doctors and medical professionals from writing medically unnecessary prescriptions, and by preventing the common drug dealers from diverting these pills to the hands of other addicts and dealers, either by writing fraudulent prescriptions or stealing dangerous drugs from pharmacies. The defendants in the cases announced by my office today illegally put hundreds of thousands of pills on the streets, and they must be stopped. The Eastern District of Arkansas joins the Justice Department’s resolve to aggressively pursue and prosecute all manner of health care and prescription pill crime.”
In the first Arkansas case, 4:16-cr-00278-KGB, charges stem from an early-morning burglary on February 25, 2016, of the Health-Way pharmacy in Beebe. On December 7, 2016, the four suspects in the burglary, Albert Ray Ferguson, Jr., Thristian Davante Duplechin, Corry Wayne Cornett, and Cory Jermaine Lewis, all from Houston, Texas, were charged with conspiracy to break in a business premises registered with the DEA to dispense controlled substances.
Following the arrest of the initial four defendants, an ongoing investigation by the DEA Tactical Diversion Squad uncovered a network of individuals who were traveling between states to commit pharmacy burglaries. During the investigation, the DEA canvased law enforcement agencies from nearby states for similar pharmacy burglaries, and developed evidence linking eight additional defendants to the defendants from Beebe. Physical and electronic evidence from numerous burglaries in several states, including Arkansas, Nebraska, Indiana, Illinois, Iowa, Kentucky, Virginia, and Texas, showed that the individuals involved were members of local street gangs in the Houston area.
These gangs stole more than 120,000 Schedule II pills during these burglaries, with a street value of at least $1,050,000. On July 6, 2017, a superseding indictment was returned in the Eastern District of Arkansas adding an additional count charging the other gang members with conspiracy to possess with intent to distribute Schedule II, III and IV controlled substances.
In case 4:17-cr-176-BSM, a federal Grand Jury charged Erik Edson Turner and two others with conspiracy to possess with intent to distribute Schedule II controlled substances without an effective prescription. Beginning in 2015, Turner fabricated prescriptions to fraudulently obtain oxycodone 30 mg tablets from pharmacies. Turner sold some of the oxycodone to Spencer Daniel King, who eventually joined Turner in the conspiracy to obtain the drug by using fraudulent prescriptions. In 2016, Michael Joseph “Joey” Carbonero was recruited by Turner to assist in the scheme. Over the course of two years, Turner and individuals working on his behalf obtained thousands of oxycodone pills with a street value in excess of $150,000. These cases are being prosecuted by Assistant United States Attorney Anne E. Gardner.
In the third case, 4:17-cr-00184 BSM, the DEA Tactical Diversion squad uncovered a sophisticated prescription-forgery operation headed by Michael McClellan, 32, of North Little Rock. In this scheme, McClellan created fraudulent prescriptions using computer templates that either McClellan or other individuals then filled at local pharmacies.
The investigation into McClellan’s operation began following a break-in at McClellan’s home. When police arrived, they discovered numerous pieces of drug paraphernalia and other indicators of illegal activity. The DEA obtained a search warrant for the computers in McClellan’s home, and an analysis of these computers revealed the extent of the operation.
Agents also located drug ledgers in McClellan’s home that, coupled with the information from the computers, revealed the names of nearly 100 people whose identification was used to obtain fraudulent prescriptions. All told, since the conspiracy began in 2012, more than 74,000 pills were obtained from these forged prescriptions. McClellan and the eight other main individuals in the organization are charged with conspiracy to possession with intent to distribute Schedule II controlled substances. This cases is being prosecuted by Assistant United States Attorney Chris Givens.
“The diversion and abuse of prescription drugs pose a significant threat to the health and safety of our communities across the nation, including here in Arkansas,” Special Agent in Charge Azzam said. “Today, more people die from opioid-related causes than from gun homicides. This unprecedented collaboration between all law enforcement agencies represented in this region exemplifies the continuing unified goal of keeping our neighborhoods safe and secure. The indictment of these individuals will undoubtedly convey a strong and unified message to those criminals who continue to engage in activities, such as these pharmacy burglaries, threatening the safety of our citizens.”
