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14 December 2016
U.S. Attorney's Office collects over $6.5 million for taxpayers in Fiscal Year 2016Read the Press Release
CHARLESTON, W.Va. – The United States Attorney’s Office for the Southern District of West Virginia has collected $6,668,404.52 in the last year, which represents over $1.1 million more than the office’s annual direct budget, announced United States Attorney Carol Casto. Of this amount, $1,511,417.96 was collected in criminal actions, $4,591,072.32 was collected in civil actions, and $565,914.24 was collected in asset forfeiture. The U.S. Attorney’s Office collected this amount through the efforts of the attorneys and staff within the office, and also by working with other U.S. Attorneys’ offices, components of the Department of Justice, and other federal agencies.
Attorney General Loretta E. Lynch announced today that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
United States Attorney Carol Casto noted, “The over $6 million collected by this office more than covers the direct operating budget of the office for the entire fiscal year. The strong collaboration of the attorneys and staff of the civil and criminal divisions with federal, state, and local law enforcement agencies makes these significant collections possible. Though our top priority is always ensuring the safety of our communities, we also work together with our law enforcement partners to hold wrongdoers responsible for the financial losses associated with their offenses.”
A substantial amount of the collection total came from the prosecution of Freedom Industries and six defendants associated with Freedom for the 2014 chemical spill that left hundreds of thousands of people in the Kanawha Valley without water for several days. Freedom paid nearly $600,000 to resolve its federal bankruptcy case. Additionally, the individuals prosecuted, including two former presidents of Freedom, have paid over $86,000 in fines as part of their sentences. Another corporate officer held accountable for criminal activity was former Massey Energy CEO Don Blankenship. Never before in U.S. history had the CEO of a publicly traded company been convicted of a workplace safety crime. His trial ended with a jury finding him guilty, and in April 2016, as part of his sentence, Blankenship was ordered to spend one year in federal prison and to pay a $250,000 fine.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
In addition to the civil and criminal collections, the U.S. Attorney’s Office, working with partner agencies and divisions, collected $565,914.24 in asset forfeiture actions in fiscal year 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes. This brings the total amount collected by the U.S. Attorney’s Office in fiscal year 2016 to $6,668,404.52. The fiscal year began on October 1, 2015, and ended on September 30, 2016.
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Two Individuals Sentenced to Prison for Fraud in Connection with BP Oil SpillRead the Press Release
Gulfport, Miss – Thi Houng Le a/k/a Kristy Le, age 34, of Pascagoula, and Gregory P. Warren, age 52 of Lafayette, Louisiana, were sentenced today by Chief U.S. District Judge Louis Guirola for conspiracy to commit identity theft, aggravated identity theft, mail fraud and wire fraud in connection with a lawsuit against BP, announced U.S. Attorney Gregory K. Davis and U.S. Secret Service Special Agent in Charge Craig Caldwell.
Le was sentenced to 84 months in federal prison followed by 3 years of supervised release. She was also ordered to pay a fine in the amount of $25,000.00. Warren was sentenced to 204 months in federal prison followed by 3 years of supervised release. He was also ordered to pay a fine in the amount of $25,000.00. The defendants were convicted by a jury following a four-week trial before Chief U.S. District Judge Louis Guirola in August, 2016.
The defendants in this case carried out a conspiracy to defraud numerous victims from multiple states and the BP Gulf Coast Claims Facility by obtaining names, addresses, dates of birth, and social security numbers from any source available to create “clients” for anticipated litigation as a result of the Deepwater Horizon Oil Spill. The defendants fraudulently submitted names of over 40,000 individuals as plaintiffs in litigation related to the Deepwater Horizon/BP oil spill, knowing that the individuals had not consented to be represented by the law firm. They also submitted stolen and false social security numbers, dates of birth, addresses, and occupations.
This case was investigated by United States Secret Service and prosecuted by Assistant U.S. Attorneys Jerry Rushing and Gregg Kennedy.
Two Convicted After Trial for Illegal Entry from CanadaRead the Press Release
SYRACUSE, NEW YORK – Rostislav Skalka, 48, of the Czech Republic and Robert Bella, 45, of Slovakia were each convicted of one count of illegal entry into the United States following a one-day, non-jury trial in federal court yesterday. The announcement was made by United States Attorney Richard S. Hartunian and John C. Pfeifer, Chief Patrol Agent, Swanton Sector, United States Border Patrol.
At trial, the evidence established that Skalka and Bella entered the United States from Canada near Waddington, New York, by crossing the St. Lawrence River in a makeshift raft and without immigration inspection at a valid port of entry. Following the verdict, United States Magistrate Judge David E. Peebles sentenced the defendants to time served (three months) in connection with their convictions for these misdemeanor offences. Skalka and Bella are expected to face deportation following further proceedings.
The case was investigated by the United States Border Patrol and was prosecuted by Assistant United States Attorney Sahar L. Amandolare.
Three Delray Beach Return Preparers Plead Guilty to Preparing False Tax Returns for ClientsRead the Press Release
Three Delray Beach tax return preparers pled guilty to unlawfully enriching themselves by submitting false federal income tax returns to the Internal Revenue Service (IRS) on behalf of their clients.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Devonne Herrington, 64, her son, Lorenzo Wright, 49, and co-defendant Joyce Walker, 61, all of Delray Beach, pled guilty to one count of conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371. Herrington also pled guilty to one count of failure to file personal tax returns, in violation of Title 26, United States Code, Section 7203. Walker also pled guilty to one count of filing false personal tax returns, in violation of Title 26, United States Code, Section 7206(1).
