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Friday 2 December 2016
CEO of Virginia Health Care Technology Company Pleads Guilty to $30 Million Shareholder Fraud and $7.5 Million Employment Tax FraudRead the Press Release
A medical doctor and entrepreneur pleaded guilty today to inducing interstate travel to commit a fraud and failing to account for and pay over employment taxes announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Assistant Director in Charge Paul Abbate of the FBI’s Washington Field Office.
According to the plea agreement, statement of facts, and other court documents, in or about September 2000, Sreedhar Potarazu, 51, of Potomac, Maryland, an ophthalmic surgeon licensed in Maryland and Virginia, founded VitalSpring Technologies, Inc. (VitalSpring), a Delaware corporation. VitalSpring operated in McLean, Virginia and provided data analysis and services relating to health care expenditures. In or around the end of 2015, VitalSpring started doing business as Enziime LLC, a Delaware corporation. From its inception, Potarazu was VitalSpring’s Chief Executive Officer and President, and served on its Board of Directors.
As early as 2009, Potarazu provided materially false and misleading information to VitalSpring’s shareholders to induce more than $30 million in capital investments in the company. Potarazu represented on numerous occasions that the sale of VitalSpring was imminent, which would have resulted in profits for shareholders, and concealed that VitalSpring failed to account for and pay over more than $7.5 million in employment taxes to the IRS. For example, in 2014, Potarazu provided shareholders with a written summary of operating results that reflected VitalSpring’s 2013 revenues to be approximately $12.9 million when, in fact, the 2013 revenue was less than $1 million.
“Sreedhar Potarazu created a complex web of lies to deceive VitalSpring shareholders, using false documents, fictitious websites, and fake potential buyers to induce investments and conceal the precarious financial status of the company, including millions of dollars of employment tax that he diverted from the U.S. Treasury,” said Principal Deputy Assistant Attorney General Ciraolo. “Due to the extraordinary work of the prosecutors and agents on this case, we were able to unravel this multi-layered scheme and today hold Potarazu accountable for his criminal conduct.”
“For years Potarazu enriched himself by abusing the trust of his company’s many investors and stealing millions of dollars from them through a complex scheme of fraud and deceit, said U.S. Attorney Boente. “This case is a prime example of this office’s ongoing commitment to bringing white-collar criminals to justice.”
“Throughout nearly a decade of deceit, Sreedhar Potarazu not only defrauded his investors, but also the American tax system,” said IRS-CI Chief Weber. “Motivated by pure greed, Potarazu created an elaborate scheme to hide his stolen funds and evade paying his employment tax liability. Today’s plea should serve as a stark reminder that criminals, such as Potarazu, will be held accountable for their misdeeds.”
“The FBI’s investigation into Sreedhar Potarazu’s multi-million scheme to defraud VitalSpring’s shareholders serves as a continued affirmation of our commitment to investigate and expose financial fraud,” said Assistant Director in Charge Abbate. “The FBI and our law enforcement partners will continue to pursue and bring to justice those who engage in criminally deceitful business practices.”
Scheme to Defraud
From VitalSpring’s inception, but specifically from 2009 to the present, Potarazu solicited investments through in-person meetings, emails, telephone conference calls, webinars, and phone calls. From in or about 2009 through in or about 2016, Potarazu raised approximately $32 million from more than 160 victim investors.
Potarazu induced investments from shareholders by making false representations, concealing material facts, and telling deceptive half-truths about VitalSpring’s financial condition, tax compliance, and alleged imminent sale. Potarazu also caused someone to pose as a representative of a prospective buyer on shareholder conference calls to add legitimacy to his claims regarding VitalSpring’s imminent sale.
VitalSpring had not generated a profit since 2009. Nonetheless, Potarazu falsely represented to shareholders that VitalSpring’s financial position and profitability was improving from 2009 to 2015, and that VitalSpring had millions of dollars in cash reserves. To support his scheme, Potarazu presented fake bank statements to some shareholders that showed inflated balances.
Potarazu also concealed from shareholders that VitalSpring owed substantial employment tax to the IRS. Potarazu provided or caused to be provided false corporate income tax returns to some shareholders that overstated VitalSpring’s income and omitted the accruing employment tax liability.
In November 2014, Potarazu created a Special Review Committee (SRC) in response to a lawsuit filed in Delaware by shareholders that claimed Potarazu misled the victim investors about VitalSpring’s finances, the status of the impending sale, and Potarazu’s compensation. Potarazu provided the SRC with false financial records, fake tax returns, and fake bank statements to induce the SRC to believe that VitalSpring was financially healthy and to cause the SRC to make materially false representations to the Delaware court and victim investors. He also falsely represented that the alleged imminent sale would yield substantial returns to the shareholders, and used this to induce additional investments. Members of the SRC traveled interstate to the Eastern District of Virginia to attend meetings in which Potarazu presented false information for their review.
In truth, there was no imminent sale pending. Potarazu provided false financial records, including fake balance sheets, fabricated bank statements, and false tax returns, to several prospective buyers, financial advisors, and investment banks. In December 2014, when he was questioned by Prospective Buyer 1 as to the accuracy and authenticity of bank records provided, Potarazu presented false or misleading emails purporting to be from a bank employee to bolster the legitimacy of the false bank records. Potarazu also presented Prospective Buyer 1 with a link to a fake website that was made to look like a website for a major national bank, and which referred Prospective Buyer 1 to VitalSpring’s false bank statements, and used a shadow, secondary email account assigned to a VitalSpring employee to provide false information to Prospective Buyer 1, thereby creating the appearance that Potarazu had not provided the information.
In October 2014, Prospective Buyer 2 informed Potarazu that it was no longer interested in VitalSpring. Nevertheless, Potarazu continued to represent to shareholders for months thereafter that there was a deal pending with Prospective Buyer 2. In March 2015 and February 2016, Potarazu organized, or caused to be organized, conference calls with shareholders to discuss the alleged sale. In advance of the calls, Potarazu obtained questions from the shareholders and used them to prepare the individual who posed as a representative of Prospective Buyer 2 for each call.
From 2011 to 2015, in addition to his salary paid by VitalSpring, Potarazu diverted a portion of the investments from the victim investors for his own personal use.
Employment Tax Fraud
Potarazu admitted that from 2007 to 2016, VitalSpring accrued employment tax liabilities of more than $7.5 million. Potarazu withheld taxes from VitalSpring employees’ wages, but failed to fully pay over the amounts withheld to the IRS. As CEO and President of VitalSpring, Potarazu was a “responsible person” obligated to collect, truthfully account for, and pay over VitalSpring’s employment taxes. Ultimate and final decision-making authority regarding VitalSpring’s business activities rested with Potarazu.
Potarazu was aware of the employment tax liability as early as 2007 and, between 2007 and 2016, was frequently apprised of VitalSpring’s employment tax responsibilities by his employees. In addition, IRS special agents interviewed Potarazu in 2011 and informed him of the employment tax liability. In all but one quarter between the first quarter of 2007 and the last quarter of 2011, as well as the second and third quarters of 2015, Potarazu failed to file VitalSpring’s Employer’s Quarterly Federal Tax Return (Forms 941) with the IRS. Potarazu also failed to pay over any of the employment tax withheld from VitalSpring’s employees’ wages in all but one quarter between the second quarter of 2007 and the third quarter of 2011, as well as the third and fourth quarters of 2015.
Between 2008 and 2015, instead of paying over employment tax, Potarazu caused VitalSpring to make millions of dollars of expenditures, including thousands of dollars in transfers to himself and others, the publication of his book, “Get Off the Dime,” a sedan car service, and travel.
U.S. District Court Judge T.S. Ellis III scheduled sentencing for March 3, 2017. Potarazu faces a statutory maximum sentence of 10 years in prison for inducing interstate travel to commit a fraud and five years in prison for failing to account for and pay over employment taxes, as well as a period of supervised release, forfeiture, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Boente commended special agents of IRS-CI and the FBI, who conducted the investigation, and Assistant Chief Caryn Finley and Trial Attorney Jack Morgan of the Tax Division, and Assistant U.S. Attorney Jack Hanly, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
CEO of Virginia Health Care Technology Company Pleads Guilty to $30 Million Shareholder Fraud and $7.5 Million Employment Tax FraudRead the Press Release
ALEXANDRIA, Va. – Sreedhar Potarazu, 51, of Potomac, Maryland pleaded guilty today to charges of inducing interstate travel to commit a fraud and failing to account for and pay over employment taxes.
“For years Potarazu enriched himself by abusing the trust of his company’s many investors and stealing millions of dollars from them through a complex scheme of fraud and deceit, said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “This case is a prime example of this office’s ongoing commitment to bringing white-collar criminals to justice.”
According to the statement of facts filed with the plea agreement, Potarazu was an ophthalmic surgeon who was licensed in Maryland and Virginia, founded in or about September 2000, VitalSpring Technologies Inc. (VitalSpring), a Delaware corporation. VitalSpring operated in McLean, Virginia and provided data analysis and services relating to health care expenditures. In or around the end of 2015, VitalSpring started doing business as Enziime, LLC, a Delaware corporation. From its inception, Potarazu was VitalSpring’s Chief Executive Officer, President, and served as a member of the Board of Directors.
Beginning in or around 2009, Potarazu provided materially false and misleading information to VitalSpring’s shareholders to induce more than $30 million in capital investments in the company. Potarazu represented to VitalSpring shareholders on numerous occasions that VitalSpring’s sale was imminent, which would have resulted in profits for shareholders, and also concealed from shareholders that VitalSpring failed to account for and pay over more than $7.5 million in employment taxes to the Internal Revenue Service (IRS).
“Sreedhar Potarazu viewed himself as above the law – deliberately defrauding investors and stealing from the U.S. Treasury – and with today’s guilty plea, he is held accountable for his criminal conduct,” said Principal Deputy Assistant Attorney General Ciraolo. “Like other individuals who willfully ignore their employment tax obligations, Potarazu faces incarceration and substantial monetary penalties. The department will continue to work with its partners within the IRS to identify and prosecute these offenders.”
Scheme to Defraud
From VitalSpring’s inception, but specifically from 2009 to the present, Potarazu solicited investments in VitalSpring from investors and shareholders by way of in-person meetings, emails, telephone conference calls, webinars, and phone calls. From in or about 2009 through in or about 2016, Potarazu raised approximately $32 million from more than 160 victim investors.
Potarazu induced investments from shareholders by making false representations, concealing material facts, and telling deceptive half-truths about VitalSpring’s financial condition, tax compliance, and alleged imminent sale.
Potarazu falsely represented to shareholders that VitalSpring’s financial position and profitability was improving from 2009 to 2015 and that VitalSpring had millions of dollars in cash reserves. Since 2009, VitalSpring never generated a profit. To substantiate the false statements concerning the bank account balances, Potarazu presented fake bank statements to some shareholders that showed inflated balances.
Potarazu also concealed from shareholders that VitalSpring owed substantial employment tax to the IRS. Potarazu provided or caused to be provided false corporate income tax returns to some shareholders that overstated VitalSpring’s income and omitted VitalSpring’s accruing employment tax liability.
In November 2014, Potarazu created a Special Review Committee (SRC) in response to a lawsuit filed by shareholders in Delaware that claimed Potarazu misled the victim investors about VitalSpring’s finances, the status of VitalSpring’s impending sale, and Potarazu’s compensation. Potarazu provided the SRC with false financial records, fake tax returns, and fake bank statements to induce the SRC to believe that VitalSpring was financially healthy and to cause the SRC to make materially false representations to the Delaware court and victim investors. Members of the SRC traveled interstate to the Eastern District of Virginia to attend meetings in which Potarazu presented false information for their review.
Potarazu also falsely represented to VitalSpring shareholders that the company was going to be sold imminently, and in at least one instance, that a deal was in place. Potarazu falsely represented that a sale of VitalSpring would yield substantial returns to its investors.
In truth, VitalSpring was never going to be imminently sold. Potarazu provided false financial records, including fake balance sheets, fabricated bank statements, and false tax returns to several prospective buyers, financial advisors, and investment banks. When Potarazu was questioned in December 2014 by Prospective Buyer 1 as to the accuracy and authenticity of bank records provided, Potarazu then presented Prospective Buyer 1 with false or misleading emails purporting to be from a bank employee in order to bolster the legitimacy of the false bank records. Potarazu also presented Prospective Buyer 1 with a fake website that was made to look like a website for a major national bank, and a link to this website, which referred Prospective Buyer 1 to VitalSpring’s false bank statements. Additionally, Potarazu used a shadow, secondary email account for one of VitalSpring’s legitimate employees, to provide false information to Prospective Buyer 1, thus creating the appearance that Potarazu himself had not provided the information.
In October 2014, Prospective Buyer 2 informed Potarazu that it was no longer interested in VitalSpring. Potarazu continued to represent to shareholders for months afterwards that there was a still a pending deal with Prospective Buyer 2. In March 2015 and February 2016, Potarazu organized, or caused to be organized, conference calls to confirm the existence of the sale of the company. A different shareholder spoke on each call with a purported representative of Prospective Buyer 2. In advance of the calls, Potarazu asked the shareholders to give him a list of questions they intended to ask the buyer. Potarazu caused an individual to pose as the purported representative of Prospective Buyer 2 on these conference calls.
From 2011 to 2015, in addition to his salary paid by VitalSpring, Potarazu diverted a portion of the investments from the victim investors for his own personal use.
Employment Tax Fraud
Potarazu admitted that from 2007 to 2016, VitalSpring accrued an employment tax liability of more than $7.5 million. As CEO and President of VitalSpring, Potarazu was a “responsible person” obligated to collect, truthfully account for, and pay over VitalSpring’s employment taxes. Ultimate and final decision-making authority regarding VitalSpring’s business activities rested with Potarazu.
Potarazu was aware of the employment tax liability as early as 2007 and, between 2007 and 2016, was frequently apprised of VitalSpring’s payroll tax responsibilities by his employees. In addition, IRS special agents interviewed Potarazu in 2011 and informed him of the employment tax liability. In all but one quarter between the first quarter of 2007 and the last quarter of 2011, as well as the second and third quarters of 2015, Potarazu failed to file VitalSpring’s Employer’s Quarterly Federal Tax Return (Forms 941) with the IRS. In all but one quarter between the second quarter of 2007 and the third quarter of 2011, as well as the third and fourth quarters of 2015, Potarazu failed to pay over any tax withheld from wages of VitalSpring’s employees.
Between 2008 and 2015, instead of paying over employment tax, Potarazu caused VitalSpring to make millions of dollars of expenditures, including thousands of dollars in transfers to himself and others, the publication of Potarazu’s book called, “Get Off the Dime,” a sedan car service, and travel.
Potarazu faces a maximum penalty of 10 years in prison sentenced on March 3, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, made the announcement after the plea was accepted by U.S. District Court Judge T.S. Ellis, III. Assistant U.S. Attorney Jack Hanly and Assistant Chief Caryn Finley and Trial Attorney Jack Morgan of the Tax Division are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-261.
Burke Woman Sentenced for Role in Multiple Armed RobberiesRead the Press Release
ALEXANDRIA, Va. – Ariel Monet-Viola Long, 22, of Burke, was sentenced today to 138 months in prison for robbery and discharging a firearm during a crime of violence.
Long pleaded guilty on July 19. According to court documents, from Dec. 24, 2015 to May 9, 2016, Long’s boyfriend, Larry Pyos, Jr., used a handgun to rob at least six commercial establishments in northern Virginia: Good Fortune Supermarket, Shri Krishna Grocery, Dollar Power Store, Ding How Carry-Out, Hong Kong Palace, and Subway, in addition to robbing a man on the street outside of the Laze Café in Falls Church. Long lived with Pyos, was aware he was committing armed robberies, and purchased the handguns Pyos used to commit each crime. On multiple occasions Long acted as Pyos’ getaway driver.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI's Washington Field Office; and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Michael Rich and Tyler McGaughey prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-150.