Nationwide, today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.
The charges announced today aggressively target schemes billing Medicare, Medicaid, and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 91 Americans die every day of an opioid related overdose.
“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” Attorney General Sessions said. “Amazingly, some have made their practices into multimillion dollar criminal enterprises. They seem oblivious to the disastrous consequences of their greed. Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start. The consequences are real: emergency rooms, jail cells, futures lost, and graveyards. While today is a historic day, the Department's work is not finished. In fact, it is just beginning. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”
“Healthcare fraud is not only a criminal act that costs billions of taxpayer dollars - it is an affront to all Americans who rely on our national healthcare programs for access to critical healthcare services and a violation of trust,” Secretary Price said. “The United States is home to the world’s best medical professionals, but their ability to provide affordable, high-quality care to their patients is jeopardized every time a criminal commits healthcare fraud. That is why this Administration is committed to bringing these criminals to justice, as President Trump demonstrated in his 2017 budget request calling for a new $70 million investment in the Health Care Fraud and Abuse Control Program. The historic results of this year’s national takedown represent significant progress toward protecting the integrity and sustainability of Medicare and Medicaid, which we will continue to build upon in the years to come.”
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed.
The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent unless and until proven guilty.
Additional documents related to this announcement are available here: https://www.justice.gov/opa/documents-and-resources-july-13-2017.
16-278 Indictment 17-176 IndictmentThree Sentenced for Roles in Healthcare ConspiracyRead the Press Release
Abingdon, VIRGINIA – Three Bristol, Virginia residents, who were previously convicted of healthcare fraud, were sentenced today in Federal Court, Acting United States Attorney Rick A. Mountcastle, Virginia Attorney General Mark R. Herring and Nick DiGiulio, Special Agent in Charge, Philadelphia Regional Office for U.S. Health and Human Services - Office of Inspector General announced.
Deborah Branch, 65, was sentenced today to 72 months in federal prison. In a pair of separate hearings today, Bryan Harr, 41, was sentenced to 48 months in federal prison and Melissa Harr, 49, was sentenced to 48 months in federal prison. The three previously pled guilty to federal healthcare conspiracy charges. Branch additionally pled guilty to wire fraud.
“This case shows that fraud committed against our federal and state health care benefit programs is more than just simple theft of government money, there is a sinister side to the greed that fuels the criminal acts of defendants like these,” Acting United States Attorney Mountcastle said today. “This type of greed brings physical and emotional devastation upon the innocent, vulnerable victims for whom essential services are denied, simply to satiate the greed of these defendants. In this case, children were forced to live in filth in a room without electricity. The United States Attorney’s Office, and our partners at the Virginia Attorney General’s Office, Health and Human Services and others, will continue to aggressively pursue fraudsters, like Branch and the Harrs, whose criminal actions bring harm to vulnerable victims.”
“Anyone who diverts public funds for their private benefit is stealing from all of us and undermining an important system that provides thousands of Virginians with needed medical services,” said Attorney General Mark Herring. “A situation where people steal that money at the expense of their own disabled child is even more horrifying and unacceptable, and I’m glad to see these criminals brought to justice today. My award-winning Medicaid Fraud Unit and I will be relentless in holding accountable those who try to take advantage of our health care system.”
“It is shocking to imagine parents who would for many years neglect their disabled child and allow him to suffer horribly while they worked to steal taxpayer money meant to pay for the child’s much needed care,” said Special Agent in Charge Nick DiGiulio of the United States Department of Health and Human Services, Office of Inspector General. “We are satisfied that justice was served today, and we will continue to work with our law enforcement partners to jail heartless criminals who prey on beneficiaries and our health care system.”