Walker is scheduled to be sentenced on January 27, 2017, and Herrington and Wright are scheduled to be sentenced on February 17, 2017, all before United States District Judge Robin L. Rosenberg. At sentencing, the defendants face up to five years in prison for the conspiracy charge. Walker also faces up to three years in prison for filing false tax returns. Herrington also faces up to one year in prison for the failure to file tax returns charge.
According to court documents, Herrington established and operated a tax preparation business in Delray Beach, Florida, that was initially known as Devonne's LLC and later known as Wright's & Family LLC. Herrington hired tax preparers, including her son, Wright, and co-defendant Walker, to assist her with preparing tax returns for her clients. Herrington, Wright and Walker met with clients in person at the tax preparation office in order to conduct a cursory interview and collect required tax forms.
Although the clients did not claim to be eligible for, or provide documents in support of, certain tax credits or income deductions, the defendants prepared tax returns which falsely stated that the clients were eligible for such credits and deductions. The tax credits falsely claimed by the defendants included credits for first time home purchasers and education expenses. The income deductions falsely claimed by the defendants included deductions for business expenses and for being the head of household. These false and fraudulent credits and deductions reduced the clients' tax liability and increased their tax refunds.
The defendants claimed the false tax credits and deductions on IRS schedules and forms which were included in the clients' tax returns. Herrington, Wright, and Walker charged the clients extra fees for these additional fraudulent schedules. In most instances, the defendants did not review the returns with the clients prior to filing them with the IRS and did not provide copies of the returns to the clients.
Many clients have since been audited by the IRS and now have to pay back the refunds they received as a result of the fraudulent credits and deductions added to their tax returns by the defendants.
Herrington did not file her personal income tax returns for calendar years 2010 and 2011. In addition, Walker filed her personal income tax returns for calendar years 2010 and 2011 containing false claims for the Education Expense Credit.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Ellen L. Cohen.
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.
Three Cedar County Men Sentenced to Federal Prison on Meth Manufacturing ChargesRead the Press Release
Last week, three Cedar County men were sentenced to federal prison on methamphetamine manufacturing charges. Telly Ranzenberger and Brian Hagen were sentenced to 60 months’ imprisonment and 48 months’ imprisonment, respectively. In a separate case, Tracey McGhghy was sentenced to 90 months’ imprisonment
Hagen, 43, and Ranzenberger, 42, from Lowden, Iowa, and McGhghy, 48, from Manley, Iowa, received the prison terms after pleading guilty to conspiring to manufacture methamphetamine. At separate plea hearings, each defendant admitted that he entered into a conspiracy to manufacture methamphetamine.
Ranzenberger and Hagen were sentenced in Cedar Rapids by United States District Court Senior Judge Mark W. Bennett. McGhghy was sentenced in Cedar Rapids by United States District Court Judge Leonard T. Strand. Each defendant was ordered to serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
The cases were prosecuted by Assistant United States Attorney Ravi T. Narayan and investigated by the Cedar County Sheriff’s Office. The Cedar County Sheriff’s Office received assistance from the Muscatine County Drug Task Force, the Iowa State Patrol, the Iowa Division of Narcotics Enforcement, and the Johnson County Drug Task Force.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are 16-CR-42 and 16-CR-60
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South Bend Man Sentenced to 444 Months ImprisonmentRead the Press Release
SOUTH BEND – United States Attorney for the Northern District of Indiana, David Capp, announced that Ivan Brazier, 40, of South Bend, Indiana was sentenced before South Bend District Court Judge Robert Miller, Jr. for kidnapping and extortion.
Brazier was sentenced to 444 months imprisonment and 1 year supervised release.
According to documents filed in this case, Brazier and his codefendants possessed firearms as felons to unlawfully confine or kidnap an individual and demanded a ransom for that individual’s release. A firearm was discharged, hitting the victim, during the kidnapping. Two co-defendants, Lindani Mzembe and Derek Fields were convicted in separate trials of kidnapping, extortion, being a felon in possession of a firearm, and use of a firearm in a crime of violence. Mzembe is scheduled to be sentenced on January 5, 2017, and Fields is scheduled to be sentenced on February 22, 2017.
This case was prosecuted as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Federal Bureau of Investigation; South Bend Police Department and the St. Joseph County Metro Homicide. This case was prosecuted by Assistant United States Attorneys John M. Maciejczyk and Joel Gabrielse.
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Scranton Man Sentenced to Six Years in Prison for Role in Sex Trafficking ConspiracyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Justin Strait, age 26, of Scranton, Pennsylvania, was sentenced to six years in prison on December 13, 2016, by Senior U.S. District Court Judge James M. Munley in Scranton, for his role in a sex trafficking conspiracy that used a minor to engage in prostitution at several hotels and motels in Northeastern Pennsylvania.
According to United States Attorney Bruce D. Brandler, Strait previously admitted that he assisted three other men in the sex trafficking activity during early-to-mid 2014. Strait pleaded guilty in July 2015.
Judge Munley also ordered Strait to serve five years on supervised release following his prison sentence. Strait must also register as a sex offender and comply with all sex offender notification requirements of federal and state law.
Three other men connected to the sex trafficking conspiracy have also pleaded guilty: Sean Cantelmo was sentenced to 151 months in prison; Jimmy Cantelmo was sentenced to 10 years in prison; and Mark Matis is awaiting sentencing.
Strait and/or his co-conspirators recruited the minor to engage in prostitution, rented motel rooms for purposes of prostitution, provided condoms to the minor, photographed the minor and posted advertisements for “escort services” on a website, provided illegal drugs to the minor, and acted as security during prostitution activities.
The case was investigated by Homeland Security Investigations and the Pennsylvania State Police. Assistant U.S. Attorney Francis P. Sempa prosecuted 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."
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Rhode Island Man Charged with Traveling to Connecticut to Engage in Sex with MinorRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that a federal grand jury in Hartford returned an indictment today charging NICHOLAS MURPHY, 27, of Exeter, R.I., with one count of traveling to engage in illegal sexual activity with a minor.