Buffalo Man Charged with Gun CrimeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Jesse Lewis, 46, of Buffalo, NY, was arrested and charged by criminal complaint with being a felon in possession of a firearm. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Patricia Astorga who is handling the case, stated that according to the complaint, on September 30, 2016, Buffalo Police Officers, with the assistance of Lackawanna Police Officers, executed a search warrant at Lewis’s residence at 234 North Ogden Street in Buffalo. During the search, officers recovered a Harrington and Richardson Arms Company .32 caliber revolver which was loaded with six rounds of ammunition. Officers also recovered cocaine and drug paraphernalia.
The defendant made an initial appearance this morning before U.S. Magistrate Judge Michael J. Roemer and is being detained.
The criminal complaint is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Lackawanna Police Department, under the direction of Chief James Michel.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Buffalo Man Arrested, Charged with Selling Deadly Heroin Mixture That Resulted in A DeathRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy, Jr. announced today that Aaron J. McDuffie, aka “G”, 21, of Buffalo, NY, was arrested and charged by criminal complaint with distribution of heroin and butyryl fentanyl causing serious bodily injury and death and possession with intent to distribute, and distribution of, butyryl fentanyl. If convicted of causing serious bodily injury or death, the defendant faces a mandatory minimum penalty of 20 years in prison, a maximum of life, and a $1,000,000 fine.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that according to the complaint, on June 27, 2015 at approximately 10:08 p.m., the Cheektowaga Police and the Forks Volunteer Fire Company responded to a possible drug overdose at an address in Cheektowaga. CPR and Narcan were administered to an individual identified as A.E. who was then transported to the hospital. A.E. did not recover and died on July 1, 2015. The Erie County Medical Examiner's Office determined the cause of death was acute combined butyryl fentanyl and morphine intoxication.
The complaint further states that during the subsequent investigation a family member gave Cheektowaga Police investigators A.E.’s cell phone which contained incriminating text messages regarding from whom A.E. may have obtained the drugs that killed him. Specifically, the cell phone included the following series of outgoing and incoming texts from the A.E.’s phone to a particular number on the evening he overdosed:
• Outgoing text: When are you getting that new (expletive)?
• Incoming text: Got it, Got dat new fire bro.
• Outgoing text: Where at
• Incoming text: Under Bridge
• Outgoing text: When, I got 100, where you at
The last outgoing text message was at approximately 7:32 p.m. There were also several exchanged telephone calls.
Subsequently, Cheektowaga Police investigators spoke with an individual identified as Cooperating Witness 1 (CW-1), a longtime friend of A.E. CW-1 told investigators that A.E. has been obtaining drugs from an individual known as “G.” CW-1 also stated that since A.E.'s death, G changed his telephone number. Investigators also spoke with another individual identified as Cooperating Witness 2 (CW-2), another longtime friend of A.E., who stated that CW-2 spoke with “G” since A.E.'s death and that “G” was concerned for A.E. because “G” had given A.E. some very good quality heroin and that “G” had warned A.E. to not use as much.
On November 30, 2015, an undercover Cheektowaga Police Detective (UC) arranged and conducted a purchase from McDuffie. The UC met McDuffie on Eagle Street in Buffalo and made a controlled purchase of butyryl fentanyl. Two similar undercover purchases were conducted on December 4, 2015, and February 16, 2016. Analysis once again determined that the substances purchased on those instances was butyryl fentanyl. In addition, during the course of the second purchase, McDuffie told the UC that his name was "G".
The defendant made an initial appearance before U.S. Magistrate Judge Michael J. Roemer and is being detained pending a detention hearing on December 7, 2016. During his initial appearance, the Government told the Court that McDuffie may be responsible for a second death within the last week. The results of toxicology testing are pending.
The criminal complaint is result of an investigation by the Cheektowaga Police Department, under the direction of Chief David Zack and the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent-in-Charge, New York Field Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Border Patrol Agent Arrested on Child Pornography ChargesRead the Press Release
LAREDO, Texas – A 50-year-old senior Border Patrol agent stationed in Del Rio has been taken into custody on charges of distribution of child pornography and attempting to entice a minor to engage in sexual activity, announced U.S. Attorney Kenneth Magidson.
Salvador Contreras was arrested today in Cotulla. He is expected to appear in Laredo federal court Monday morning.
According to the criminal complaint, Contreras allegedly sent numerous images depicting child pornography to an individual whom he believed was the mother of an eight-year-old girl. During those communications, he allegedly expressed his desire to engage in sexual conduct with the child and made arrangements to travel to Cotulla to do so.
Authorities arrested Contreras after he arrived there this morning.
Contreras faces a minimum of 10 years and up to life in federal prison if convicted of the enticement as well as a minimum of five and up to 20 years for the distribution of child pornography.
Customs and Border Protection - Office of Inspector General and Homeland Security Investigations conducted the investigation with the assistance of the United States Attorney’s Office for the Western District of Texas. Assistant U.S. Attorney Alfredo de la Rosa is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law
Battle Creek Man Sentenced to 10 Years in Prison for Possessing A Firearm as A FelonRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced that 38 year-old Javon Jones, of Battle Creek, was recently sentenced to the maximum possible term of 120 months in prison, following his conviction for possessing a firearm as a felon. A three-year term of supervised release will follow Jones’s prison term.
The charges against Jones stemmed from his possession of a loaded, semiautomatic pistol in the early morning hours of November 16, 2015. After shooting eight rounds from the firearm near the intersection of High St. and Willow St., Jones sped away from the scene and led Battle Creek police officers on a vehicle chase through the surrounding residential area. Jones crashed his vehicle into a utility pole, which fell on his vehicle. Jones then accelerated his car backward toward police vehicles and officers and, once freeing his vehicle from the utility pole, drove forward in an effort to continue fleeing police. Jones’s car broke down shortly thereafter, and he was placed under arrest. Nobody else was in the car with Jones. Officers recovered the loaded pistol from the floor of the passenger side of the car. The Bureau of Alcohol, Tobacco, Firearms, and Explosives traced the firearm and determined that it had been stolen from the owner’s home approximately six months earlier.
U.S. Attorney Miles commented on the danger posed by Jones: "This intense and dangerous car chase and crash followed Mr. Jones’s firing of eight shots in a residential neighborhood, across the street from a schoolyard. Thankfully, nobody was hurt that night. The 120-month sentence will undoubtedly serve to protect the public from such reckless and dangerous conduct by Mr. Jones."
Jones was prohibited from possessing firearms because of his criminal record, specifically his five prior felony convictions. Among other factors that led to the ten-year sentence, U.S. District Court Judge Robert Holmes Bell said during the hearing that the sentence was warranted in light Jones’s extensive criminal history and the seriousness of the offense in this case, particularly the danger Jones posed to the public and to police officers, as well as the damage Jones caused. "The successful prosecution of Javon Jones highlights ATF’s partnership with the Battle Creek Police department, the Michigan State Police and the United States Attorney’s Office Western District," said ATF Special Agent in Charge S. Robin Shoemaker.
END
Baton Rouge Man Sentenced to 20 Years in Federal Prison for Sextortion SchemeRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced today that Chief U.S. District Court Judge Brian A. Jackson sentenced Matthew Chaney Walker, 26, of Baton Rouge, Louisiana, to 240 months in federal prison for his scheme to extort numerous minors over the internet for the purpose of producing and receiving child pornography. WALKER was ordered to serve a 10-year term of supervised release following his release from imprisonment. WALKER was also ordered to pay $6,247.59 in restitution, a $1000 special assessment, and a $100,000 fine. At the conclusion of the sentencing, the Court ordered WALKER to begin serving his sentence immediately and remanded WALKER to the custody of the United States Marshal.
On January 7, 2016, WALKER pleaded guilty to four counts of extortion, in violation of Title 18, United States Code, Section 875(d); three counts of production of child pornography, in violation of Title 18, United States Code, Sections 2251(a) and 2; and three counts of receipt of child pornography, in violation of Title 18, United States Code, Section 2252A(a)(2). In connection with his guilty plea, WALKER admitted that, in 2014, he met young girls online for the purpose of sexually exploiting them. In order to lure his victims, WALKER pretended to be a teenage girl and used different online screen names. During chats with his victims, Walker broached the topic of trading nude and sexually explicit images. To lower his victims’ inhibitions, WALKER initiated sexually explicit conversations and sent sexually suggestive photographs of other young girls that he represented to be of himself. Once he obtained compromising pictures of his victims, WALKER then demanded that the victims send him images even more graphic than those they had already sent to him. WALKER threatened to send compromising pictures of the victims to their families, schools, friends, and the public should they refuse to comply with his demands. As a result of his conduct, WALKER’s victims created and sent child pornography to him.
U.S. Attorney Green stated: “This case provides another tragic cautionary tale for anyone concerned about the dangers posed to our children by criminals on the internet. This defendant sexually exploited his victims by extortion and psychological manipulation, often preying on children in the supposed safety of their own homes. Today’s sentence appropriately reflects the seriousness of these crimes and the need to deter others inclined to engage in similar activity. I greatly appreciate the excellent and hard work of the prosecutor and agents handling this important matter, and commend the bravery of the victims and their families in persevering through this ordeal.”
“HSI will continue to aggressively investigate and arrest the people who seek to prey on the most vulnerable in our society,” said Raymond R. Parmer Jr., Special Agent-in-Charge, New Orleans Field Office, Homeland Security Investigations. “Thanks to our efforts with our law enforcement partners we’ve ensured Walker will never again take advantage of children.”
This case is being handled jointly by the U.S. Department of Homeland Security, Homeland Security Investigations, and the United States Secret Service, with assistance from the Cyber Crime Unit and the Criminal Division of the Louisiana Attorney General’s Office; the Peterborough Police Service, a member of the Ontario Provincial Strategy to Protect Children from Sexual Abuse and Exploitation on the Internet; the Cheatham County, Tennessee Sheriff’s Office; the Naperville, Illinois Police Department; and the Ottawa County, Michigan Sheriff’s Office, among others.
This matter is being prosecuted by Assistant U.S. Attorney Cam T. Le, who serves as the Project Safe Childhood Coordinator for the Middle District of Louisiana.
These federal charges are part of Project Safe Childhood, a nationwide initiative by the U.S. 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “Resources” tab for information about Internet safety education.
Bangor Man Sentenced to 10 Years for Crack Distribution ConspiracyRead the Press Release
Contact: Joel B. Casey
Chris Ruge
Assistant United States Attorneys
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Akeen Ocean, a/k/a “A,” a/k/a “Alex” 42, of Bangor was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 10 years in prison and three years of supervised release for conspiring to distribute and possess with the intent to distribute cocaine base, commonly known as “crack.” On June 27, 2016, the defendant was convicted following a six-day jury trial.
The trial evidence revealed that the defendant joined a conspiracy that operated between January 2010 and August 2013 and that acquired crack cocaine in New Haven, Connecticut and brought it into the Bangor area where it was distributed through a network of New Haven dealers staying in the Bangor area and local residents. Proceeds of the sales were transported back to New Haven and used to purchase, among other things, more crack cocaine to send to Bangor. Members of the conspiracy from New Haven included members of the Red Side Guerilla Brims, a violent street gang affiliated with the Almighty Blood Nation, a national street gang. Ocean was held responsible for 780 grams of crack distributed during his involvement in the conspiracy.
The case was investigated by the Maine Drug Enforcement Agency; the New Haven Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the New Haven Department of Police Services. Assistant U.S. Attorneys Robert Spector and Peter Markle of the U.S. Attorney’s Office for the District of Connecticut also assisted in the investigation and prosecution of this case.
Thursday 1 December 2016
Youngstown man faces federal firearms and drug chargesRead the Press Release
A federal grand jury returned a four-count indictment charging Rashad Mathews, 28, of Youngstown, with drug trafficking and firearms violations, U.S Attorney Carole S. Rendon said.
Mathews possessed a Ruger, model 10/22, .22 caliber rifle and ammunition on April 15, 2015. On Dec. 1, 2015, Mathews possessed a Norinco, model 213, 9mm pistol; a Kahr Arms, model CW9, 9mm pistol; a Raven Arms, model MP-25, .25 caliber pistol; and a Raven Arms, model P-25, .25 caliber pistol. He had these firearms despite a 2007 felony conviction in Mahoning County Common Pleas Court in 2007, according to the indictment.
Mathews distributed marijuana on June 4, 201 and on December 1, 2015, he possessed with the intent to distribute marijuana, according to the indictment.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
West Palm Beach Man Ordered to Pay $1 Million in Restitution to United States Coast GuardRead the Press Release
On November 29, 2016, a West Palm Beach man was ordered to repay $1 million to the United States Coast Guard for communicating a false distress call.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Rear Admiral Scott Buschman, United States Coast Guard, District 7, made the announcement.
Richard Ohrn, 46, pled guilty to willfully communicating a false distress message to the United States Coast Guard, causing the Coast Guard to attempt to save lives and property when no help was needed, in violation of Title 14, United States Code, Section 88(c).
According to court records, Ohrn rented a recreational vessel on March 31, 2015, before abandoning it at sea. The vessel was later discovered by a concerned boater, who spotted several patches of blood and a broken pair of eyeglasses onboard. The United States Coast Guard was notified and launched a search and rescue effort over a three-day period. The search utilized both air and sea assets, and cost over $1 million. The investigation revealed that while the Coast Guard was searching for Ohrn he fled to Georgia, where he hid in an unfurnished apartment before returning to the West Palm Beach area on April 12, 2015.
Ohrn was sentenced to a year of probation and was ordered to pay $1 million in restitution to the Coast Guard.
Mr. Ferrer commended the investigative efforts of the United States Coast Guard, United States Coast Guard Investigative Service, and the Palm Beach Sheriff’s Office. This case was prosecuted by Special Assistant U.S. Attorney Jeremy McCall.
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.
Waterloo Man Sentenced to 5 Years for Receiving Child PornographyRead the Press Release
A man who received child pornography was sentenced today to 5 years in federal prison.
Forrest Rindels, age 60, of Waterloo, Iowa, received the sentence after an April 28, 2016 guilty plea to one count of receipt of child pornography. At the plea hearing, Rindels admitted that, between 2001 and 2015, he knowingly received child pornography.
Rindels was sentenced in Cedar Rapids by United States District Court Judge Mark W. Bennett. Rindels was sentenced to 60 months’ imprisonment. A special assessment of $100 was imposed, Rindels was ordered to pay a $1,000 fine, and he must also serve a 7-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Iowa Division of Criminal Investigation, the Waterloo Police Department, and the Cedar Rapids Police Department.
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 16-2006.
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Warren County Man Sentenced for Transporting a Minor Across State LinesRead the Press Release
St. Louis, MO – Christopher Schroeder was sentenced to 15 years in prison on charges of transporting a minor across state lines to engage in criminal sexual activity.
According to court documents, in late October 2015 or early November 2015, Schroeder met a 15-year-old female through KIK, an internet chat forum, who was living in Brooklyn, Ohio. Schroeder drove to Brooklyn and picked her up at an agreed upon location, and drove them to his residence in Marthasville, MO. Sometime after arriving at his home, he engaged in sexual intercourse with her, and he recorded two of the sex acts without her knowledge.
Schroeder, Marthasville, MO, pled guilty in July to one felony count of transportation of a minor with intent to engage in criminal sexual activity. He appeared today for sentencing before United States District Judge Henry Autrey.
This case was investigated by the Federal Bureau of Investigation, the Brooklyn Police Department, St. Charles County Internet Crimes Against Children Task Force and the Warren County Sheriff’s Department. Assistant United States Attorney Colleen Lang handled the case for the U.S. Attorney’s Office.