According to evidence presented at previous hearings, Bryan Harr Sr. and his wife, Melissa Harr, hired Branch to work with one of their children, who suffers from intellectual and physical disabilities and who qualifies for services paid for by Virginia Medicaid, including personal assistance, respite and residential support services. These services are available to qualified individuals pursuant to Virginia Medicaid’s Intellectual Disability (ID) waiver program. The ID waiver program is designed to provide critical services that enable a recipient to remain at home instead of being placed in an institution. Recipients or their guardians are permitted to hire workers of their own choosing to provide these services, which are paid for by Virginia Medicaid. Branch was paid through two different Virginia Medicaid contractors: Public Partnerships, LLC and ResCare (formerly known as Creative Family Solutions).
From January 2010 until September 2015, Branch, with the knowledge of Melissa Harr and Bryan Harr Sr., submitted time sheets claiming Branch was providing services for Harr’s disabled son when she was not. In exchange for assisting Branch in being paid for work she did not do, Branch paid the Harrs approximately $200 every two weeks. Virginia Medicaid’s Department of Medical Assistance Services (DMAS) paid out $350,641.02 to the contractors based on these time sheets, of which $207,854.43 was paid to Branch. More importantly, the Harr’s disabled son did not receive the services he legitimately needed pursuant to the ID waiver program.
The investigation of the case was conducted by the Medicaid Fraud Control Unit of the Virginia Attorney General’s Office, the U.S. Department of Health and Human Services Office of Inspector General, and the Bristol Virginia Police Department. Special Assistant United States Attorney Janine M. Myatt, a Virginia Assistant Attorney General, prosecuted the case for the United States.
Three Doctors, A Chiropractor, Three Therapists and Medical Company Owners Arrested in Brooklyn as Part of National Health Care Fraud TakedownRead the Press Release
Ten individuals, including three doctors, a chiropractor, three licensed physical and occupational therapists and two medical company owners, have been charged for their alleged participation in multiple schemes that fraudulently billed the Medicare and Medicaid programs more than $125 million. The charges filed in federal court in Brooklyn, New York are part of a nationwide health care fraud takedown led by the Medicare Fraud Strike Force, which resulted in criminal charges against 412 individuals for their alleged participation in health care fraud schemes involving approximately $1.3 billion in fraudulent claims.
The Brooklyn and Queens cases were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), New York Regional Office, James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), and Medicaid Inspector General Dennis Rosen of New York State Office of Medicaid Inspector General (OMIG). The results of the nationwide takedown were announced today by Attorney General Jeff Sessions, Department of Health and Human Services (HHS) Secretary Tom Price, M.D., Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting FBI Director Andrew McCabe, Acting Drug Enforcement Administration (DEA) Administrator Chuck Rosenberg, Inspector General Daniel Levinson of the HHS Office of Inspector General (OIG), IRS-Criminal Investigations Chief Don Fort, Centers for Medicare and Medicaid Services Administrator Seema Verma, and Deputy Director Kelly P. Mayo of the Defense Criminal Investigative Service (DCIS).
“As alleged, the defendants charged in the Eastern District of New York as part of this national takedown took advantage of programs designed to provide essential healthcare for the elderly and the needy. Doctors, medical professionals and others who defraud Medicare and Medicaid and pay illegal kickbacks to line their pockets at the taxpayers’ expense are on notice that they will be investigated and prosecuted,” stated Acting United States Attorney Rohde. Ms. Rohde extended her grateful appreciation to the U.S. Office of Personnel Management, Office of Inspector General (OPM-OIG), U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), the New York City Police Department (NYPD), the New York Attorney General’s Medicaid Fraud Control Unit (MFCU), the New York City Human Resources Administration and the New York City Health and Hospitals Corporation, Office of Inspector General, for their assistance in the investigations in this district.