The indictment alleges that in September 2015, MURPHY travelled from Rhode Island to Connecticut for the purpose of engaging in a sexual act with a minor
If convicted of the charge, MURPHY faces a maximum term of imprisonment of 30 years.
MURPHY was arrested on related state charges on May 9, 2016. He is scheduled to be arraigned on December 28 in Hartford federal court.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation, Plainfield Police Department and Rhode Island State Police. The case is being prosecuted by Assistant U.S. Attorney Nancy V. Gifford.
Poca man sentenced to over seven years in federal prison for gun chargeRead the Press Release
CHARLESTON, W.Va. – A Poca man caught with a loaded gun and drugs after a car chase was sentenced today to seven years and three months in federal prison for a gun crime, announced United States Attorney Carol Casto. Steven Eugene Adkins, 37, previously pleaded guilty to being a felon in possession of a firearm.
Adkins admitted that on January 14, 2016, he possessed a loaded Smith & Wesson Model 22A-1 pistol. Adkins was prohibited under federal law from possessing any firearm because of two previous convictions in Kanawha County Circuit Court for possession with intent to deliver marijuana. At the time Adkins possessed the handgun, Adkins additionally admitted that he ran a red light in St. Albans. In response, a St. Albans Police Department patrol officer attempted a traffic stop. Adkins further admitted that he did not attempt to stop, and during the course of the subsequent chase, he exceeded the speed limit, passed vehicles despite the double yellow line, and drove the wrong way on a one-way street. The car chase ended in Nitro and Adkins admitted that he exited the vehicle and was apprehended after a brief foot chase. Law enforcement recovered the gun and methamphetamine from Adkins. Officers also seized 40 knives and a machete from the vehicle.
The investigation was conducted by the St. Albans Police Department, the Metropolitan Drug Enforcement Network Team, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the West Virginia State Police and the South Charleston Police Department. Assistant United States Attorney Clint Carte is responsible for the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime. This case was also prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat illegal drugs in our communities, including methamphetamine. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Pioneer man charged with stealing firearmsRead the Press Release
A Pioneer man was charged with stealing firearms, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio.
A criminal information was filed charging Kyle Shirey, 34, with theft of a firearm from a firearms dealer and receipt and possession of a firearm not registered through the Bureau of Alcohol, Tobacco, Firearms and Explosives.
If convicted, the defendant’s sentence will be determined by the court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Toledo, Ohio. The case is being handled by Assistant United States Attorney Tracey Ballard Tangeman.
A charge 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.
Physician Indicted for Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Kansas City, Mo., physician was indicted by a federal grand jury today on charges related to child pornography.
Jeffrey A. Hassenflug, 41, formerly of Kansas City, was charged in a three-count indictment returned by a federal grand jury in Kansas City, Mo. Hassenflug, a physician, currently maintains a practice in Texas.
Today’s federal indictment alleges that Hassenflug distributed child pornography over the Internet from March 7 to May 12, 2016. Hassenflug is also charged with receiving child pornography over the Internet and with possessing child pornography of a child victim under the age of 12.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney David Luna. It was investigated by the FBI.
Project Safe Childhood
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."
Physician Charged with Conspiracy to Receive and Pay Illegal Health Care KickbacksRead the Press Release
U.S. Attorney Kenneth A. Polite announced that a one-count Bill of Information was filed yesterday against a local ophthalmologist charging him with paying approximately $231,034 in illegal kickbacks.
Specifically, JOBIE CREAR, M.D., age 65, New Orleans, was charged with conspiracy to receive and pay health care kickbacks. CREAR operated Comprehensive Nursing and Home Health Service, Inc. (Comprehensive) in New Orleans. CREAR is charged with illegally paying recruiters to bring Medicare beneficiaries to Comprehensive.
If convicted, CREAR, faces a possible maximum sentence of 5 years imprisonment and a $250,000 fine.
U.S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
The ongoing investigation is being conducted by Special Agents of the Federal Bureau of Investigation. U.S. Attorney Patrice Harris Sullivan is in charge of the prosecution.
Owner of Chesapeake Barber College Pleads Guilty to $4.5 Million GI Bill FraudRead the Press Release
NORFOLK, Va. – Katherine Grobes, 45, of Chesapeake, pleaded guilty today to a charge of conspiracy to commit wire fraud.
According to the statement of facts filed with the plea agreement, Grobes owns the College of Beauty and Barber Culture (CBBC), located in Chesapeake. CBBC was purportedly a barber and cosmetology school approved by the Department of Veterans Affairs to provide education and training to military veterans, including veterans who received tuition assistance under the Post-9/11 GI Bill. Grobes represented to the VA that CBBC provided full-time schooling to hundreds of veteran students beginning in October 2011. In reality, the school was a sham. Most veterans enrolled in CBBC courses received few, if any, hours of instruction from CBBC employees, and there were no tests, exams, or practical exercises given. Rather, students were directed to simply sign in and out of the school each day so that Grobes could report to the VA that they were enrolled and attending. In exchange, CBBC received Post-9/11 GI Bill tuition payments for each veteran from the VA. Based on Grobes’ provision of false information to the VA concerning the number of hours of instruction and the manner and quality of the instruction provided to veteran students, CBBC received over $4.5 million in Post-9/11 GI Bill tuition payments between October 2011 and September 2016. Grobes owns CBBC along with her husband, William Grobes, who pleaded guilty on November 30, to charges of conspiring to commit wire fraud and money laundering.