Virginia Electrician Sentenced to Prison for Obstructing Administration of Internal Revenue LawsRead the Press Release
A Cumberland, Virginia resident was sentenced today to 24 months in prison for his involvement in a scheme to evade paying his federal income taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney John P. Fishwick Jr. of the Western District of Virginia.
According to court documents, Richard Alex, 52, a self-employed low-voltage electrician, had not filed a timely or valid tax return in more than a decade. For tax years 1998 and 2000 through 2003, Alex filed false individual income tax returns reporting no income. Alex also failed to file individual income tax returns for 2004 through 2013, despite receiving numerous warnings and notices from the Internal Revenue Service (IRS). In response to IRS collection efforts, Alex attempted to conceal his assets and income. For example, beginning in 2004, he used nominee bank accounts to receive income he earned from dispatch companies. Alex also provided false information to a tax return preparer for the purpose of preparing federal tax returns for Alex’s nominee entity, Cole Data Services.
Alex pleaded guilty in July to one count of corruptly endeavoring to impede and obstruct the administration of the internal revenue laws. In addition to the prison term imposed, Alex was ordered to serve one year of supervised release and to pay restitution in the amount of $809,707 to the IRS.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Fishwick commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Sean Beaty of the Tax Division and Assistant U.S. Attorney C. Patrick Hogeboom, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Virginia Electrician Sentenced for Obstructing Administration on IRS LawsRead the Press Release
LYNCHBURG, VIRGINIA – A Cumberland, Virginia resident, who previously pled guilty to one count of corruptly endeavoring to impair and impede the due administration of the internal revenue laws, was sentenced today in the United States District Court for the Western District of Virginia in Lychburg, announced United States Attorney John P. Fishwick Jr.
Richard Alex, 52, of Cumberland, Va., a self-employed low-voltage electrician, admitted that he did not file a timely or valid tax return for more than a decade. For tax years 1998 and 2000 through 2003, Alex filed a tax return on which he falsely claimed that he had not earned any income. Alex failed to file any tax returns for the 2004 through 2013 tax years, despite receiving income above the filing threshold each year, as well as numerous warnings and notices from the Internal Revenue Service (IRS).
Today in U.S. District Court in Lynchburg, Alex was sentenced to one year of supervised release and ordered to pay restitution in the amount of $809,707.
“It is our duty to ensure that all citizens pay their fair share of taxes,” United States Attorney Fishwick said today. “We will continue to work with our partners at the Tax Division and the IRS to hold accountable those who attempt to defraud our tax system.”
According to court documents, Alex attempted to conceal his assets and income to prevent the IRS from collecting his unpaid taxes. Starting in 2004, Alex used bank accounts held in the names of nominees to receive income he earned from dispatch companies for subcontract work. Alex also provided false information to a tax return preparer for the purpose of preparing federal tax returns for Alex’s nominee business, Cole Data Services.
Alex’s sentencing hearing is scheduled for Oct. 5. He faces a statutory maximum sentence of three years in prison. Alex also faces financial penalties and a term of supervised release.
The investigation of the case was conducted by Internal Revenue Service-Criminal Investigation. Assistant United States Attorney C. Patrick Hogeboom III and Trial Attorney Sean Beaty of the Tax Division prosecuted the case for the United States.
United States Attorney Announces Successful Heroin and Opioid Response SummitRead the Press Release
Urges Collaborative Solutions and New Ideas to Combat the Explosion in Heroin and Opioid Addiction
LOUISVILLE, Ky. – United States Attorney John E. Kuhn Jr., in conjunction with Timothy J. Plancon, Special Agent in Charge of the U.S. Drug Enforcement Administration’s (DEA) Detroit Field Division, and Toni Ganzel, M.D., M.B.A., Dean of the University of Louisville School of Medicine, today announced the successful completion of their first Heroin and Opioid Response Summit. The one-day event was attended by more than 300 industry professionals focused on developing collaboration across every public sector combatting heroin and opioid abuse; one of Metro-Louisville’s most urgent, destructive and widespread challenges.
United States Attorney John Kuhn emphasized, “Important and effective work is already being done to address this crisis, but we must do more. Today’s Summit brought together stakeholders to collaborate on a broad spectrum of solutions. We hope these discussions serve as a springboard for all of us to pursue new initiatives and proven interventions to help addicts, prevent new addictions and stop the illegal trafficking.”
Speakers included Mark S. Jorrisch, M.D., a leading authority on the science of addiction, treatment and recovery; Captain Juan Colon, who developed a statewide illicit drug information sharing program with public health and public safety partners in New Jersey; Dr. Robert L. DuPont, the former head of the National Institute of Drug Abuse and the second White House Drug Chief who emphasized how the criminal justice system can promote effective treatment of addiction; and nationally known speaker Ivana Grahovac, whose professional work and personal journey both speak to a more compassionate approach to supporting recovering addicts.
The event incorporated panel discussions, led by experts in public health, prevention and education; first responders and law enforcement; and treatment and recovery disciplines. Each shared their experiences with the pernicious effects of opioid and heroin addiction and frankly discussed local efforts, challenges, gaps, and potential areas for improvement.
During the day-long conference, the audience listened to more than 30 speakers and panelists including presentations on the Drug Enforcement Administration’s DEA 360 Strategy, and supporting efforts of the Community Anti-Drug Coalitions of America (CADCA).
“Special Agent in Charge Timothy J. Plancon stated, "Today's Summit is our latest effort as part of the DEA 360 Strategy to find new and innovative ways to address the opioid addiction epidemic and the drug trafficking it produces. By bringing together subject matter experts from prevention, treatment, recovery, and law enforcement, we are striving to find multiple pathways to reduce all opioid abuse in Louisville and the surrounding communities."
"The Heroin and Opioid Response Summit is a critical step in addressing this devastating epidemic that knows no geographic, economic or societal boundaries because it unites several sectors of the Louisville community to collaborate on developing unique solutions and partnerships," said General Arthur T. Dean, Chairman and CEO, CADCA. "CADCA is proud to join U.S. Attorney for the Western District of Kentucky John E. Kuhn, Jr. and the Drug Enforcement Administration in this effort."
The capacity room attendance at the Kornhauser Auditorium, located on the campus of the University of Louisville School of Medicine, demonstrated the understanding that heroin abuse in Metro-Louisville is not just a law enforcement problem, but a widespread epidemic impacting all facets of our community. Nationally we lose one person every 20 minutes to overdoses and in Jefferson County we had 183 overdose deaths in the first six months of 2016 – one life each day. According to Dean Toni Ganzel, the University of Louisville School of Medicine is doing more to educate physicians about the pain management strategies that minimize the dangers of opioid addiction.
“The science surrounding pain management and the use of opioid painkillers has evolved over the years,” Dean Ganzel said. “We are working diligently to teach our new health care providers, as well as our life-long learners, the new approaches to pain management. Additionally, we are working hard to educate people on the proper use of Naloxone so that they are able to reverse the effects of an opioid overdose with the goal of eventually getting patients into treatment to break the addiction.”
U.S. Attorney Kuhn concluded, “Today’s Summit is intended as only one step on the long march to better, broader, stronger strategies and interventions. Tomorrow we will continue to work together, remaining united by the common goal of ending the scourge of heroin and opioids. Only by working together will we turn back this terrible tide and help our community heal.”
U.S. Attorney’s Office Issues Opioid Strategy to Combat Heroin Epidemic in the Middle DistrictRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that it issued a district specific opioid strategy to address the prescription opioid and heroin epidemic plaguing our nation and the Middle District of Pennsylvania. United States Attorney Bruce D. Brandler stated, “more Americans now die every year from drug overdoses than they do in motor vehicle crashes or homicides and Pennsylvania has the eighth highest rate of overdose deaths in the United States. Our office is committed to doing everything we can to address this growing problem.”
On September 21, 2016, the Department of Justice issued its national strategy to combat the rising public health challenges caused by the abuse of prescription opioids and the concomitant heroin epidemic engulfing our nation. Although prescription opioid and heroin abuse is a national problem that requires a national strategy, the Department of Justice recognizes that its efforts must be tailored to the needs of each region and implemented by those who know their communities best. Accordingly, the opioid strategy memorandum issued today is the Middle District’s strategy to combat this epidemic.
According to United States Attorney Bruce D. Brandler, the Middle District’s strategy rests on three interrelated pillars: prevention, enforcement and treatment. In the area of prevention, the U.S. Attorney’s Office will continue its efforts to raise public awareness by developing a community education plan which will not only incorporate some of the office’s prior community outreach activities (such as the heroin and prescription drug symposium held on September 19, 2016) but will also add new features such as creating a formal multi-media presentation highlighting the dangers and warning signs of opioid abuse and offer tangible solutions. The presentations will be made throughout the Middle District by experienced prosecutors, law enforcement officers, medical professionals and other appropriate individuals to schools, businesses, civic organizations, and prisoners soon to be released into the community
In the area of enforcement, United States Attorney Brandler stated, “opioid cases, particularly opioid cases resulting in death, will take the highest priority and such cases will be prosecuted aggressively to ensure maximum deterrence. This not only includes prosecuting the members of drug trafficking organizations but also includes rogue health care providers, pharmacists and pharmaceutical employees who contribute to the available supply and overuse of prescription opioid painkillers.”
In the area of treatment, United States Attorney Brandler stated, “we will coordinate with our federal, state and local law enforcement partners to identify individuals most in need of treatment and direct those individuals to appropriate treatment providers and facilities at the earliest time.”
Gary Tuggle, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division stated, “in addition to our investigations and enforcement actions against drug traffickers responsible for the illegal diversion of prescription opioids and distribution of heroin, awareness, prevention, and ready access to treatment are equally as important in addressing this public health crisis. 3,383 people died across Pennsylvania last year from drug overdoses, the majority of which were attributable to heroin and opioids. The DEA looks forward to working closely with U.S. Attorney Brandler and his office on this strategy to address this epidemic.”
Michael Harpster, Special Agent in Charge of the FBI’s Philadelphia Division stated, “every day, the FBI and our law enforcement partners are working to disrupt the supply chain that feeds this heroin and opioid epidemic. Despite significant success, the demand for these drugs continues unabated. Only through a strong, concerted effort will we gain any ground in this fight, by both targeting traffickers and raising public awareness about addiction, treatment, and prevention.”
Details concerning the Middle District’s opioid strategy can be found in the memorandum itself which is attached to this news release.
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Two Men Sentenced for Sex TraffickingRead the Press Release
BOSTON – A Brockton man and a Boston man were sentenced in U.S. District Court in Boston for sex trafficking.
Kwamaine J. Wells, 27, of Brockton, was sentenced today by U.S. District Court Judge Denise J. Casper to 135 months in prison and five years of supervised release. Akil J. DeCoteau, 28, of Boston, was sentenced yesterday by Judge Casper to 18 months in prison and five years of supervised release. In September 2016, Wells and DeCoteau pleaded guilty to conspiracy and transportation of an individual with intent to engage in prostitution.
Between April 2013 and February 2014, Wells transported four women between Maine, Massachusetts and New York with the intent that they engage in prostitution, and used force and threats to coerce two of the women to work around the clock as prostitutes for him. Wells sought out women who were specifically vulnerable, due to either estrangement from family or drug addiction, and recruited them to work as prostitutes for his sole financial benefit by promising them a lavish lifestyle or access to drugs. Wells rented hotel rooms and posted advertisements online offering sex with the women for a fee. Wells charged men between $100 and $200 to have sex with the women, and kept all of the money. Wells also withheld drugs from the women if they did not earn enough money from prostitution.
Wells also conspired with DeCoteau to transport women between Massachusetts, New Jersey and New York with the intent that they engage in prostitution. In January 2014, DeCoteau recruited a woman he knew to be addicted to drugs to work for him as a prostitute, offering her food, shelter and drugs in exchange. Over a two-week period, DeCoteau prostituted the woman in hotels in Maine, Massachusetts and New York. In each location, DeCoteau posted advertisements online offering sex with the woman for a fee, and then kept the money she received.
United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorneys Miranda Hooker and Leah Foley of Ortiz’s Civil Rights Enforcement Team prosecuted the case.
Two Maryland MS-13 Members Sentenced to Life in Federal Prison for Racketeering Conspiracy Including MurderRead the Press Release
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Juan Alberto Ortiz-Orellana, aka “Chele” and “Furia,” age 28, of District Heights, Maryland; and Minor Perez-Chach, aka “Minor Chach-Perez,” “Little Bad” and “Bryant Sacarias,” age 25, of Hyattsville, Maryland, today to life in prison. On May 20, 2016, Ortiz-Orellana and Perez-Chach were convicted of multiple charges in connection with their MS-13 gang activities, including conspiracy to participate in a racketeering enterprise, murder in aid of racketeering and related firearm charges. Ortiz-Orellana was also convicted of conspiracy to commit murder in aid of racketeering.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Hank Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; and Montgomery County State’s Attorney John McCarthy.
MS-13 is a national and transnational gang composed primarily of immigrants or descendants from El Salvador. Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Prince George’s County, Montgomery County, and Frederick County, Maryland. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
According to evidence presented at trial, from at least 2009 through October 2014, MS-13 members planned and committed murders, attempted murders, assaults, and robberies in Prince George’s, Montgomery, and Frederick Counties. Gang members also extorted brothel operators and owners of other illegal businesses and tampered with and retaliated against witnesses, among other crimes.
According to the trial evidence, in January 2013, co-defendant Jorge Moreno-Aguilar and Ortiz-Orellana, both members of the MS-13 Sailors Locotes Salvatrucha Westside Clique, targeted an individual associated with the rival 18th Street gang, obtained photographs of the victim from Facebook and conspired to murder him with other members of MS-13. On March 12, 2013, Moreno-Aguilar and Ortiz-Orellana went to Capitol Heights, Maryland, and shot the victim multiple times outside his home, killing him.
In addition, trial evidence showed that on February 23, 2013, Perez-Chach, who was a member of the MS-13 Langley Park Salvatrucha (LPS) Clique, followed a man whom he believed to be a member of MS-13 who had testified against MS-13 members in federal trials in Greenbelt, Maryland. In fact, the evidence showed that the victim was not the witness from the previous MS-13 trials. Perez-Chach stabbed the victim to death in his home while another member of MS-13 attacked the victim with a machete. During his arrest on May 20, 2013, Perez-Chach also illegally possessed a firearm and ammunition.
Jorge Moreno-Aguilar, age 23, of District Heights, Maryland, was convicted of conspiracy to participate in a racketeering enterprise, murder in aid of racketeering and conspiracy to commit murder in aid of racketeering. Moreno-Aguilar is scheduled to be sentenced on January 31, 2017.
Fourteen of the 15 defendants charged in this investigation have been convicted for their roles in the racketeering conspiracy. The final defendant is a fugitive.
United States Attorney Rod J. Rosenstein commended HSI Baltimore, Prince George’s County and Montgomery County Police Departments, and Prince George’s and Montgomery Counties State’s Attorney’s Offices for their work in the investigation and proceedings. Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau and Lindsay Eyler Kaplan as well as Trial Attorney Catherine K. Dick with the Justice Department’s Organized Crime and Gang Section, who are prosecuting the case, and recognized former OCGS Trial Attorney Kevin Rosenberg who assisted in the prosecution.
Two MS-13 Members Sentenced to Life in Prison for Racketeering Conspiracy Including MurderRead the Press Release
Two Maryland gang members were sentenced today to life in prison for conspiring to participate in racketeering activities and committing murders on behalf of the racketeering enterprise known as La Mara Salvatrucha, or MS-13.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Rod J. Rosenstein of the District of Maryland; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Baltimore Field Office; Chief Hank Stawinski of the Prince George’s County, Maryland, Police Department; Chief J. Thomas Manger of the Montgomery County, Maryland, Police Department; and Prince George’s County State’s Attorney Angela D. Alsobrooks made the announcement.