“Bhambhani’s alleged acts of illegally paying for patient referrals and submitting a plethora of false million-dollar claims to Medicare and Medicaid were aimed towards selfish gain,” FBI Assistant Director-in-Charge Sweeney Jr. stated. “Crimes of this nature not only stand to compromise government programs created to assist those in need, but also the confidence of those who put great trust in doctors and medical professionals. It goes without saying that to betray this trust is utterly unethical.”
“Being a health care provider in the Medicare and Medicaid programs is a privilege, not a right. When fraudsters rip off scarce taxpayer funds meant to pay for legitimate health care services, they undermine these vital programs and affect the millions of Americans who rely on them,” said Special Agent in Charge Lampert of HHS-OIG. "Our agency, working closely with our law enforcement partners, will continue root out fraudulent schemes and hold criminals accountable in order to protect the integrity of our nation’s federally funded health care system.”
“Healthcare Fraud is not a victimless crime,” stated IRS-Criminal Investigation Special Agent-in-Charge Robnett. “We all pay when others swindle the United States overnment. With both law enforcement and financial investigation expertise, our agents are uniquely qualified to assist our law enforcement partners in these cases, by following the money when investigating these allegations.”
“Individuals who commit Medicaid fraud prey on the most vulnerable New Yorkers, and the impacts - fewer health care resources and waste of taxpayer dollars - affect all of us,” said OMIG Inspector General Rosen. “My office will continue to work closely with our partners at the federal and state level to root out fraud and hold wrongdoers fully accountable.”
The schemes charged in the Eastern District of New York, detailed in four indictments and two criminal complaints, are as follows:
Ghanshyam Bhambhani: A criminal complaint charges Ghanshyam Bhambhani, a Queens cardiologist, with violating the Anti-Kickback Statute by paying other physicians for patient referrals to his practice. A search warrant was also executed at his medical office in Ozone Park. According to the complaint, physicians who worked with the doctor covertly recorded him discussing paying for patient referrals. Bhambhani, along with other employees of his practice, submitted over $3.7 million in claims to Medicare Part B, and Bhambhani is listed as the attending physician for over $7.4 million in claims submitted to Medicare Part A. This case is being prosecuted by Assistant United States Attorney Erin Argo and Senior Litigation Counsel Patricia Notopoulos of the U.S. Attorney’s Office for the Eastern District of New York. Bhambani was arrested today and he is expected to be arraigned this afternoon before United States Magistrate Judge Robert Levy at the federal courthouse in Brooklyn, New York on July 13, 2017.
United States v. Wael Bakry, et al.: The indictment charges five health care professionals for their role in a wide-ranging health care fraud conspiracy in Brooklyn and Queens that billed the Medicare program approximately $100 million. The defendants—Wael Bakry, a physical therapist, Abraham Demoz, a physician, Victor Genkin, an occupational therapist, Mayura Kanekar, an occupational therapist, and Alexander Khavash, a chiropractor—were charged with conspiring to commit health care and wire fraud and with related tax charges. According to the indictment, the defendants paid illegal kickbacks for the referral of patients to their clinics who, in turn, subjected themselves to purported physical and occupational therapy and other services. This case is being prosecuted by Acting Assistant Chief A. Brendan Stewart and Trial Attorney Richard A. Powers of the Criminal Division’s Fraud Section. Bakry, Demoz, and Kanekar were arrested and arraigned before States Magistrate Judge Vera M. Scanlon at the federal courthouse in Brooklyn, New York on July 10, 2017. The case has been assigned to States District Judge Pamela K. Chen.
Xiaoliang Zhang: A criminal complaint charges Xiaoliang Zhang, a licensed physician specializing in rehabilitation medicine, with health care fraud for submitting $27 million worth of claims to Medicare and Medicaid for physical therapy services even though such services were not medically necessary, often not provided, and otherwise did not qualify for reimbursement. Search warrants were executed by agents from the FBI and HHS-OIG at two of Zhang's medical clinic locations, which he operated under the name Elmhurst United Medical, P.C. As described in the complaint, Zhang ordered his physical therapists to bill Medicare and Medicaid for administering treatments to patients that were not rendered. This case is being prosecuted by Senior Litigation Counsel Patricia Notopoulos of the U.S. Attorney’s Office for the Eastern District of New York. Zhang was arrested and arraigned before United States Magistrate Judge Robert M. Levy at the federal courthouse in Brooklyn, New York on July 12, 2017.