Grobes was charged by criminal information on December 2, and faces a maximum penalty of 5 years in prison when sentenced on March 10, 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; Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs; Andrew L. Traver, Director of the Naval Criminal Investigative Service (NCIS); and Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after the plea was accepted by U.S. Magistrate Judge Douglas E. Miller. Assistant U.S. Attorney V. Kathleen Dougherty is 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. 2:16-cr-164.
Owner of Axis Benefit Administrators Sentenced to 46 Months in Prison for Theft of $3 Million from HRA FundsRead the Press Release
PORTLAND, Ore. – On Wednesday, December 14, 2016, U.S. District Judge Robert E. Jones sentenced Darren Bottinelli, 45, to 46 months in federal prison followed by three years of supervised release. Bottinelli was also ordered to pay $3,093,918 in restitution to his victims.
In March 2016, Bottinelli pled guilty to one count of theft in connection with health care, admitting that between 2009 and 2014 he stole approximately $3 million from individual health reimbursement accounts (HRA) under management by his company, Axis Benefit Administrators, Inc., also known as AXIS Health Partners.
Bottinelli served as the sole shareholder, officer and director of Axis, based in Portland, administering employee health reimbursement and flexible spending accounts for client employers nationwide. According to Axis contracts with employers, the company pledged to post employer contributions to trust accounts for participants who could then seek reimbursement for eligible health expenditures from their account funds.
On March 19, 2014, Bottinelli abruptly closed the Axis office without any communication to client employers or plan participants. As a result, over 3,000 plan participants were unable to access their account funds. Victims reported financial devastation, blocked access to necessary medical treatment and severe emotional trauma as a result of Bottinelli’s theft and failure to provide notice of the company’s closure.
Bottinelli’s client employers included government contractors and other companies who hire hourly and minimum wage contract workers. Some of his clients, including Goodwill Industries of South Texas, Morgan Memorial Goodwill Industries, Job Squad, Cascade Christian Services, VersAbility Resources (formerly known as the Arc of the Virginia Peninsula), and Vets Securing America, employed veterans, mentally and physically disabled adults and other vulnerable individuals.
Bottinelli improperly and repeatedly accessed trust account funds to maintain a luxurious lifestyle, including memberships to exclusive and private clubs, frequent high-end dining, expensive wine purchases, and first class travel.
“Mr. Bottinelli violated the trust placed in him and his company by thousands of honest, hardworking people,” said Billy J. Williams, United States Attorney for the District of Oregon. “These individuals diligently saved a portion of their pay to provide medical care for themselves and their loved ones, only to have their money stolen by Mr. Bottinelli for his own gain. This sentence serves as a reminder,” continued U.S. Attorney Williams, “that those who violate the trust of others under the guise of financial management and security will be vigorously investigated, prosecuted, and punished for their actions.”
“Darren Bottinelli treated these health care reimbursement accounts as his personal ATM without regard for the real hardship that he was causing thousands of hardworking people. These folks lost more than $3 million – money that had been set aside to pay for needed medical care for their families. Today’s prison sentence is a start on making things right, but the suffering he caused these victims will live on for some time,” said Greg Bretzing, Special Agent in Charge of the FBI in Oregon.
“Mr. Bottinelli decided to illegally enrich himself at the expense of hard working employees and their employers, and today he was held accountable,” said Jean Ackerman, Regional Director for the U.S. Department of Labor Employee Benefits Security Administration (DOL ESBA). “This case demonstrates how federal agencies work together to vigorously enforce criminal violations committed against employee benefit plans and their participants.”
The case was investigated by DOL ESBA, the FBI, and the U. S. Department of Labor, Office of the Inspector General (USDA OIG). The case was prosecuted by Donna Brecker Maddux, Assistant United States Attorney for the District of Oregon.
Owner of Toms River, New Jersey, Accounting Business Gets 37 Months in Prison for Swindling Clients Out of Tax RefundsRead the Press Release
CAMDEN, N.J. – A Toms River, New Jersey, woman was sentenced today to 37 months in prison for filing false tax returns and using her accounting business to cheat her clients out of their tax refunds, U.S. Attorney Paul J. Fishman announced.
Doreen Gentile, 62, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to Count 2 and Count 27 of an indictment, charging her with mail fraud and filing a false income tax return. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Gentile owned and operated her accounting business, Doreen A. Gentile & Associates, LLC (DAG & Associates), out of her home in Toms River. Gentile admitted that as part of her scheme, she would show her clients a tax return that indicated that they had no tax or refund due, owed a minimal amount of tax, or were due a refund that was far less than the amount to which they were entitled. Gentile then prepared a second set of tax returns, signed without her clients’ permission, that she submitted to the IRS or the State of New Jersey for the full tax refund.
Based on the second set of returns, the IRS or the State of New Jersey issued tax refund checks care of DAG & Associates and mailed them to the DAG & Associates post office box in Toms River. Gentile then deposited the tax refund checks into the DAG & Associates bank account without her clients’ permission. Afterwards, Gentile used the funds to pay for personal expenses.
Gentile also admitted that from 2006 through 2009, she failed to report to the IRS all of her income generated from DAG & Associates, including funds she stole as part of her refund scheme, resulting in tax losses of approximately $188,811.
In addition to the prison term, Gentile must serve three years of supervised release and pay restitution of $1,863,013.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, the for investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel: Christopher O’Malley Esq., Camden
Overdose Investigation Results in 30-Month Sentence for Norwich ManRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JONATHAN FISHER, 35, of Norwich, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 30 months of imprisonment, followed by three years of supervised release, for distributing heroin.
This matter stems from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
According to court documents and statements made in court, on April 9, 2016, Norwich Police responded to a medical emergency at FISHER’s residence. The emergency involved an 18-year-old male who had died from an apparent heroin overdose. FISHER was not present at the time law enforcement had arrived. A search of the victim’s wallet revealed one used glassine baggy and 10 unopened baggies marked with a particular brand stamp. A field test of the substance in the baggies yielded a positive presence for both heroin and fentanyl.