Juan Alberto Ortiz-Orellana, aka Chele and Furia, 28, of District Heights, Maryland, and Minor Perez-Chach, aka Minor Chach-Perez and Little Bad and Bryant Sacarias, 25, of Hyattsville, Maryland, were each sentenced to life in prison by U.S. District Judge Roger W. Titus of the District of Maryland. Ortiz-Orellana and Perez-Chach were convicted by a jury on May 20, 2016 for conspiracy to participate in a racketeering enterprise, murder in aid of racketeering and related charges. Ortiz-Orellana was also convicted of conspiracy to commit murder in aid of racketeering.
MS-13 is a national and transnational gang that operates in the United States and Central America. Members engage in racketeering activity including murder, narcotics distribution, extortion, robberies, obstruction of justice and other crimes.
According to evidence presented at trial, a number of small MS-13 groups, or cliques, operate in the Washington, D.C., area and have frequent contact with MS-13 leadership in El Salvador. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
Trial evidence demonstrated that, from at least 2009 through October 2014, MS-13 members planned and committed murders, attempted murders, assaults and robberies in Prince George’s, Montgomery and Frederick Counties, as well as extorted brothel operators and owners of other illegal businesses and tampered with and retaliated against witnesses, among other crimes.
Evidence at trial further demonstrated that in January 2013, Ortiz-Orellana and another member of the MS-13 Sailors Locotes Salvatrucha Westside Clique, targeted an individual associated with the rival 18th Street gang, obtained photographs of the victim and conspired to murder him with other members of MS-13. On March 12, 2013, Ortiz-Orellana and the other gang member went to Capitol Heights, Maryland, and shot the victim multiple times outside his home, killing him.
According to the trial evidence, in the early morning hours of Feb. 23, 2013, Perez-Chach met a man whom he believed to be a member of MS-13 who had testified against MS-13 members in federal trials. In fact, the victim was not the witness from the previous MS-13 trials, according to trial evidence. Perez-Chach followed the victim to his home in Hyattsville, where he stabbed the victim to death while another member of MS-13 attacked the victim with a machete, trial evidence demonstrated. Evidence presented at trial showed that during his arrest on May 20, 2013, Perez-Chach was found to be in illegal possession of a firearm and ammunition.
Nine of the 15 defendants charged in this investigation have pleaded guilty to their roles in the racketeering conspiracy. Five defendants total have been convicted at trial, and one remains a fugitive of justice.
HSI Baltimore, Prince George’s County Police Department, Montgomery County Police Department, Prince George’s County State’s Attorney’s Office and Montgomery County State’s Attorney’s Office investigated the case. Trial Attorney Catherine K. Dick of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys William D. Moomau and Lindsay Eyler Kaplan of the District of Maryland are prosecuting the case. Former OCGS Trial Attorney Kevin Rosenberg assisted in the prosecution of this case.
Triad Residents Sentenced on Drug Trafficking and Money Laundering ChargesRead the Press Release
GREENSBORO, N.C. – Six members of a marijuana distribution and money laundering organization that operated in Alamance, Guilford, and Wake Counties were sentenced on drug trafficking and money laundering charges, announced Ripley Rand, United States Attorney for the Middle District of North Carolina.
As of November 28, 2016, five defendants - Nilanh Chanthaphavong, Davone Chanthaphavong, Marcus Emmanuel Parrish, Phadthin Sihavong, and Vanhasy Manhvong – had been sentenced by United States District Court Judge Catherine C. Eagles. A sixth defendant, Eugene Ari McAdoo, was sentenced by United States District Court Judge Thomas D. Schroeder on August 30, 2016.
According to court records, Phadthing Sihavong used the United States Postal Service to ship pounds of marijuana in overnight packages from Fresno, California, to co-conspirators in the Middle District of North Carolina. The packages were shipped with fictitious sender and receiver names and no signature was required for delivery. Once the marijuana was received in North Carolina, the co-conspirators distributed the marijuana to local customers and deposited the proceeds into a bank account in the name of Akilles Motorsports to promote the drug activity and to conceal the true nature of the proceeds. Over one million dollars was deposited into the Akilles Motorsports account between February 23, 2012, and July 3, 2013. Akilles Motorsports was a business front for the money laundering organization.
"The members of this drug and money laundering conspiracy were brought to justice through effective cooperation by law enforcement," said U.S. Attorney Rand. "We are pleased to have been part of the team to stop the influx of these drugs into North Carolina and to hold the offenders accountable."
"The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs. Without these ill-gotten gains, the traffickers could not finance their organizations. IRS Criminal Investigation is committed with taking the profit away from the drug traffickers and putting those individuals in jail," stated Acting Special Agent-in-Charge, Christopher J. Altemus, Jr.
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division stated, "Today is a victory, not only for the multitude of law enforcement agencies who dismantled this organization, but for the citizens in Alamance, Guilford and Wake Counties. Now that these criminals have been removed from the streets, the dangerous drugs that they would have sold will never reach the consumer. This effort would not have been successful without the mission-oriented cooperation between our federal, state and local law enforcement counterparts."
Davone Chanthaphavong, of Graham, NC, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to a term of 3 years’ probation and a $200.00 special assessment.
Nilanh Chanthaphavong, of Raleigh, NC, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to 37 months in the Federal Bureau of Prisons, 3 years supervised release, and a $200.00 special assessment.
Vanhasy Manhvong, formerly of Whitsett, NC, pleaded guilty to conspiracy to commit money laundering. She was sentenced to 12 months in the Federal Bureau of Prisons, 2 years supervised release, and a $200.00 special assessment.
Eugene Ari McAdoo, of Whitsett, NC, pleaded guilty to conspiracy to commit money laundering. He was sentenced to six months in the Federal Bureau of Prisons, 3 years supervised release, a $100.00 special assessment, and a $2500.00 fine.
Marcus Emmanuel Parrish, of Graham, NC, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to 15 months in the Federal Bureau of Prisons, 3 years supervised release, and a $200.00 special assessment.
Phadthin Sihavong, of Fresno, CA, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to 57 months in the Federal Bureau of Prisons, 3 years supervised release, and a $200.00 special assessment.
The case was investigated by the Internal Revenue Service-Criminal Investigation, United States Postal Inspection Service, and the Drug Enforcement Administration, and prosecuted by Assistant United States Attorney Randall S. Galyon.
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Toomsboro Man Sentenced to 151 Months for Possessing Cocaine with Intent to DistributeRead the Press Release
G.F. “Pete” Peterman, III, United States Attorney for the Middle District of Georgia, announced that Eddie Dewayne Whipple, age 38, of Toomsboro, Georgia was sentenced November 30, 2016, to 151 months for possession with intent to distribute cocaine by the Honorable Marc T. Treadwell, United States District Court Judge, in Macon, Georgia. Mr. Whipple entered a plea of guilty to this charge on September 22, 2016.
On February 19, 2015, Drug Enforcement Administration agents in Arizona contacted the Laurens County Sheriff’s Office and advised that a FedEx shipment believed to contain marijuana was scheduled for delivery the next day to a house in Wilkinson County, Georgia. This information was relayed to the Wilkinson County Sheriff’s Office.
The following day agents of the Ocmulgee Drug Task Force observed the delivery of the package to the address on the shipping label, a home across the street from Mr. Whipple. After the FedEx truck departed, Mr. Whipple and two other men came out of his residence. Mr. Whipple watched the two men retrieve the package from the neighboring house and place it in the rear of his Chevrolet Caprice. Mr. Whipple then departed in the vehicle on Highway 57.
Authorities followed Mr. Whipple at a distance and then pulled in behind him when he stopped at a residence. As officers approached, Mr. Whipple exited his vehicle and took off running. He attempted to discard the black jacket he was wearing but was quickly apprehended and wrestled to the ground. A baggie of cocaine was found in his jacket. Mr. Whipple consented to a search of his vehicle and a package containing almost 50 pounds of marijuana was recovered.
A search warrant for Mr. Whipple’s residence was obtained and cans with false bottoms were found containing marijuana and cocaine. The Georgia Bureau of Investigation confirmed the substance was marijuana in Mr. Whipple’s car and that it weighed 20.14 kilograms. The GBI Crime Lab also determined that the white substance recovered from his home and in his jacket was cocaine weighting 31.86 grams.
This case was investigated by the Laurens County Sheriff’s Office, Wilkinson County Sheriff’s Office, the Ocmulgee Drug Task Force, and the Drug Enforcement Administration. Assistant United States Attorney Sonja Profit prosecuted the case on behalf of the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Three Indicted on Healthcare Fraud ChargesRead the Press Release
ABINGDON, VIRGINIA – A federal grand jury, sitting in the United States District Court for the Western District of Virginia in Abingdon, has indicted three individuals with healthcare fraud charges, United States Attorney John P. Fishwick Jr. and Virginia Attorney General Mark R. Herring announced today.
The grand jury has charged Deborah Branch, 64, Melissa Harr, 49 and Bryan Harr Sr., 40, all of Bristol, Virginia, with one count of health care fraud, one count of conspiracy to commit health care fraud, and two counts of wire fraud.
According to the indictment, Melissa and Bryan Harr Sr., 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).
The indictment states that 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 getting 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, is prosecuting the case for the United States.
Third Circuit Court of Appeals Affirms Lengthy Prison Sentences for Two Men Who Executed the Largest Disadvantaged Business Enterprise Fraud in the Nation’s HistoryRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Joseph W. Nagle, age 55, of Deerfield Beach, Florida and Ernest G. Fink, Jr., 71, of Orwigsburg, Pennsylvania, the former owners of Schuylkill Products Inc., (SPI) had their sentences affirmed by the Third Circuit Court of Appeals on November 30, 2016. Nagle was sentenced to 84 months’ imprisonment on November 30, 2015 and Fink was sentenced to 41 months’ imprisonment on February 24, 2016, for their roles in a massive conspiracy to defraud the Disadvantage Enterprise (DBE) program, announced Bruce D. Brandler, U.S. Attorney for the Middle District of Pennsylvania.
According to the U.S. Department of Transportation (USDOT), this scheme, which lasted for over 15 years and involved over $136 million in government contracts in Pennsylvania alone, is the largest reported DBE fraud in the nation’s history.
In April 2012, after a four-week jury trial, a jury convicted Nagle on 26 charges relating to the scheme, including conspiracy to defraud USDOT, mail fraud, wire fraud, and money laundering. Fink previously pleaded guilty to conspiracy to defraud the USDOT in August 2010.
In June 2014, Nagle was sentenced to 84 months’ imprisonment and Fink was sentenced to 51 months’ imprisonment but those sentences were vacated by the U.S. Court of Appeals for the Third Circuit in September 2015 due to an incorrect calculation of the loss amount under the Sentencing Guidelines. Upon remand to the district court for resentencing, United States District Court Judge Sylvia H. Rambo recalculated the loss amount and sentenced Nagle to the same sentence and reduced Fink’s sentence to 41 months’ imprisonment. Both men appealed the new sentences and the Appellate Court affirmed those sentences yesterday in a ten-page opinion, which is attached. The Appellate Court ruled that Judge Rambo correctly measured the loss by determining the profits the defendants received as a result of the fraud and diverted from legitimate DBE’s. The Appellate Court also rejected Fink’s claim that his sentence was substantively unreasonable based on his age and the non-violent nature of the offense stating that, “a 41-month sentence for a 70-year old first-time offender who, for at least fifteen years presided over the largest reported DBE fraud in the history of the U.S. Department of Transportation is not unreasonable.”
In 2014, three other former executives associated with SPI were sentenced for their roles in the scheme.
Romeo P. Cruz, of Westhaven, Connecticut, the former owner of Marikina Construction Corp., which operated as a front for SPI, was sentenced to 33 months’ imprisonment.
Timothy G. Hubler, of Ashland, Pennsylvania, SPI’s former Vice-President in charge of field operations, was sentenced to 33 months’ imprisonment.
Dennis F. Campbell, of Orwigsburg, Pennsylvania, SPI’s former Vice-President in charge of sales and marketing, was sentenced to 24 months’ imprisonment.
The investigation was conducted by the FBI, the U.S. Department of Transportation Inspector General’s Office, the U.S. Department of Labor Inspector General’s Office, and the Criminal Investigation Division of the IRS. U.S. Attorney Bruce Brandler and Assistant U.S. Attorney Kim Douglas Daniel handled the prosecution.
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Third Circuit Court of Appeals Affirms 12 ½-Year Prison Sentence for Heroin CourierRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that the Third Circuit Court of Appeals today affirmed the 12 ½-year prison sentence imposed by Senior U.S. District Court Judge Richard P. Conaboy on a California resident who transported 23 kilograms of heroin (approximately 760,000 retail bags of heroin) from California to Pennsylvania.
According to United States Attorney Bruce D. Brandler, the defendant, Francisco Martinez-Rubio, age 36, a citizen of Mexico, claimed on appeal that his 151-month prison sentence was unreasonable.
Martinez-Rubio pleaded guilty on September 8, 2015, to possession with intent to distribute more than one kilogram of heroin. Judge Conaboy sentenced him on December 15, 2015. Martinez-Rubio admitted that he and three others transported the heroin across the country during late June to early July 2014.
In upholding the sentence, the appeals court ruled that Judge Conaboy was correct in categorizing the defendant as an organizer of criminal activity because he recruited other drug couriers and directed them in their efforts in transporting the heroin across the country. The Court further held that the 12 ½ -year prison sentence was reasonable given the seriousness of the offense and the need to deter others from engaging in similar conduct.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
The case was investigated by the Drug Enforcement Administration and the Pennsylvania State Police. Assistant United States Attorney Francis P. Sempa prosecuted the case and handled the appeal.
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Taos County Man Pleads Guilty to Federal Burglary of a Post Office ChargeRead the Press Release
ALBUQUERQUE – Kenny Martinez, 32, of Penasco, N.M., pled guilty today in federal court in Albuquerque, N.M., to a burglary of a post office charge under a plea agreement with the U.S. Attorney’s Office.
Martinez was charged by a three-count indictment on April 12, 2016, with burglary of a post office, taking letters and packages from the post office addressed to other individuals, and destroying mail and packages addressed to other individuals. According to the indictment, Martinez committed the offenses on Nov. 13 and 14, 2012, in Taos County, N.M.
During today’s proceedings, Martinez pled guilty to a burglary of a post office charge. In entering the guilty plea, Martinez admitted that on Nov. 13 and 14, 2012, he broke into the U.S. Post Office in Penasco, opened packages and letters, and damaged the security safe. Martinez admitted breaking into the post office with the intention of finding money. Martinez further admitted causing approximately $7,243.08 in damages to the post office when he broke into the post office.
At sentencing, Martinez faces a maximum penalty of five years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the U.S. Postal Inspection Service and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.
Slawson Exploration Company Inc. to Make System Upgrades and Undertake Projects to Reduce Air Pollution in North DakotaRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a settlement with Slawson Exploration Company Inc. resolving alleged Clean Air Act violations stemming from the company’s oil and gas production activities in North Dakota, including on the Fort Berthold Indian Reservation. The settlement resolves claims that Slawson failed to adequately design, operate and maintain vapor control systems on its storage tanks at its approximately 170 oil and natural gas well pads in North Dakota, resulting in emissions of volatile organic compounds (VOCs). VOCs are a key component in the formation of smog or ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis.
As part of this settlement, Slawson’s total expenditures on system upgrades, monitoring and inspections are estimated to be $4.1 million. These improvements will significantly reduce VOC emissions and include the use of advanced technology such as infrared cameras and electronic pressure monitors to better detect and respond to air emissions. In addition, Slawson will spend at least an estimated $2 million to fund environmental mitigation projects and pay a $2.1 million civil penalty.