Svetlana Shargorodskaya: The indictment charges Svetlana Shargorodskaya, the owner of a medical diagnostic testing company, LUVR Diagnostic Services, with health care fraud, false claims, and conspiracy to receive and pay kickbacks. As set forth in the indictment, Shargorodskaya, through LUVR, submitted false claims to various health care benefit programs, including Medicare, and paid patients to receive medically unnecessary services. LUVR fraudulently billed Medicare and insurance companies for more than $13 million in diagnostic testing services. This case is being prosecuted by Trial Attorneys Debra Jaroslawicz and Richard A. Powers of the Criminal Division’s Fraud Section. Shargorodskaya was arrested and arraigned before United States Magistrate Judge Robert M. Levy at the federal courthouse in Brooklyn, New York on July 12, 2017. The case has been assigned to United States District Judge Margo K. Brodie.
Suzanna Meliksetyan: The indictment charges Suzanna Meliksetyan with conspiracy to commit health care fraud, health care fraud, and false statements relating to health care matters for her role in a scheme to defraud Healthfirst, a non-profit, New York-based health maintenance organization that administered Medicare Advantage plans and New York Medicaid Managed Care plans for participating members. As described in the indictment, Meliksetyan and others impersonated representatives of approved providers in order to get approval for the submission of fraudulent claims for durable medical equipment. In total, the scheme resulted in the submission of more than $12 million in fraudulent claims and the payment of more than $5 million for those claims. This case is being prosecuted by Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section. Meliksetyan was arrested and arraigned before United States Magistrate Judge Timothy J. Sullivan at the federal courthouse in Greenbelt, Maryland on July 11, 2017. The case has been assigned to United States District Judge Roslynn R. Mauskopf.
Vadim Alekseyev: The indictment charges Vadim Alekseyev, who owned and operated a number of shell companies in furtherance of a health care fraud and kickback scheme, with conspiracy to commit money laundering and conspiracy to obstruct the lawful functions of the Internal Revenue Service. As described in the indictment, Alekseyev and his co-conspirators filled multiple Brooklyn-area clinics, which purported to provide physical and occupational therapy to Medicare and Medicaid beneficiaries, with patients by paying bribes and kickbacks to beneficiaries and to Brooklyn-area ambulance drivers, who provided patients to be subjected to medically unnecessary treatment at the clinics. Through the clinics in which Alekseyev was involved, he and his co-conspirators submitted claims for over $40 million in purported therapy sessions in return for which Medicare and Medicare paid the clinics over $11 million. This case is being prosecuted by Trial Attorneys Sarah Wilson and Richard A. Powers of the Criminal Division’s Fraud Section.
The charges in the indictments and complaints are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Defendants:
Ghanshyam Bhambhani
Age: 52Queens, NY
EDNY Docket No. 17-M-604
WAEL BAKRY
Age: 45
Staten Island, NY
Dr. Abraham Demoz
Age: 57
Oceanside, NY
Victor Genkin
Age: 48
Brooklyn, NY
Mayura Kanekar
Age: 42
Bayside, NY
Alexander Khavash
Age: 40
Parkland, FL
EDNY Docket No. 17-CR-353
XIAOLIANG ZHANG
Age: 53
Brooklyn, NY
EDNY Docket No. 17-M-618
Svetlana Shargorodskaya
Age: 47
Staten Island, NY
EDNY Docket No. 17-CR-358
Suzanna Meliksetyan
Age: 28
Montgomery Village, MD
EDNY Docket No. 17-CR-351
Vadim Alekseyev
Age: 33
Brooklyn, NY
EDNY Docket No. 17-CR-336