Approximately one month prior to the overdose death, FISHER was arrested by Norwich Police after he was found in possession of numerous baggies of heroin that were marked with the same stamp.
On April 12, 2016, Norwich Police arrested FISHER at a Norwich hotel. A search of FISHER’s wallet contained two glassine baggies containing suspected heroin and marked with the same brand stamp. A search of the hotel room where FISHER had been staying revealed more than 300 bags of heroin, prescription narcotics, more than one pound of marijuana, a digital scale and hundreds of empty glassine bags marked with the same stamp.
On May 2, 2016, FISHER pleaded guilty to one count of possession with the intent to distribute, and distribution of, heroin. FISHER, who had been released on bond, was remanded to the custody of the U.S. Marshals Service at the conclusion of today’s court proceeding.
This matter was investigated by the Drug Enforcement Administration’s New Haven Tactical Diversion Squad and the Norwich Police Department. The Tactical Diversion Squad includes members from the New Haven, Hamden, Greenwich, Shelton, Bristol, Vernon, Wilton, Milford, Monroe, Fairfield and Manchester Police Departments, and the Connecticut State Police.
This case was prosecuted by Assistant U.S. Attorney Avi M. Perry.
Northwest Arkansas Pair Receive Combined Sentence of over 22 Years in Prison for Drug TraffickingRead the Press Release
Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Allen Dwight Gailliot, age 62 of Fayetteville and Leslie Erin Curtis, age 45 of Bella Vista, were sentenced today on one count each of Conspiracy to Distribute Methamphetamine. Gailliot was sentenced to 151 months in federal prison followed by three (3) years of supervised release and ordered to pay a $3,400.00 fine. Curtis was sentenced to 121 months in federal prison followed by three (3) years of supervised release and ordered to pay a $5,900.00 fine. The Honorable Timothy L. Brooks presided over the sentencing hearings in the United States District Court in Fayetteville.
According to court records, on March 10, 2016, Leslie Curtis sold one ounce of methamphetamine to a confidential source from her residence in Fayetteville. On March 11, 2016, detectives from the 4th Judicial Drug Task Force executed a search warrant at Curtis’ and Gailliot’s two residences both located in Fayetteville. Detectives found approximately ½ pound of methamphetamine in each residence which was packaged for sale, digital scales, baggies, drug ledgers, and packages from the United States Postal Service (USPS) addressed to Gailliot that had been sent from California. Gailliot was found to be in possession of a card for a storage unit located in Fayetteville which was leased under Curtis’ name. Curtis told detectives that she and Gailliot would place orders for and receive pounds of meth at a time through the mail from California and would then distribute it throughout Washington County. On March 15, 2016, a search warrant was executed on the storage unit where approximately four (4) pounds of methamphetamine were located in USPS. parcels addressed to Gailliott.
Gailliot and Curtis were indicted by a federal grand jury in May, 2016 and pleaded guilty in September, 2016.
This case was investigated by the 4th Judicial Drug Task Force. Assistant United States Attorney Denis Dean prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Northern District of Texas U.S. Attorney’s Office Collects $27,693,232 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2016Read the Press Release
DALLAS – U.S. Attorney John Parker announced today that the Northern District of Texas collected $27,693,232 in criminal and civil actions in Fiscal Year 2016. Of this amount, $16,872,986 was collected in criminal actions and $10,820,245 was collected in civil actions.
Additionally, the Northern District of Texas worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $74,874 in criminal cases pursued jointly with these offices
Attorney General Loretta E. Lynch announced today that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
“I’m particularly pleased to see an increase in collections of more than $10 million over last year,” said U.S. Attorney Parker. “The message in these numbers should be clear. This office can be very patient and won’t just go away. We will continue to vigorously pursue all available enforcement remedies to recover assets for both victims of crime and the federal treasury for so long after sentencing or judgment as is necessary.”
Substantial collections in FY 2016 in the District included:
- More than $4 million in funds from multiple bank accounts, four luxury vehicles, artwork, a grand piano, wine collection, hundreds of pieces of high-end crystal, furs, handbags, jewelry, luggage, shoes, and watches returned to the Collin Street Bakery within 60 days of sentencing in the massive embezzlement, bank fraud, and conspiracy to commit money laundering case, U.S. v. Sandy and Kay Jenkins;
- $3.5 million from Preferred Imaging Centers, LLC in settlement of a False Claims Act qui tam case;
- $3.28 million settlement from the estate of Kenneth Rice in a False Claims Act health care fraud case;
- $1.8 million in restitution, plus a $100,00 fine, and several hundred thousands of dollars forfeited to the government that was paid in full at sentencing in the U.S. v. Robert Gross health care fraud;
- $1.1 million in forfeited assets restored to restitution in the U.S. v. Cyprian and Patricia Akamnonu health care fraud case;
- $762,150, more than half of the $1.3 million restitution owed to the U.S. Department of Housing and Urban Development (HUD), in the U.S. v. Lonnie Brantley and Steve Holmes housing fraud case;
- $500,000 paid in full at sentencing in the U.S. v. Daniel Bergin securities fraud case;
- $324,750 in restitution to the National Credit Union Association in the U.S. v. Theresa Portillo bank fraud case; and
- $276,400 in restitution paid in full to the Internal Revenue Service (IRS) in the U.S. v. Bettye Blount tax fraud case
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including HUD, the U.S. Department of Health and Human Services, the IRS, Small Business Administration, and U.S. Department of Education.
Additionally, the U.S. Attorney’s office in the Northern District of Texas, working with partner agencies and divisions, collected $10,695,313 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
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Norfolk Man Distributed Heroin Laced with FentanylRead the Press Release
NORFOLK, Va. – Lamar Sinclair, 33, of Norfolk, was sentenced today to 105 months in prison for conspiracy to distribute heroin.