“Safe, responsible, and lawful development of domestic energy resources and technology is of great importance to a sustainable future for all Americans,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “This Clean Air Act agreement will bring better air quality and lasting health benefits to communities in North Dakota, including the people of the Three Affiliated Tribes.”
“This settlement puts Next Generation Compliance technologies to work to reduce air pollution across communities in North Dakota, including on tribal lands,” said Assistant Administrator Cynthia Giles for the Office of Enforcement and Compliance Assurance at EPA. “EPA is committed to making sure that domestic energy development grows in a responsible way that protects public health and complies with the law.”
EPA estimates Slawson’s system upgrades, many of which are already in place, will reduce the emission of at least 11,700 tons of VOCs, 400 tons of hazardous air pollutants, primarily benzene, toluene, ethylbenzene and xylenes and 2,600 tons of methane annually. Improved operation and maintenance will result in additional emissions reductions, as will the replacement of all pit flares used to control emissions from storage tanks.
Many of Slawson’s North Dakota wells are located on the Fort Berthold Indian Reservation; governed by the Mandan, Hidatsa, and Arikara Nation. Nearly all of the electronic pressure monitors will be installed at operations on the Fort Berthold Indian Reservation; Slawson will replace all pit flares on the Fort Berthold Indian Reservation with control devices capable of achieving greater efficiency. These measures, in addition to the other injunctive relief and mitigation projects Slawson will carry out on the Fort Berthold Indian Reservation, will result in a substantial reduction in harmful emissions.
Slawson’s oil and natural gas production operations in North Dakota use storage tanks to store produced oil and water prior to transport. Multiple storage tanks are typically present at a well pad and are frequently controlled by the same vapor control system. Today’s settlement resolves alleged violations at all of Slawson’s well pads in North Dakota with wells in production.
This settlement is part of EPA’s national enforcement initiative to reduce public health and environmental impacts from energy extraction activities. For more information about EPA’s enforcement initiative, click here: http://www2.epa.gov/enforcement/national-enforcement-initiative-ensuring-energy-extraction-activities-comply.
The proposed consent decree, lodged in the U.S. District Court for the District of North Dakota, is subject to a 30-day public comment period and approval by the federal court. Information about submitting a public comment is available at: www.justice.gov/enrd/consent-decrees
For more information on this settlement: https://www.epa.gov/enforcement/slawson-exploration-company-inc-clean-air-act-settlement.
Sentencings for November 28 - December 1, 2016Read the Press Release
Clayton William Wenner, 49, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on December 1, 2016, for being a felon in possession of firearms. Wenner was arrested in Cheyenne, Wyoming. He received 24 months of imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and a $300.00 fine. This case was investigated by the Laramie County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Antonio Garcia-Bautista, 36, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 30, 2016, for illegal re-entry of a previously deported alien into the United States. Garcia-Bautista was arrested in Jackson, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Sebastian Romero-Badillo, 25, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 29, 2016, for illegal re-entry of a previously deported alien into the United States. Romero-Badillo was arrested in Jackson, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Jose Mares-Avila, 30, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 29, 2016, for illegal re-entry of a previously deported alien into the United States. Mares-Avila was arrested in Evanston, Wyoming. He received six months of imprisonment, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Javier Bencomo-Orozco, 29, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 29, 2016, for illegal re-entry of a previously deported alien into the United States. Bencomo-Orozco was arrested in Phoenix, Arizona. He received ten months of
imprisonment, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Eli Brian Rides Horse, 46, of Hardin, Montana, was sentenced by Federal District Court Judge Alan B. Johnson on November 28, 2016, for conspiracy to distribute methamphetamine. Rides Horse was arrested in Lame Deer, Montana. He received 78 months of imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment and $500.00 in restitution. This case was investigated by the Wyoming Division of Criminal Investigation and the Arizona Department of Public Safety.
Rochester Drug Dealer Sentenced for His Role in Three MurdersRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.—Acting U.S. Attorney James P. Kennedy, Jr. announced today that Pablo "Paul" Plaza, who was convicted by a federal jury of the murder of Francisco Santos, conspiracy to possess with intent to distribute and to distribute large quantities of illegal narcotics, and possession and discharge of a firearm in furtherance of the drug conspiracy, was sentenced to life in prison plus 10 years by Chief U.S. District Judge Frank P. Geraci, Jr.
Acting U.S. Attorney Kennedy, crediting his trial team of AUSAs Rodriguez and Marangola and the ATF Agents and RPD Officers who worked tirelessly to put this case together, noted that “although justice was a long-time coming in this case, it is fitting that, in the end, it was delivered with a measure of permanence.”
ATF Special Agent in Charge Ashan M. Benedict said, “The sentencing of Pablo Paul Plaza to life imprisonment plus 10 years for his role in three murders while engaged in a drug trafficking conspiracy demonstrates that though justice may at times be delayed, it will not be denied. The passage of time will not lessen the resolve of ATF and our law enforcement partners to ensure that violent criminals meet their inevitable fate of a cell in a State or Federal penitentiary. It is our sincerest hope that Plaza’s sentencing, and the expected sentencings of his co-conspirators, brings some solace and closure to Ms. Harmon’s family, and the families of the other victims of this violent organization.”
Assistant U.S. Attorneys Everardo A. Rodriguez and Melissa M. Marangola, who handled the prosecution of the case, stated that Plaza and his brother James Kendrick spearheaded a long term, violent narcotics trafficking ring in the City of Rochester between 1993 through and including March 2011. To protect the conspiracy and its members from other drug dealers and those deemed to be disloyal workers, Plaza, Kendrick, and others in the conspiracy resorted to violence including beatings and murder.
Specifically, Francisco Santos, a/k/a “Cisco,” was murdered in October 1998. Santos’ body was found in May 1999 buried on the Cattaraugus Indian Reservation in Erie County, NY. Santos was a worker for Plaza and Kendrick and was murdered because the defendants believed he betrayed the organization by stealing drugs, cash and guns. Plaza and Kendrick initially retaliated by conducting a drive-by shooting at the residence of Santos’ father, step-mother and sisters, who were four and six years old at the time.
During the trial, the Government presented evidence of additional acts of violence including the murder of Jose Troche on January 14, 2010. The Government’s proof established that Plaza and Kendrick planned and executed the murder of Troche because they feared that Troche, also a member of the conspiracy, was planning to cooperate in the prosecution of the defendants. In connection with the Troche murder, Plaza and Kendrick decided that Kendrick, in an effort to fabricate an alibi, would go to a local supermarket and be seen on camera at the time of Troche’s murder.
In addition, the Government presented evidence that Plaza directed co-conspirators Damion Colabatistto, Angelo Ocasio and others to murder a rival drug dealer who injured Plaza in a fight. Colabatistto and Ocasio went to 137 Cameron Street looking for the rival drug dealer. When they arrived at the house, the two men shot and killed Meosha Harmon, erroneously believing her to be the rival drug dealer, when she came to the upstairs window of the residence. Colabatistto and Ocasio were tried in separate trials and both were convicted for their roles in the conspiracy and murder of Harmon and are awaiting sentencing.
James Kendrick was also convicted of drug conspiracy and the murders of Francisco Santos and of Ryan Cooper. Nine other defendants involved in the drug conspiracy were charged and convicted of various drug and firearms offenses and of other violent crimes. Plaza’s younger brother, also named Pablo, was previously convicted of participating in the murder of Francisco Santos.
The sentencing of Pablo “Paul” Plaza is the result of a joint investigation consisting of the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Ashan Benedict, Special Agent-in-Charge, New York Field Division, and the Rochester Police Department, Violent Crime Team/Firearms Suppression Unit, under the direction of Chief Michael Ciminelli.
Rio Rancho Man Sentenced to Prison for Robbing Bank in AlbuquerqueRead the Press Release
ALBUQUERQUE – Joshua Abeyta, 23, of Rio Rancho, N.M., was sentenced today in federal court in Albuquerque, N.M., to 37 months in prison followed by three years of supervised release for his conviction on a bank robbery charge.
Abeyta was arrested on Oct. 19, 2015, on a criminal complaint charging him with robbing the Santa Fe Federal Credit Union Bank located at 7101 Jefferson St. NE in Albuquerque, earlier in the day. According to the complaint, Abeyta robbed the bank by handing a handwritten note with a robbery demand to a bank teller. The bank teller complied with Abeyta’s written and verbal robbery demands by handing money to Abeyta. Abeyta left the scene on foot and was pursued by customers of the bank before being arrested by an officer of the Albuquerque Police Department. Abeyta was indicted on the same charge on Nov. 17, 2015.
On Aug. 19, 2016, Abeyta entered a guilty plea to the indictment, and admitted robbing the Santa Fe Federal Credit Union in Albuquerque on Oct. 19, 2015.
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department. Assistant U.S. Attorney Kimberly A. Brawley prosecuted the case.
Ringgold man sentenced to 36 months in prison for illegally possessing firearmRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a Ringgold man was sentenced to 36 months in prison for possessing a pistol after being convicted of a felony.
Jason Edward Myers, 42, of Ringgold, La., was sentenced by U.S. District Judge Elizabeth E. Foote on one count of possession of a firearm by a convicted felon. He was also sentenced to three years of supervised release and must forfeit the weapon seized during the investigation. According to the August 17, 2016 guilty plea, law enforcement agents learned that Myers planned to sell drugs and a pistol to someone in Ringgold. An undercover operation was conducted, and law enforcement agents observed Myers on December 11, 2015 selling a Ruger, Model LCP .380 caliber pistol at Layfield Road in Ringgold. After his arrest, he admitted to being a convicted felon.
This investigation and prosecution is part of Project Safe Neighborhoods, which is a Department of Justice initiative to promote firearm safety and to reduce firearm crimes by preventing the possession and use of firearms by dangerous and persistent felons and others not authorized to possess a firearm.
The ATF and Bienville Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Tennille M. Gilreath prosecuted the case.
Recruiter Admits Scheme to Fraudulently Maintain Immigration Status and Obtain Work Authorizations for Foreign Clients Through ‘Pay to Stay’ New Jersey CollegeRead the Press Release
NEWARK, N.J. – The chief executive officer and managing director of two Middlesex County, New Jersey, companies today admitted recruiting foreign nationals to enroll at a “pay to stay” New Jersey college in order to fraudulently maintain his clients’ student visa status and obtain full-time work authorizations without having to attend classes, U.S. Attorney Paul J. Fishman announced.
Tejesh Kodali, 45, of Edison, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count of conspiracy to commit visa fraud.
On April 5, 2016, 22 brokers, recruiters, and employers, including Kodali, were charged with enrolling foreign nationals in the University of Northern New Jersey, a purported for-profit college located in Cranford, New Jersey (UNNJ). The UNNJ was created in September 2013 by Homeland Security Investigations (HSI). It was not staffed with instructors or educators, had no curriculum, and conducted no actual classes or education activities. It operated solely as a storefront location staffed by federal agents posing as school administrators.
According to the documents filed in this case and statements made in court:
Kodali – an Indian citizen and lawful permanent resident in the United States – was the director of operations of Promatrix Corp. and Blue Cloud Techs Corp., which were purported international student recruiting and consulting companies located in Edison.
UNNJ represented itself as a school that, among other things, was authorized to issue a document known as a “Certificate of Eligibility for Nonimmigrant (F-1) Student Status - for Academic and Language Students,” commonly referred to as a Form I-20. This document, which certifies that a foreign national has been accepted to a school and would be a full-time student, typically enables legitimate foreign students to obtain an F-1 student visa. With the visa, they can enter or remain in the United States while they make normal progress toward the completion of a full course of study at a Student and Exchange Visitor Program (SEVP) certified institution.
Kodali told his foreign national clients that for a fee, they could enroll at UNNJ without having to attend any classes and that their enrollment would enable them to fraudulently maintain their nonimmigrant status. With full knowledge that the recruits were not bona fide students and would not attend any courses, earn credits, or make academic progress toward any legitimate degree at UNNJ, Kodali caused Forms I-20 to be issued to the foreign nationals.
Kodali also caused the foreign nationals to be reported in government databases as legitimate foreign students. In order to deceive immigration officials, Kodali and his foreign clients obtained and created fraudulent student documents, including attendance records and transcripts.
After enabling them to maintain their student visa status, Kodali also conspired to secure fraudulent work authorizations for some of their foreign clients. He admitted that his intention was to profit from the scheme by outsourcing these foreign individuals through Promatrix and Blue Techs as information technology consultants with various businesses in the United States for commissions. In total, Kodali and his conspirators fraudulently maintained and attempted to obtain 37 student visas and/or work authorizations.
The conspiracy to commit visa fraud charge carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing for Kodali is scheduled for March 13, 2017.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement, under the leadership of Director Sarah R. Saldaña; HSI Newark, under the leadership of Special Agent in Charge Terence S. Opiola; U.S. Immigration and Customs Enforcement, Counterterrorism and Criminal Exploitation Unit, under the leadership of Unit Chief Roland Burbano; U.S. Citizenship and Immigration Services, Fraud Detection and National Security Section, under the leadership of Associate Director Matthew Emrich; the Student and Exchange Visitor Program, under the leadership of Deputy Assistant Director Louis M. Farrell; U.S. Citizenship and Immigration Services, Vermont Service Center, Security Fraud Division, under the leadership of Associate Center Director Bradley J. Brouillette; U.S. Department of State, Bureau of Consular Affairs, Office of Fraud Prevention Programs, under the leadership of Director Josh Glazeroff; and the FBI, Joint Terrorism Task Force, under the leadership of FBI Special Agent in Charge Timothy Gallagher in Newark, with the investigation.
He also thanked the Accrediting Commission of Career Schools and Colleges (ACCSC), under the leadership of Executive Director Michale S. McComis, and the N.J. Office of Higher Education, under the leadership of Secretary of Higher Education Rochelle R. Hendricks, for their assistance. In addition, U.S. Attorney Fishman thanked the N.J. Motor Vehicle Commission and the New York State Department of Motor Vehicles, as well as the U.S. Attorney’s Offices for the Central District of California, Eastern District of New York, Eastern District of Virginia, Southern District of New York, Central District of Illinois, Peoria Division, and the Northern District of Georgia for their help.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Defense counsel: Patrick Papalia Esq., Hackensack, New Jersey
Princess Cruise Lines to Pay Largest-Ever Criminal Penalty for Deliberate Vessel PollutionRead the Press Release
Princess Cruise Lines Ltd. (Princess) has agreed to plead guilty to seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up. Princess will pay a $40 million penalty– the largest-ever criminal penalty involving deliberate vessel pollution – and plead guilty to charges related to illegal dumping of oil contaminated waste from the Caribbean Princess cruise ship. The plea agreement was announced today by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida in Miami, Florida.
Princess, headquartered in Santa Clarita, California, is a subsidiary of Carnival Corporation (Carnival), which owns and operates multiple cruise lines and collectively comprises the world’s largest cruise company. Carnival is headquartered in Miami. As part of the plea agreement with Princess, cruise ships from eight Carnival cruise line companies (Carnival Cruise Line, Holland America Line N.V., Seabourn Cruise Line Ltd. and AIDA Cruises) will be under a court supervised Environmental Compliance Program (ECP) for five years. The ECP will require independent audits by an outside entity and a court appointed monitor.
The charges to which Princess will plead guilty concern the Caribbean Princess cruise ship which visited various U.S. ports in Florida, Maine, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, South Carolina, Texas, U.S. Virgin Islands and Virginia. The U.S. investigation was initiated after information was provided to the U.S. Coast Guard by the British Maritime and Coastguard Agency (MCA) indicating that a newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England. The whistleblowing engineer quit his position when the ship reached Southampton, England. The chief engineer and senior first engineer ordered a cover-up, including removal of the magic pipe and directing subordinates to lie. The MCA shared evidence with the U.S. Coast Guard, including before and after photos of the bypass used to make the discharge and showing its disappearance. The U.S. Coast Guard conducted an examination of the Caribbean Princess upon its arrival in New York City, New York, on Sept. 14, 2013, during which certain crew members continued to lie in accordance with orders they had received from Princess employees.
According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The discharge on Aug. 26, 2013, involved approximately 4,227 gallons, 23 miles off the coast of England within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers simultaneously ran clean seawater through the ship’s overboard equipment in order to create a false digital record for a legitimate discharge.
Caribbean Princess used multiple methods over the course of time to pollute the seas. Prior to the installation of the bypass pipe used to make the discharge off the coast of England, a different unauthorized valve was used. When the Department of Justice investigative team conducted a consensual boarding of the ship in Houston, Texas, on March 8, 2014, they found the valve that crew members had described. When it was removed by Princess at the department’s request, it was found to contain black oil.
In addition to the use of a magic pipe to circumvent the oily water separator and oil content monitor required pollution prevention equipment, the U.S. investigation uncovered two other illegal practices which were found to have taken place on the Caribbean Princess as well as four other Princess ships – Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from otherwise alarming and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste. Neither of these practices were truthfully recorded in the oil record book as required. All of the bypassing took place through the graywater system which was discharged when the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely.
“The pollution in this case was the result of more than just bad actors on one ship,” said Assistant Attorney General Cruden. “It reflects very poorly on Princess’s culture and management. This is a company that knew better and should have done better. Hopefully the outcome of this case has the potential not just to chart a new course for this company, but for other companies as well.”
“The conduct being addressed today is particularly troubling because the Carnival family of companies has a documented history of environmental violations, including in the Southern District of Florida,” said U.S. Attorney Ferrer. “Our hope is that all companies abide by regulations that are in place to protect our natural resources and prevent environmental harm. Today’s case should send a powerful message to other companies that the U.S. government will continue to enforce a zero tolerance policy for deliberate ocean dumping that endangers the countless animals, marine life and humans who rely on clean water to survive.”
“The safety, security and environmental stewardship of our ports, waterways and oceans is an important Coast Guard mission set and the complexity of the challenges we face today requires a global unity of effort among law enforcement partners,” said Rear Admiral Scott Buschman Commander, Coast Guard District Seven. “I sincerely thank the U.S. Attorney and the United Kingdom Maritime and Coastguard Agency for your leadership, your collaboration and the hard work put forth to reach a plea agreement with significant penalties that serve as a clear warning to all polluters.”
“This shows just how well the U.K. and U.S. can work together on these kind of cases,” said Jeremy Smart, head of enforcement at the Maritime & Coastguard Agency of the United Kingdom. “It also sends a clear message to the industry that this kind of pollution practice will not be tolerated anywhere in the world. It also shows that we will always take any information we are given by those who report such practices to us very seriously and will act upon it.”
In addition to the criminal information, a plea agreement and joint factual statement were today filed in court in Miami. Photographs of some of the evidence provided by the whistleblower and obtained by the government were also filed in federal court. In the factual statement, Princess also admitted to the following:
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Illegal discharges took place on the Caribbean Princess dating back to 2005, one year after the vessel started operations, as part of a conspiracy to violate the Act to Prevent Pollution from Ships and to obstruct justice.
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Different bypass methods were used over the course of time, including a “magic pipe” used to transfer oily waste overboard.
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After learning that an engineer had blown the whistle, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.
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Prior to the MCA boarding, the chief engineer and senior first engineer ordered crew members to lie. Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.
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When using the magic pipe, engineers processed sea water through the oily water separator in order to create a digital record to account for the missing waste.
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Shore-side management failed to provide and exercise sufficient supervision and management controls to prevent or detect criminal violations by Caribbean Princess crew members.
-
A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.
-
Princess engineers on the Caribbean Princess indicated that the chief engineer responsible for the discharge on Aug. 26, 2013, was known as “broccino corto” (a person with short arms), an Italian expression for a cheap person whose arms are too short to reach his wallet. Some expressed the same opinion of the shore-side superintendent.
-
Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.
-
Princess discovered “stub pipes” along the entire length of the ship for the apparent purpose of pumping graywater overflows into the bilges back into the graywater system and subsequently overboard.
According to papers filed in court, Princess has undertaken remedial measures in response to the government’s investigation, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.
If approved by the court, $10 million of the $40 million criminal penalty will be devoted to community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will be earmarked for projects to benefit the marine environment in United Kingdom waters.
Today’s prosecution was made possible through the combined efforts of the U.S. Coast Guard Investigative Service, the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, Assistant Attorney General Cruden and U.S. Attorney Ferrer expressed their appreciation to the U.K.’s MCA for their cooperation and assistance. The case was prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice and Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida.
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Princess Cruise Lines to Pay Largest-Ever Criminal Penalty for Deliberate Vessel PollutionRead the Press Release
Contact: Office of Public Affairs (202) 514-2007
WASHINGTON – Princess Cruise Lines Ltd. (Princess) has agreed to plead guilty to seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up. Princess will pay a $40 million penalty– the largest-ever criminal penalty involving deliberate vessel pollution – and plead guilty to charges related to illegal dumping of oil contaminated waste from the Caribbean Princess cruise ship. The plea agreement was announced today by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida in Miami, Florida.
Princess, headquartered in Santa Clarita, California, is a subsidiary of Carnival Corporation (Carnival), which owns and operates multiple cruise lines and collectively comprises the world’s largest cruise company. Carnival is headquartered in Miami. As part of the plea agreement with Princess, cruise ships from eight Carnival cruise line companies (Carnival Cruise Line, Holland America Line N.V., Seabourn Cruise Line Ltd. and AIDA Cruises) will be under a court supervised Environmental Compliance Program (ECP) for five years. The ECP will require independent audits by an outside entity and a court appointed monitor.
The charges to which Princess will plead guilty concern the Caribbean Princess cruise ship which visited various U.S. ports in Florida, Maine, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, South Carolina, Texas, U.S. Virgin Islands and Virginia. The U.S. investigation was initiated after information was provided to the U.S. Coast Guard by the British Maritime and Coastguard Agency (MCA) indicating that a newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England. The whistleblowing engineer quit his position when the ship reached Southampton, England. The chief engineer and senior first engineer ordered a cover-up, including removal of the magic pipe and directing subordinates to lie. The MCA shared evidence with the U.S. Coast Guard, including before and after photos of the bypass used to make the discharge and showing its disappearance. The U.S. Coast Guard conducted an examination of the Caribbean Princess upon its arrival in New York City, New York, on Sept. 14, 2013, during which certain crew members continued to lie in accordance with orders they had received from Princess employees.
According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The discharge on Aug. 26, 2013, involved approximately 4,227 gallons, 23 miles off the coast of England within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers simultaneously ran clean seawater through the ship’s overboard equipment in order to create a false digital record for a legitimate discharge.
Caribbean Princess used multiple methods over the course of time to pollute the seas. Prior to the installation of the bypass pipe used to make the discharge off the coast of England, a different unauthorized valve was used. When the Department of Justice investigative team conducted a consensual boarding of the ship in Houston, Texas, on March 8, 2013, they found the valve that crew members had described. When it was removed by Princess at the department’s request, it was found to contain black oil.
In addition to the use of a magic pipe to circumvent the oily water separator and oil content monitor required pollution prevention equipment, the U.S. investigation uncovered two other illegal practices which were found to have taken place on the Caribbean Princess as well as four other Princess ships – Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from otherwise alarming and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste. Neither of these practices were truthfully recorded in the oil record book as required. All of the bypassing took place through the graywater system which was discharged when the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely.
“The pollution in this case was the result of more than just bad actors on one ship,” said Assistant Attorney General Cruden. “It reflects very poorly on Princess’s culture and management. This is a company that knew better and should have done better. Hopefully the outcome of this case has the potential not just to chart a new course for this company, but for other companies as well.”
“The conduct being addressed today is particularly troubling because the Carnival family of companies has a documented history of environmental violations, including in the Southern District of Florida,” said U.S. Attorney Ferrer. “Our hope is that all companies abide by regulations that are in place to protect our natural resources and prevent environmental harm. Today’s case should send a powerful message to other companies that the U.S. government will continue to enforce a zero tolerance policy for deliberate ocean dumping that endangers the countless animals, marine life and humans who rely on clean water to survive.”
“The safety, security and environmental stewardship of our ports, waterways and oceans is an important Coast Guard mission set and the complexity of the challenges we face today requires a global unity of effort among law enforcement partners,” said Rear Admiral Scott Buschman Commander, Coast Guard District Seven. “I sincerely thank the U.S. Attorney and the United Kingdom Maritime and Coastguard Agency for your leadership, your collaboration and the hard work put forth to reach a plea agreement with significant penalties that serve as a clear warning to all polluters.”
“This shows just how well the U.K. and U.S. can work together on these kind of cases,” said Jeremy Smart, head of enforcement at the Maritime & Coastguard Agency of the United Kingdom. “It also sends a clear message to the industry that this kind of pollution practice will not be tolerated anywhere in the world. It also shows that we will always take any information we are given by those who report such practices to us very seriously and will act upon it.”
In addition to the criminal information, a plea agreement and joint factual statement were today filed in court in Miami. Photographs of some of the evidence provided by the whistleblower and obtained by the government were also filed in federal court. In the factual statement, Princess also admitted to the following:
- Illegal discharges took place on the Caribbean Princess dating back to 2005, one year after the vessel started operations, as part of a conspiracy to violate the Act to Prevent Pollution from Ships and to obstruct justice.
- Different bypass methods were used over the course of time, including a “magic pipe” used to transfer oily waste overboard.
- After learning that an engineer had blown the whistle, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.
- Prior to the MCA boarding, the chief engineer and senior first engineer ordered crew members to lie. Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.
- When using the magic pipe, engineers processed sea water through the oily water separator in order to create a digital record to account for the missing waste.
- Shore-side management failed to provide and exercise sufficient supervision and management controls to prevent or detect criminal violations by Caribbean Princess crew members.
- A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.
- Princess engineers on the Caribbean Princess indicated that the chief engineer responsible for the discharge on Aug. 26, 2013, was known as “broccino corto” (a person with short arms), an Italian expression for a cheap person whose arms are too short to reach his wallet. Some expressed the same opinion of the shore-side superintendent.
- Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.
- Princess discovered “stub pipes” along the entire length of the ship for the apparent purpose of pumping graywater overflows into the bilges back into the graywater system and subsequently overboard.
According to papers filed in court, Princess has undertaken remedial measures in response to the government’s investigation, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.
If approved by the court, $10 million of the $40 million criminal penalty will be devoted to community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will be earmarked for projects to benefit the marine environment in United Kingdom waters.
Today’s prosecution was made possible through the combined efforts of the U.S. Coast Guard Investigative Service, the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, Assistant Attorney General Cruden and U.S. Attorney Ferrer expressed their appreciation to the U.K.’s MCA for their cooperation and assistance. The case was prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice and Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida.
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Princess Cruise Lines to Pay Largest-Ever Criminal Penalty for Deliberate Vessel PollutionRead the Press Release
Company to Pay $40 Million and Implement Remedial Measures on All Carnival Companies Visiting U.S. Ports
Princess Cruise Lines Ltd. (Princess) has agreed to plead guilty to seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up. Princess will pay a $40 million penalty– the largest-ever criminal penalty involving deliberate vessel pollution – and plead guilty to charges related to illegal dumping of oil contaminated waste from the Caribbean Princess cruise ship. The plea agreement was announced today by U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida in Miami, Florida and Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division.
Princess, headquartered in Santa Clarita, California, is a subsidiary of Carnival Corporation (Carnival), which owns and operates multiple cruise lines and collectively comprises the world’s largest cruise company. Carnival is headquartered in Miami. As part of the plea agreement with Princess, cruise ships from eight Carnival cruise line companies (Carnival Cruise Line, Holland America Line N.V., Seabourn Cruise Line Ltd. and AIDA Cruises) will be under a court supervised Environmental Compliance Program (ECP) for five years. The ECP will require independent audits by an outside entity and a court appointed monitor.
The charges to which Princess will plead guilty concern the Caribbean Princess cruise ship which visited various U.S. ports in Florida, Maine, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, South Carolina, Texas, U.S. Virgin Islands and Virginia. The U.S. investigation was initiated after information was provided to the U.S. Coast Guard by the British Maritime and Coastguard Agency (MCA) indicating that a newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England. The whistleblowing engineer quit his position when the ship reached Southampton, England. The chief engineer and senior first engineer ordered a cover-up, including removal of the magic pipe and directing subordinates to lie. The MCA shared evidence with the U.S. Coast Guard, including before and after photos of the bypass used to make the discharge and showing its disappearance. The U.S. Coast Guard conducted an examination of the Caribbean Princess upon its arrival in New York City, New York, on Sept. 14, 2013, during which certain crew members continued to lie in accordance with orders they had received from Princess employees.
According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The discharge on Aug. 26, 2013, involved approximately 4,227 gallons, 23 miles off the coast of England within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers simultaneously ran clean seawater through the ship’s overboard equipment in order to create a false digital record for a legitimate discharge.
Caribbean Princess used multiple methods over the course of time to pollute the seas. Prior to the installation of the bypass pipe used to make the discharge off the coast of England, a different unauthorized valve was used. When the Department of Justice investigative team conducted a consensual boarding of the ship in Houston, Texas, on March 8, 2014, they found the valve that crew members had described. When it was removed by Princess at the department’s request, it was found to contain black oil.
In addition to the use of a magic pipe to circumvent the oily water separator and oil content monitor required pollution prevention equipment, the U.S. investigation uncovered two other illegal practices which were found to have taken place on the Caribbean Princess as well as four other Princess ships – Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from otherwise alarming and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste. Neither of these practices were truthfully recorded in the oil record book as required. All of the bypassing took place through the graywater system which was discharged when the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely.
“The conduct being addressed today is particularly troubling because the Carnival family of companies has a documented history of environmental violations, including in the Southern District of Florida,” said U.S. Attorney Ferrer. “Our hope is that all companies abide by regulations that are in place to protect our natural resources and prevent environmental harm. Today’s case should send a powerful message to other companies that the U.S. government will continue to enforce a zero tolerance policy for deliberate ocean dumping that endangers the countless animals, marine life and humans who rely on clean water to survive.”
“The pollution in this case was the result of more than just bad actors on one ship,” said Assistant Attorney General Cruden. “It reflects very poorly on Princess’s culture and management. This is a company that knew better and should have done better. Hopefully the outcome of this case has the potential not just to chart a new course for this company, but for other companies as well.”
“The safety, security and environmental stewardship of our ports, waterways and oceans is an important Coast Guard mission set and the complexity of the challenges we face today requires a global unity of effort among law enforcement partners,” said Rear Admiral Scott Buschman Commander, Coast Guard District Seven. “I sincerely thank the U.S. Attorney and the United Kingdom Maritime and Coastguard Agency for your leadership, your collaboration and the hard work put forth to reach a plea agreement with significant penalties that serve as a clear warning to all polluters.”
“This shows just how well the U.K. and U.S. can work together on these kind of cases,” said Jeremy Smart, head of enforcement at the Maritime & Coastguard Agency of the United Kingdom. “It also sends a clear message to the industry that this kind of pollution practice will not be tolerated anywhere in the world. It also shows that we will always take any information we are given by those who report such practices to us very seriously and will act upon it.”