Sinclair pleaded guilty on September 7. According to court documents, from 2012 to April 2016, Sinclair has conspired to distribute heroin in Norfolk and Virginia Beach with approximately eight other individuals. Sinclair’s heroin was laced with fentanyl which caused six of his heroin customers to overdose. In each case the police or emergency services were able to revive the victims of the overdoses. Sinclair was aware of the overdoses and bragged that his heroin was very potent because of the added fentanyl, and referred to his heroin as “The Missile.” Law enforcement conducted nine controlled purchases of heroin from Sinclair, with two of those purchases testing positive for fentanyl.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after sentencing by Chief U.S. District Judge Rebecca Beach Smith. Assistant U.S. Attorney Bill Muhr 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. 2:16-cr-114.
Nitro woman sentenced for failing to report to prisonRead the Press Release
CHARLESTON, W.Va. – A Nitro woman was sentenced today to eight months for failing to report to serve her prison sentence, announced United States Attorney Carol Casto. Kelli Engler, also known as Kelli Reed and Kelli Reed-Engler, 39, previously pleaded guilty to the federal crime.
Engler admitted that she was ordered by the United States District Court for the Southern District of West Virginia to serve 90 days of incarceration for a violation of her supervised release. Engler was ordered to report to prison by March 25, 2016, and was permitted by the Court to voluntarily self-report. She did not report to prison as required, and on June 28, 2016, law enforcement apprehended her in Tennessee.
Engler was on supervised release as part of her sentence for a 2011 federal conviction for access device fraud. The violations of her supervised release included not paying restitution and not reporting to the United States Probation Office as required.
The United States Marshals Service and the Rutherford County Sheriff’s Office in Tennessee conducted the apprehension and investigation. Assistant United States Attorney Erik S. Goes is in charge of the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
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New Orleans Man Sentenced for BP FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that GRAEGG L. HOLMES, age 43, of New Orleans, was sentenced yesterday after previously pleading guilty to committing wire fraud related to the 2010 British Petroleum Oil Spill.
U.S. District Court Judge Sarah S. Vance sentenced HOLMES to twelve months imprisonment to be followed by 3 years of supervised release, and $33,900 in restitution.
According to court records, at his guilty plea in August, 2016, HOLMES admitted that he filed a fraudulent application for relief relating to the April 20, 2010 explosion and fire, which occurred on the Deepwater Horizon, an oil rig in the Gulf of Mexico where BP had been drilling a well. In reality, HOLMES admitted that he worked at Abide Home Care from approximately 2001 through 2014. HOLMES used false documentation related to a non-existent catering business that he claimed lost money because of the Deepwater Horizon Disaster. On August 4, 2016, HOLMES was ordered detained pending trial by U.S. Magistrate Judge Janis van Meerveld after his arrest for home invasion in Orleans Parish.
This case was brought as part of this District’s partnership with the National Center for Disaster Fraud (NCDF), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected] or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant U. S. Attorneys Patrice Harris Sullivan and Hayden Brockett were in charge of the prosecution.
Nevada U.S. Attorney's Office Collects $26.8 Million for U.S. Taxpayers in 2016Read the Press Release
LAS VEGAS, Nev. – United States Attorney Daniel G. Bogden announced today that the U.S. Attorney’s Office for the District of Nevada collected approximately $26,800,380 in criminal, civil and asset forfeiture actions in Fiscal Year (FY) 2016. Of this amount, approximately $11,542,574 was collected in criminal actions, approximately $9,507,631 was collected in civil actions, and $5,750,175 was collected in asset forfeiture actions in FY 2016.
The District of Nevada also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $62,234 in cases pursued jointly with these offices.
“Our office is committed to enforcing the recovery of civil and criminal debts owed to the United States and to victims of federal crime. These collections are used to help crime victims and for a variety of law enforcement purposes,” said U.S. Attorney Bogden. “Our work has produced a significant return on investment. Our FY 2016 collections substantially exceeded the total appropriated budget for our office for the year. Since FY 2013, our office has collected a total of approximately $78.2 million in criminal, civil and asset forfeiture actions. I commend our attorneys and especially our staff in the Financial Litigation Unit and Asset Forfeiture Section for their remarkable work in recovering many, many millions in funds for the federal treasury and for victims of federal crime.”
Attorney General Loretta E. Lynch also announced today that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
Below is a summary of a case in which the U.S. Attorney’s Office for the District of Nevada collected a significant amount of money during FY 2016.
In June 2016, Renown Health, a non-profit corporation which operates Renown Regional Medical Center and Renown South Meadows Medical Center in Reno, paid $5.9 million to the Department of Justice to resolve civil allegations of health care fraud to the Medicare system. The civil lawsuit alleged that Renown submitted false claims to the Medicare program for inpatient hospital services from June 1, 2006, through June 30, 2014.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
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Monroeville Resident Who Operated Fradulent Tax Preparation Business Sentenced to Four YearsRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced today that Arthur Leyon Penn, 39, of Monroeville, Alabama, was sentenced today by Senior U.S. District Judge Callie V. S. Granade to 48 months of imprisonment for aggravated identity theft in connection with tax fraud. The judge ordered that Penn undergo supervised release upon completing his prison term, face credit restrictions, pay $841,617.05 in restitution, and pay a $200 mandatory special assessment.
Penn led The Penn Agency LLC, a company based in Monroeville, Alabama that provided insurance and fraudulent tax preparation services. He co-owned The Penn Agency with his wife, co-defendant Oleavia Mitchell Penn, who operated another fraudulent tax preparation business, Quick Tax, in Camden, Alabama.