In addition to the criminal information, a plea agreement and joint factual statement were today filed in court in Miami. Photographs of some of the evidence provided by the whistleblower and obtained by the government were also filed in federal court. In the factual statement, Princess also admitted to the following:
- Illegal discharges took place on the Caribbean Princess dating back to 2005, one year after the vessel started operations, as part of a conspiracy to violate the Act to Prevent Pollution from Ships and to obstruct justice.
- Different bypass methods were used over the course of time, including a “magic pipe” used to transfer oily waste overboard.
- After learning that an engineer had blown the whistle, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.
- Prior to the MCA boarding, the chief engineer and senior first engineer ordered crew members to lie. Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.
- When using the magic pipe, engineers processed sea water through the oily water separator in order to create a digital record to account for the missing waste.
- Shore-side management failed to provide and exercise sufficient supervision and management controls to prevent or detect criminal violations by Caribbean Princess crew members.
- A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.
- Princess engineers on the Caribbean Princess indicated that the chief engineer responsible for the discharge on Aug. 26, 2013, was known as “broccino corto” (a person with short arms), an Italian expression for a cheap person whose arms are too short to reach his wallet. Some expressed the same opinion of the shore-side superintendent.
- Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.
- Princess discovered “stub pipes” along the entire length of the ship for the apparent purpose of pumping graywater overflows into the bilges back into the graywater system and subsequently overboard.
According to papers filed in court, Princess has undertaken remedial measures in response to the government’s investigation, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.
If approved by the court, $10 million of the $40 million criminal penalty will be devoted to community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will be earmarked for projects to benefit the marine environment in United Kingdom waters.
Today’s prosecution was made possible through the combined efforts of the U.S. Coast Guard Investigative Service, the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, U.S. Attorney Ferrer and Assistant Attorney General Cruden expressed their appreciation to the U.K.’s MCA for their cooperation and assistance. The case was prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice and Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida.
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.
- Illegal discharges took place on the Caribbean Princess dating back to 2005, one year after the vessel started operations, as part of a conspiracy to violate the Act to Prevent Pollution from Ships and to obstruct justice.
Portland Man Pleads Guilty to Possessing Child PornographyRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Glenn Strout, 53, of Portland, pleaded guilty today in U.S. District Court to possessing child pornography.
According to court records, in November 2015, law enforcement agents were investigating the sharing of child pornography over the internet. As part of the investigation, agents downloaded child pornography images from a computer at Strout’s residence in Portland. A search warrant was obtained for the residence and during the warrant’s execution Strout admitted downloading child pornography. A forensic analysis of devices seized under the warrant revealed numerous child pornography still images and video files.
Strout faces up to 20 years in prison, five years to life on supervised release and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Maine State Police Computer Crimes Unit and the Portland Police Department.
Physician’s Assistant Pleads Guilty to Violating Federal Food, Drug and Cosmetic ActRead the Press Release
TOPEKA, KAN. – A physician’s assistant who provided aesthetic services including Botox injections to clients in Garden City and Scott City pleaded guilty Thursday to violating the federal Food, Drug and Cosmetic Act, U.S. Attorney Tom Beall said.
Joel Erskin, 53, Garden City, Kan. pleaded guilty to one count of receiving and dispensing misbranded drugs. In his plea, he admitted the crimes occurred while he owned and operated Renovo Medical, LLC, also known as University Medical. Erskin purchased cheaper versions of Botox® and Juvederm® from Canadian pharmacies. The Botox he purchased was misbranded and failed to meet labeling requirements. The Juvederm was adulterated and not approved for distribution in the United States.
Erskin did not inform his clients that the drugs were purchased from Canada and did not meet federal standards.
Sentencing is set for Dec. 20. He faces a penalty of up to a year imprisonment and a fine up to $100,000.
Beall commended the Food and Drug Administration’s Office of Criminal Investigation and Assistant U.S. Attorney Tanya Treadway for their work on the case.
Philadelphia Man Charged with Illegal ReentryRead the Press Release
Angel Miguel Jorge-Jimenez, 26, of Philadelphia, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about October 18, 2016, Jorge-Jimenez, an alien, and native and citizen of the Dominican Republic, was found in the United States after having been deported from the United States on or about May 21, 2013.
If convicted the defendant faces a maximum possible sentence of twenty years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Special Assistant United States Attorney Josh A. Davison.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Oklahoma City Woman to Serve 82 Months in Prison for Embezzling from Her Employer While Under Charges for Earlier EmbezzlementRead the Press Release
Oklahoma City, Oklahoma – Susie Jane Patton, 49, of Oklahoma City, was sentenced earlier this week by United States District Judge Robin Cauthron to serve 82 months in federal prison for using a wire fraud scheme to embezzle from her employer while under charges for a separate embezzlement. This sentence was ordered to be served consecutive to a 22-month sentence she received in the prior case.
In the earlier case, Patton was charged on June 19, 2015, with wire fraud for embezzling from a prior employer, Silverado Reconditioning. She pled guilty on July 7, 2015, and was sentenced on January 22, 2016, to serve 22 months in federal prison and to pay $66,125.41 in restitution.
Before and during her earlier embezzlement prosecution, Patton was employed by D&D Design and Manufacturing of Oklahoma City as their office manager. While the earlier case was pending and she was on pretrial release, an FBI investigation determined that Patton had embezzled more than $100,000 from her new employer, D&D Design, from September 2014 until February 2016. Patton was indicted by a federal grand jury for 15 counts of wire fraud on June 22, 2016, for embezzling from D&D Design. She pled guilty on August 16, 2016, to one count of wire fraud and one count of wire fraud while on conditions of release.
At the sentencing hearing earlier this week, Judge Cauthron imposed a total sentence of 82 months in prison (57 months and 25 months respectively on two separate counts to which she pled guilty, to run consecutively). This 82-month sentence was ordered to run consecutive to Patton’s earlier 22-month sentence in the prior case. In determining the sentence in the second case, Judge Cauthron varied above the United States Sentencing Guideline range of 46 - 57 months because of the nature and circumstances involved in the case, the need to deter Patton in her ongoing criminal conduct, and the need to protect the public. Finally, Patton was ordered to pay $107,452.08 in restitution to D&D Design.
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Kerry Kelly.
Ocean County, New Jersey, Woman Admits Role in $1 Million Medicare Fraud That Deceived Seniors into Unnessesary DNA TestsRead the Press Release
TRENTON, N.J. – A Point Pleasant, New Jersey, woman today admitted that she wrongfully accessed protected health information and paid kickbacks to healthcare professionals on behalf of a $1 million Medicare fraud scheme involving the purported non-profit The Good Samaritans of America, U.S. Attorney Paul J. Fishman announced.
Sheila Kahl, 44, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging her with one count of conspiring to commit health care fraud and one count of conspiring to wrongfully access individually identifiable health information and pay illegal remunerations to health care professionals.
“Instead of helping seniors navigate federal benefit programs, The Good Samaritans of America was merely a front for an elaborate Medicare scheme that subjected elderly victims to unnecessary genetic testing, all in an effort to score commission payments from clinical labs,” U.S. Attorney Fishman said. “In addition to wrongfully accessing the victims’ private medical information for personal gain, Kahl helped pay healthcare professionals thousands of dollars in kickbacks to fraudulently authorize the tests.”
“This conspiracy involved stealing private medical information and used particularly callous scare tactics to convince elderly and vulnerable Medicare beneficiaries to submit to medically unnecessary DNA testing,” said Special Agent in Charge Scott J. Lampert, U.S. Department of Health and Human Services – Office of Inspector General. “Today’s plea resulted from joint law enforcement action to detect and block a planned multi-state expansion of this deplorable scam against the program and its enrollees.”
According to documents filed in the case and statements made in court:
From July 2014 through December 2015, Seth Rehfuss, 42, of Somerset, New Jersey, Kahl, and others used The Good Samaritans of America to gain access to low-income senior housing complexes. Rehfuss and others claimed that The Good Samaritans of America was a “trusted non-profit” that assisted senior citizens in navigating federal benefit programs. In reality, The Good Samaritans of America was a front to present information about genetic testing. Kahl, Rehfuss and others even used advertisements for free ice cream to ensure attendance at the presentations.
In order to convince senior citizens to submit to genetic testing, Rehfuss used fear-based tactics during the presentations, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing. In addition, Rehfuss claimed that the genetic testing allowed for “personalized medicine.”
As part of the scheme, Seth Rehfuss and others frequently took DNA swabs in the community rooms where the presentations took place or made arrangements to visit the senior citizen’s apartment on another day to take the DNA swab. Regardless of the timing or location of the swabbing, the DNA swab was collected without the involvement of any healthcare provider and without any determination by a healthcare provider that such testing was medically necessary or appropriate.
In order to get the tests authorized, Rehfuss used advertisements on Craigslist to recruit healthcare providers for the scheme. After entering into contractual relationships with The Good Samaritans of America, the healthcare providers received requisition forms that often included a patient’s personal information, Medicare information, medication lists and diagnosis codes.
The healthcare providers were paid thousands of dollars per month by Kahl and Rehfuss to sign their names to requisition forms authorizing testing for patients they never examined and were in no way involved in the patients’ care or treatment. In order to keep the scheme going, Kahl used fraudulent email accounts to access the individually identifiable health information of the senior citizens, specifically the results of the DNA analysis.
Kahl, Rehfuss and others caused the Medicare program to pay more than $1 million to two clinical laboratories. Rehfuss obtained over a hundred thousand dollars and distributed commissions to Kahl of tens of thousands of dollars.
The investigation revealed that Rehfuss and others were actively working towards expanding the scheme outside of New Jersey into other states, including: Georgia, Delaware, Virginia, Maryland, Pennsylvania, South Carolina, Michigan, Mississippi, Florida, Tennessee and Arizona.
The healthcare fraud conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy to wrongfully access individually identifiable health information and to pay kickbacks charge carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 14, 2017.
Rehfuss was originally charged for his role in the scheme on Dec. 2, 2015. The pending charges against Rehfuss are merely allegations, and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Lampert, as well as investigators from the U.S. Attorney’s Office for the District of New Jersey, the U.S. Marshals Service Asset Forfeiture Program, the Cape May County Department of Consumer Affairs, and the Cape May County Office of Aging with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Office Health Care and Government Fraud Unit.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Stacy A. Biancamano, Esq.
Newark, New Jersey, Man Admits Posing as Law Enforcement Officer During Home Invasion of Paterson, New Jersey, ResidenceRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man today admitted trying to rob a Paterson, New Jersey, residence while dressed in a Passaic County Sheriff’s uniform, U.S. Attorney Paul J. Fishman announced.
Clemente R. Carlos, 29, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with one count of conspiracy to commit Hobbs Act robbery.
According to documents filed in this case and statements made in court:
Carlos admitted that on Aug. 12, 2015, he conspired with Jason Thompson, 33, of Paterson, and another individual to rob a Paterson home because they believed the resident kept cash proceeds from his distribution business at that location. Carlos and Thompson both dressed in Passaic County Sherriff’s uniforms in order to gain entry into the residence, while the third individual waited outside in a getaway vehicle.
During the robbery, one of the conspirators broke open a piece of furniture in search of the cash proceeds. In addition, the conspirators threatened to kill the residents if they did not comply with their instructions during the robbery. Carlos admitted that during the robbery one victim was physically restrained.
The Hobbs Act conspiracy charge to which Carlos pleaded guilty carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for April 4, 2017.
Thompson was charged by complaint on July 21, 2016 with Hobbs Act robbery conspiracy and being a felon in possession of a firearm. The allegations against him are merely accusations, and he is innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and members of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s guilty plea. He also thanked the Passaic County Sheriff’s Office and the Paterson Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.
Defense counsel: Gary Cutler Esq., Newark
New York Man Admits Role in Attempted Sex Trafficking of A MinorRead the Press Release
WILKES-BARRE- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Adrian Smith, age 21, of New York, pleaded guilty on November 29, 2016, before United States Magistrate Judge Joseph F. Saporito, Jr., in Wilkes-Barre, to attempted sex trafficking of a minor.
According to United States Attorney Bruce D. Brandler, Smith admitted to assisting others in maintaining a minor for the purpose of having the minor engage in prostitution during August 2016, at a hotel in Scranton. Smith also admitted that he provided prostitutes with a place to stay and provided protection for the minors in connection with the attempted sex trafficking activities.
Judge Saporito ordered a pre-sentence investigation to be completed. Sentencing in the case will be scheduled by Senior United States District Court Judge Richard P. Conaboy.
The case was investigated by the Federal Bureau of Investigation and the Scranton Police Department. Assistant United States Attorney Francis P. Sempa is prosecuting the case.
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."
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is life imprisonment, a term of supervised release following imprisonment, and a fine. There is also a mandatory minimum sentence of 10 years in prison. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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New Port Richey Pair Indicted on Money Laundering ConspiracyRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging David Owen (39) and Andrew Corrigan (23), both of New Port Richey, with one count of money laundering conspiracy. If convicted, each faces a maximum penalty of 20 years in federal prison. The indictment also notifies the defendants that the United States is seeking a money judgment in the amount of at least $547,149, the proceeds of the conspiracy.
According to the indictment, Owen and Corrigan used individuals (straw account owners) to open bank accounts into which their victims deposited money. The money was extorted from victims by impersonators falsely representing that the victims owed federal income tax to the Internal Revenue Service (IRS), the Canadian tax authorities, or for other financial obligations. The conspirators told victims that if they failed to pay these obligations, they or their family members would face arrest, prosecution, or other legal consequences.
Provided with online access to accounts, the conspirators monitored the victims’ deposits in order to ensure timely withdrawals by the straw account owners. In order to make the withdrawals at the bank, the conspirators provided the straw-account owners with the victims’ names, locations, and amounts of the deposits. The defendants then directed the straw-account owners to withdraw the funds in cash and turn it over to them, often minus a payment to the straw-account owner for opening the account or conducting the transaction.
An indictment is merely a formal charge that a defendant has violated one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Internal Revenue Service – Criminal Investigation, Treasury Inspector General for Tax Administration, the Federal Bureau of Investigations, United States Postal Inspection Service, the Pinellas County Sheriff’s Office, the Pasco County Sheriff’s Office, the Largo Police Department, the Gulfport Police Department, and the Royal Canadian Mounted Police. It will be prosecuted by Assistant United States Attorney Kelley Howard-Allen.
Mountain States Health Alliance Settles Americans with Disability Act Claim with United StatesRead the Press Release
GREENEVILLE, Tenn. - The United States reached a settlement on November 30, 2016, with Mountain States Health Alliance (MSHA), a not-for-profit health care organization based in Johnson City, Tenn., that operates 13 hospitals serving a 29-county region spanning northeast Tennessee, southwest Virginia, southeastern Kentucky, and western North Carolina. In a complaint filed in the U.S. District Court for the Eastern District of Tennessee at Greeneville, Christopher and Donna Cantrell, both of whom are deaf, alleged that they were denied effective communication under Title III of the Americans with Disabilities Act (ADA) during several admissions of their adult daughter to the Johnson City Medical Center (JCMC), a MSHA facility. The admissions at JCMC, which totaled 115 days, were for treatment of high-grade Burkitt’s lymphoma. Their daughter succumbed to the disease in May 2015 while she was still in the hospital.
The Cantrells alleged in the lawsuit that they were not provided with an interpreter or other auxiliary aid until shortly before their daughter’s death. Instead, the Cantrells alleged that they were forced to rely on their daughter and other family members, all of whom were able to hear, to interpret for them. As a result of the complaint, the U.S. Attorney’s Office for the Eastern District of Tennessee opened a civil investigation under the ADA.