In January 2016, Arthur Penn and five co-defendants were indicted by the Federal Grand Jury for the Southern District of Alabama. The indictment alleged that between 2011 and 2015, Penn orchestrated a fraudulent tax scheme and sought personal financial gain by defrauding the Treasury Department through the preparation and filing of fraudulent federal tax returns. The scheme’s overarching goal was to maximize fraudulent tax refunds. To this end, Arthur Penn used various methods such as listing false dependents on tax returns, unlawfully acquiring individuals’ social security numbers through payments and theft, creating fictitious household business incomes, and fraudulently inflating or decreasing a client’s income or deductions to maximize the Earned Income Tax Credit. These techniques were used at both The Penn Agency and Quick Tax, as Arthur and Oleavia Penn trained employees on how to best prepare fraudulent tax returns. He and his wife charged upfront fees from taxpayer clients for initial meetings. They also generated fees through the use of tax preparation software. The Penns arranged to directly receive federal tax refunds and placed sizeable portions of the refund checks into bank accounts under their control before remitting the balance to their clients. Arthur Penn would sometimes steal money from his tax clients by keeping an extra portion of fraudulent tax refunds that were supposed to go to his clients.
On August 22, 2016, Arthur Penn pled guilty to two counts of aggravated identity theft in connection with the unlawful use of individuals’ social security numbers and the preparation and submission of fraudulent tax returns. That same day, Oleavia Penn also pleaded guilty before Senior Judge Granade to committing aggravated identity theft.
Later in August 2016, Arthur Penn was indicted by the Federal Grand Jury for the Southern District of Alabama on two counts of tampering with a witness in his tax fraud case. On December 14, 2016, before being sentenced in his tax fraud case, Arthur Penn pleaded guilty before Senior Judge Granade to one count of witness tampering. As part of his plea, he admitted to attempting to bribe a former employee at The Penn Agency to prevent her from testifying against him at trial in his tax fraud case.
Arthur Penn’s sentencing date for the witness tampering violation is January 13, 2017. He faces up to twenty years imprisonment for the offense. Oleavia Penn’s sentencing date in the tax fraud case is March 15, 2017.
The tax fraud and witness tampering cases were investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the 35th Judicial Circuit Task Force in Monroeville, Alabama. The cases were prosecuted by Assistant United States Attorneys Sinan Kalayoglu and Greg Bordenkircher.
Monroe County Man Sentenced to 33 Months in Prison for Heroin TraffickingRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jabril Greggs, age 26, of Tobyhanna, Pennsylvania, was sentenced on December 12, 2016, by United States District Court Judge Malachy E. Mannion in Scranton, to serve 33 months in prison for distributing heroin.
According to United States Attorney Bruce D. Brandler, Greggs admitted to selling heroin during July 2014, and in April and May of 2015, in the Monroe County area. Greggs admitted to distributing between 80 and 100 grams of heroin, which is equivalent to between 3,000 and 4,000 retail bags of heroin. Greggs pleaded guilty in September 2016.
In rejecting the defendant’s request to be sentenced below the advisory guideline range, Judge Mannion noted the great harm that distributors of heroin were inflicting on our communities.
Judge Mannion also ordered Greggs to be placed on two years of supervised release following his prison sentence, and to pay a special assessment of $100.
Greggs was indicted by a federal grand jury in October 2014, as a result of an investigation by the Drug Enforcement Administration, the Pennsylvania State Police, and Pocono Mountain Regional Police. Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
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.
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Middle Tennessee Podiatrist Pleads Guilty to Health Care FraudRead the Press Release
Dr. Charlton Peter, 59, of Lewisburg, Tenn., pleaded guilty yesterday to two counts of health care fraud, announced David Rivera, United States Attorney for the Middle District of Tennessee.
In a plea hearing before U.S. District Judge Waverly D. Crenshaw, Jr., Peter, a podiatrist, admitted that he submitted claims to Medicare and Medicaid seeking reimbursement for procedures that were never performed. In particular, Peter admitted that he submitted false claims seeking reimbursement for performing nail avulsions, a procedure covered by Medicare, when he merely provided his patients with routine foot care, including clipping patients’ toenails, which is not covered by Medicare.
If convicted, Peter faces up to 10 years in prison and a $250,000 fine for each count of health care fraud. Peter will also be ordered to forfeit $122,691 representing the proceeds from his fraud. Peter will be sentenced by Judge Crenshaw on March 3, 2017and his sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
The case was investigated by the Department of Health and Human Services – Office of Inspector General, the Tennessee Bureau of Investigation Medicaid Fraud Unit. The United States is represented by Assistant U.S. Attorney Thomas J. Jaworski.
Mexican national living in Canton indicted on drug trafficking and immigration chargesRead the Press Release
A Mexican national living in Canton was indicted on cocaine trafficking and immigration charges, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio.
A federal grand jury returned a five-count indictment charging Rodolfo Trejo, aka Rudy, 38, with distribution of cocaine, possession with intent to distribute cocaine, and illegal re-entry following deportation.
Counts 1 through 3 of the indictment allege that Trejo distributed cocaine on or about August 17, September 7 and September 22, 2016.
Count 4 of the indictment alleges that Trejo possessed with the intent to distribute cocaine on or about December 1, 2016.
Count 5 of the indictment alleges that Trejo, a citizen of Mexico and an alien, who after previously having been removed and deported from the United States in 2013, to Mexico, was found illegally back in the United States.
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 Department of Homeland Security, Immigration and Customs Enforcement and the Canton Police Department. The matter is being prosecuted by Assistant United States Attorney Jason M. Katz.
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.
Mercer County Man Sentenced for Social Security Benefits FraudRead the Press Release
Erie, Pa. - A resident of Carlton, Pennsylvania, has been sentenced in federal court to 5 years probation, 6 months home detention and ordered to make restitution in the amount of $92,928.00 on his conviction of theft of government property and social security fraud, Acting United States Attorney Soo C. Song announced today.