As a result of the settlement, MSHA has agreed to implement measures for all of its hospitals that are aimed at protecting the rights of patients and companions who are deaf or hard of hearing. Those measures include the following: (1) appointing an ADA administrator at each facility to provide oversight and guidance; (2) identifying services that can provide interpreters to each facility in a timely manner; (3) providing notice to patients and their companions of their rights under the ADA; (4) developing an assessment plan to effectively determine the appropriate auxiliary aid for each situation; (5) providing annual training about the rights afforded by the ADA and MSHA’s policy to meet those requirements; and (6) compliance reports to be submitted to the U.S. Attorney’s Office for monitoring. The agreement is effective for 3 years. In addition, MSHA will pay the United States a statutory penalty in the amount of $50,000. This is the largest civil penalty that any U.S. Attorney’s Office has received in a matter involving effective communication in hospital settings.
“Individuals who are deaf or hearing impaired must not be denied equal access to interpretive services in medical entities such as hospitals and other medical facilities that are covered under the ADA,” said U.S. Attorney Nancy S. Harr. “I commend MSHA for cooperating in our investigation and working to promote more effective communications with persons who are deaf or hard of hearing.”
Assistant U.S. Attorneys Kenny L. Saffles and Leah W. McClanahan represented the United States in the investigation.
Members of the public should be reminded that the claims settled by this agreement are allegations only and that there has been no determination of liability.
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Metro PCS Armed Robber Sentenced to 32 Years in Federal PrisonRead the Press Release
Jacksonville, Florida – U.S. District Judge Timothy J. Corrigan sentenced Christopher McCain (27, Anniston, AL) yesterday to 32 years in federal prison for two counts of robbery and brandishing a firearm in furtherance of a crime of violence. He pleaded guilty on July 3, 2014.
According to court documents, McCain robbed three different Metro PCS stores during January 2012. He carried a loaded .45 caliber pistol during each of the robberies and took a total of $2,211 from the stores. McCain was arrested on January 28, 2012, after a Metro PCS store employee was able to get the tag number of McCain’s getaway car. McCain was still in possession of his loaded .45 caliber pistol when officers from the Jacksonville Sheriff’s Office arrested him.
This case was investigated by the Jacksonville Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Frank Talbot.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
McAlester Man Pleads Guilty to Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that MICHAEL DAVID LINCOLN, age 40, of McAlester, Oklahoma, pled guilty to DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A), punishable by not less than 10 years or more than life imprisonment, and up to a $10,000,000.00 fine or both.
The Superseding Indictment alleged that beginning in or about the end of 2013, the exact date being unknown, until on or about January 27, 2016, the Defendant, did willfully and knowingly combine, conspire, confederate and agree together, and with other persons known and unknown, to Possess with Intent to Distribute and to Distribute 500 grams or more of a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II Controlled Substance.
The charges arose from a joint investigation by the Oklahoma Bureau of Narcotics, the Tahlequah Police Department, the Muskogee Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the Drug Enforcement Administration. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report. The defendant will remain in custody pending a sentencing hearing.
Assistant United States Attorney Shannon Henson represented the United States.
Married Couple Sentenced to More Than Six Years in Federal Prison for Tax Fraud and Identity TheftRead the Press Release
Tampa, FL – U.S. District Judge Virginia M. Hernandez Covington today sentenced Jessieca Omowele (30, Tampa) and her husband, Kevin B. Jones (31, Tampa) to six years and three months in federal prison for theft of government property and aggravated identity theft stemming from their involvement in a stolen identity tax fraud (SIRF) conspiracy. The Court also ordered them to pay restitution to the Internal Revenue Service in the amount of $1,586,245.39, which are the proceeds traceable to the conspiracy.
Both Omowele and Jones pleaded guilty on September 7, 2016.
According to court documents, from at least 2011, through and including 2015, Omowele and Jones, together and with others, agreed and conspired to electronically file fraudulent federal income tax returns using the personal identifiable information (PII) of unknowing identity theft victims, some of whom were deceased, in order to obtain tax refunds to which they were not entitled. Many, if not all, of these returns were electronically filed from the defendants’ residence, with the refunds directed to be deposited onto debit cards in the conspirators’ names and/or sent to addresses associated with the conspirators. Omowele and Jones then used the debit cards at retail stores, ATMs, and to make online purchases. Records show that they also used their victims’ information to obtain utility service at their home and to apply for student loans, all without their victims’ knowledge or consent.
To date, the IRS has determined that the conspirators filed and caused to be filed false and fraudulent federal income tax returns using stolen PII from over 1,500 individuals, claiming refunds totaling $9,424,989.41. As a result of the scheme, the conspirators received $1,586,245.39 in proceeds.
This case was investigated by the Internal Revenue Service – Criminal Investigation and the Tampa Police Department. It was prosecuted by Assistant United States Attorney Mandy Riedel.
Lubbock Defendants Affiliated with Crips Criminal Street Gang Plead Guilty to Roles in Cocaine Distribution ConspiracyRead the Press Release
LUBBOCK, Texas — Today, Dequan Deshawn Willard, 22, of Lubbock, Texas, appeared before U.S. Magistrate Judge D. Gordon Bryant and pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute cocaine base and one count of possession of a firearm in furtherance of a drug trafficking crime, announced U.S. Attorney John Parker of the Northern District of Texas. Willard faces a statutory penalty of not less than five years or more than 40 years in federal prison and a $4 million fine for the conspiracy charge and a statutory penalty of no less than five years and up to life and a $250,000 fine for the firearm charge.
Yesterday, three co-conspirators: William Emmanuel Spence, 27, Jasmine Jamal Spence, 28, and Antonio Deon Ray Montgomery, 21—all brothers—each pleaded guilty before Judge Bryant to one count of conspiracy to distribute and possess with intent to distribute cocaine and cocaine base. All three defendants face a statutory penalty of not less than five years or more than 40 years in federal prison and a $4 million fine.
Judge Bryant ordered presentence reports for each of the defendants with sentencing dates to be set after the completion of those reports.
According to documents filed in the case, the defendants are either confirmed or suspected members of the Crips criminal street gang in Lubbock.
As part of a joint investigation by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), and the Lubbock County Sheriff’s Office, law enforcement executed a search warrant at a residence on East 1st Place Street in Lubbock on June 16, 2016, where officers had made a controlled purchase from co-defendant Dequan Willard a few days earlier. Willard was present during the search in which officers recovered approximately 40 grams of cocaine base.
In September 2016, officers conducted several controlled purchases of cocaine base from Jasmine and William Spence. On October 4, 2016, officers executed search warrants at four residences in Lubbock related to the investigation.
Antonio Montgomery was arrested at a residence on East Cornell and he directed officers to where the cocaine base was kept in the house and officers recovered approximately 110 grams of cocaine base. Montgomery advised the residence belonged to William Spence. Officers also found items associated with the production and sale of cocaine base as well as a loaded firearm.
William Spence was located at a residence on 40th Street. He had $1,379 in cash on his person and $15,020 in cash in a shoe box in the garage. Officers also located a case matching the firearm found at the East Cornell location.
Officers also searched a location on Knoxville Street in Lubbock known to be the residence of Dequan Willard and William Spence. Dequan Willard was arrested at the residence and a loaded firearm was located in the bed where he had been sleeping. In a shoe box with the name “Tucc”—Willard’s street name—written on the side, officers found approximately 427 grams of cocaine. Officers also found another bag in the residence that contained 427 grams of cocaine and also located $8,900 cash in William Spence’s bedroom. Inside of a red pickup truck parked at the residence, officers recovered an additional 84 grams of cocaine; Willard had been observed driving this pickup and his mail was found in the truck. Officers also located an additional 997 grams of cocaine in a Chevrolet Impala at the residence. Inside the vehicle, officers located documents belonging to William Spence and photos depicting both William and Jasmine Spence.
Jasmine Spence was arrested at a residence on 69th Street, where officers located approximately 40 grams of cocaine base in a kitchen drawer and an additional eight grams of cocaine base in sock in Jasmine Spence’s bedroom. Officers also discovered $7,410 in cash in the residence as well as a loaded handgun.
ICE, HSI, and the Lubbock County Sheriff’s Office are conducting the investigation. Assistant U.S. Attorney Sean Long is in charge of the prosecution.
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Local Crack Dealer Sentenced to 46-Months ImprisonmentRead the Press Release
Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced that Andrew Autoomp, 28, of East St. Louis, was sentenced on November 29, 2016 in United States District Court in East St. Louis to 46 months in federal prison for one count of conspiring to distribute and possess with the intent to distribute cocaine base (commonly referred to as crack cocaine) and two counts of distribution of cocaine base. Autoomp was also sentenced to three years of supervised release to follow the imprisonment and ordered to pay $300 in special assessment fees.
Facts revealed in open court during the change of plea and sentencing hearings established that during the course of the conspiracy, Autoomp distributed both cocaine and crack cocaine in East St. Louis, Illinois during 2015. After considering sentencing factors including Autoomp’s age and vital role in the conspiracy, the district court sentenced Autoomp to 46 months of imprisonment.
The case was investigated by the United States Drug Enforcement Administration and prosecuted by Assistant United States Attorney Monica A. Stump.
Leader of $11 Million Healthcare Fraud Scheme Sentenced to 16 YearsRead the Press Release
CHARLOTTE, N.C. – Cynthia Teresa Harlan, 49, of Charlotte, was sentenced yesterday to 192 months in prison for orchestrating a health care fraud scheme that fraudulently billed Medicaid for more than $11 million in false claims and stealing the identity of others to accomplish the fraud, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Chief U.S. District Judge Frank D. Whitney ordered Harlan to serve three years of supervised release and to pay $3,100,249 as restitution to Medicaid.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in North Carolina joins U.S. Attorney Rose in making today’s announcement.
A federal jury convicted Harlan in July 2016, of one count of health care fraud conspiracy, three counts of making false statements relating to health care matters, three counts of aggravated identity theft and one count of obstruction of a health care fraud investigation.
Harlan’s co-defendant, Claude Bernard McRae, who was convicted by the same jury of one count of health care fraud conspiracy, was also sentenced yesterday to 88 months in prison. McRae, 38, of Hamlet, N.C., was also ordered to serve three years under court supervision and to pay $1,615,499.22 as restitution.
According to trial evidence, filed documents and the sentencing hearing, between October 2012 and August 2013, Harlan used a network of accomplices to carry out an extensive health care fraud scheme involving the fraudulent submission of fake reimbursement claims to Medicaid for services that were never actually provided to beneficiaries. Harlan owned and operated Heartland Consulting and Marketing, Inc., a Charlotte-area company, purportedly specializing in the operation of mental health companies and Medicaid reimbursement. Harlan recruited a team of individuals that included the owners of outpatient mental and behavioral health services companies, mental health practitioners, note writers, patient recruiters, mental and behavioral health services providers and medical billers, and directed them to fabricate the necessary paperwork used to support the fraudulent claims billed to Medicaid.
The fabricated paperwork included the names and beneficiary information of Medicaid recipients, fabricated intake packets, non-existent mental health diagnoses and made-up treatment plans and fake dates of service. It also included fake notes describing therapy services that never occurred. All of this information was organized in a manner to make it appear that the companies and clinicians involved in the scheme had provided legitimate therapy beneficiaries, contrary to the truth. The patient files were intended to deceive Medicaid auditors in case there was an inquiry about the accuracy of the fake claims.
McCrae and his business partner and indicted co-conspirator, Tyree Craig Jones, were the co-owners of two outpatient mental and behavioral health services companies, Kings of Carolina Care 1, Inc. (Carolina Care 1), and Esteem Family Life Center, LLC (Esteem), both located in Rockingham, N.C. The two men partnered with Harlan and others to submit false reimbursement claims to Medicaid, claiming that the two entities provided mental and behavioral health services to the Medicaid recipients, when, in reality no services were provided at all. According to court records, Jones and McCrae, through Carolina Care 1, attempted to obtain from Medicaid over $5 million in fraudulent reimbursement claims and received over $1.3 million from Medicaid for the fraudulent claims.
Evidence at trial demonstrated that Harlan, Jones and McRae accomplished some of the fraud by misappropriating the Medicaid identification number of doctor. This doctor had never agreed to be part of Carolina Care 1, yet the group claimed that this doctor had provided over $2.3 million in therapy services to Medicaid recipients in just one year. Additionally, evidence presented at trial demonstrated that the false claims submitted by Carolina Care 1 indicated that Carolina Care 1 allegedly serviced over 500 clients in a single day.
According to court records, Harlan misused the names and Medicaid identification numbers of hundreds of Medicaid beneficiaries, including A.H., B.H. and M.H., in order to accomplish the scheme. According to the mothers of A.H. and M.H., who testified at trial, their children did not have mental health issues and never received any therapy services from any company. Harlan received over $400,000 for her role in the scheme.
When Harlan became aware that she was being investigated for Medicaid fraud, Harlan directed some of her co-conspirators to destroy records as well as incriminating emails and text messages relevant to the scheme for the purpose of obstructing the investigation.
Co-defendant Jones pled guilty on the last day of trial and, earlier this month, was sentenced to 85 months in prison and three years of supervised release. Jones was also ordered to pay $1,615,499 as restitution Additionally, to date, the following individuals have been prosecuted federally in connection with this health care fraud conspiracy:
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Aliya Boss was previously sentenced to 44 months in prison, three years supervised release and was ordered to pay $1,135,302 in restitution. Boss filed reimbursement claims to Medicaid fraudulently cliaming that she had provided mental health services to beneficiaries.
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Alexander Bass and Torrey Darnell Moton were previously sentenced to 32 and 25 months in prison, respectively, three years of supervised release and were ordered to pay $370,372 as restitution. Bass and Moton owned United Rehabilitation Services (URS), in Erwin, N.C., and filed reimbursement claims to Medicaid fraudulently claiming that URS provided mental health and behavioral health services to beneficiaries.
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Sakeenah Davis and Kino Williams were previously sentenced to 42 and 35 months in prison, respectively, three years supervised release and were ordered to pay $ 506,124 in restitution. Davis and Williams owned New Choices Youth and Family Services, in Charlotte, North Carolina, and filed reimbursement claims to Medicaid fraudulently claiming that URS provided mental health and behavioral health services to beneficiaries.
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Jacqueline Ford was previously sentenced to 21 months in prison and three years of supervised release and was ordered to pay $442,679 restitution. Ford fabricated notes to support the false claims submitted by Carolina Care 1, URS and other companies.
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Zaria Humphries was previously sentenced to 24 months in prison and three years of supervised release and was ordered to pay $222,037 in restitution. Humphries submitted false claims through her company Life Impact Solutions.
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Tanisha Melvin was sentenced to 33 months in prison, three years of supervised release and was ordered to pay $392,159.81 in restitution. Melvin was responsible for creating fake patient records for the conspiracy.
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LaChanda Clotiel Parks, also responsible for generating fake patient paperwork, was sentenced to 28 months in prison followed by three years of supervised release, and was ordered to pay $352,565 in restitution for her role in the conspiracy.
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Dr. Wanda Webb was sentenced two years’ probation and ordered to pay $79,338.74 in restitution. Webb also submitted fraudulent claims through her company, Cornerstone Counseling and Consulting.
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D’Marcus White, also responsible for generating fake patient paperwork, was previously sentenced to two years’ probation.
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Jason Adam Townsend is also facing health care fraud conspiracy and aggravated identity theft charges, for submitting fraudulent claims through his medical billing services company, Townhall Enterprises, LLC, located in Raeford, N.C. His trial is currently scheduled to begin in January 2017.
Harlan is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. McRae will be ordered to self-report at a later date. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI with assistance from the North Carolina Medicaid Investigations Division. In making today’s announcement, U.S. Attorney Rose also thanked the Rockingham Police Department and the Richmond County Sheriff’s Office for their assistance at trial. The United States is being represented by Assistant U.S. Attorneys Kelli Ferry and Daniel Ryan, of the U.S. Attorney’s Office in Charlotte.
The investigation is the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
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