Senior United States District Judge Gustave Diamond imposed the sentence on David James Dean, 40, of Carlton, Pennsylvania.
According to information presented to the court, from on or about August 9, 2006 to on or about May 18, 2015, Dean knowingly stole approximately $28,097 in Social Security Survivor’s Benefits payments which he knew he was not entitled. In addition, from on or about August 9, 2006 to on or about July 8, 2015, after applying to receive SSA Child’s Insurance Benefits on behalf of a minor child, Dean knowingly and willfully converted those benefits to his own use. By doing so, Dean received payments, valuing approximately $65,175, to which he knew he was not entitled.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
Acting United States Attorney Song commended the Social Security Administration, Office of Inspector General for the investigation leading to the successful prosecution of Dean.
McKees Rocks Man Sentenced for Fraud SchemeRead the Press Release
PITTSBURGH – An Allegheny County resident has been sentenced in federal court to imprisoned for a total term of one day, three years supervised release and restitution in the amount of $63,752.73 on his conviction of access device fraud, Acting United States Attorney Soo C. Song announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Joseph E. Placzek, 25 of McKees Rocks, PA.
According to the information presented to the court, Placzek opened credit cards in the name of another person at Capital One bank, which he used to purchase cruise vacations at Carnival Cruise, as well as merchandise at Amazon.com and Home Depot, among other retailers.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
The Western Pennsylvania Financial Crimes Task Force (WPFCTF), conducted the investigation that led to the successful prosecution of this defendant. The WPFCTF was established as a collaborative, multi-agency effort to effectively combat financial crimes, including identity fraud, in Western Pennsylvania. Partnering in this effort are the United States Attorney's Office for the Western District of Pennsylvania, the United States Secret Service, the United States Postal Inspection Service, the Department of Homeland Security, the Allegheny County District Attorney's Office, the Allegheny County Police Department, the City of Pittsburgh Bureau of Police and the Pennsylvania State Police.
Maryland Woman Sentenced to a Year in Prison for Embezzlement Scheme Against Her EmployerRead the Press Release
WASHINGTON – Stacey Walters, 38, a former accountant at Howard University, was sentenced today to a year and a day in prison for a scheme in which she embezzled over $105,000 from her employer, U.S. Attorney Channing D. Phillips announced.
Walters, of Indian Head, Md., pled guilty in September 2016, in the U.S. District Court for the District of Columbia, to a charge of wire fraud. She was sentenced by the Honorable James E. Boasberg. Upon completion of her prison term, she will be placed on three years of supervised release. She also was ordered to pay $57,586 in restitution.
According to the government’s evidence, Walters was hired at Howard University in July 2010. Her responsibilities included preparing financial reports and performing general accounting and budget functions. She was terminated from the job in October 2011.
From December 2010 through May of 2011, according to the government’s evidence, Walters submitted a total of 13 forms authorizing payment from her employer to various vendors. However, she fraudulently listed the banking information for her own account on one of the forms, causing $9,388 to be transferred to her own account. In addition, Walters listed banking information for another individual, Shantel Brown, on 12 other forms, causing $96,398 to be transferred to Brown’s account. At the direction of Walters, Brown transferred half of the funds she had fraudulently received from Howard University to Walters.
Brown, 34, of Waldorf, Md., pled guilty on Feb. 22, 2016 to one count of conspiracy to commit wire fraud and one count of wire fraud. She was sentenced on Nov. 1, 2016, also by Judge Boasberg, to a year and a day of incarceration, to be followed by three years of supervised release. She also was ordered to pay restitution in the amount of $128,072. In her guilty plea, Brown admitted taking part in the fraud against Howard University. She also admitted to carrying out a separate scheme from November 2011 through March 2013 in which she stole $79,874 from her employer, Defenders of Wildlife; Brown worked for the non-profit organization as a payroll/compliance specialist at the time.
In announcing the sentence, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department (MPD), as well as Criminal Investigator Stephen Cohen of the U.S. Attorney’s Office. He also expressed appreciation for the assistance provided by Assistant U.S. Attorney Thomas Swanton, Criminal Investigator Juan Juarez, and Paralegal Specialists Jessica Mundi, Christopher Toms, and Aisha Keys, all of the U.S. Attorney’s Office. Finally, he acknowledged the work of Assistant U.S. Attorney Teresa A. Howie, who prosecuted both cases.
Manhattan U.S. Attorney Announces Arrest of Defendant Charged with Participation in Massive Hacks into U.S. Financial InstitutionsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and David E. Beach, Special Agent in Charge of the U.S. Secret Service New York Field Office (“USSS”), announced that JOSHUA SAMUEL AARON, a/k/a “Mike Shields,” was arrested earlier today at John F. Kennedy International Airport. AARON, along with defendant Gery Shalon, a/k/a “Garri Shalelashvili,” a/k/a “Gabriel,” a/k/a “Gabi,” a/k/a “Phillipe Mousset,” a/k/a “Christopher Engeham,” is charged with crimes arising out of Shalon’s and AARON’s orchestration of massive computer hacking crimes against U.S. financial institutions, brokerage firms, and financial news publishers, including the largest theft of customer data from a U.S. financial institution in history. Shalon and AARON are charged with committing these crimes in furtherance of securities market manipulation schemes that Shalon and AARON perpetrated with defendant Ziv Orenstein, a/k/a “Aviv Stein,” a/k/a “John Avery.” AARON will be presented this afternoon in Manhattan federal court before U.S. Magistrate Judge James C. Francis IV. AARON is expected to appear before United States District Judge Laura Taylor Swain tomorrow at 10:30 a.m. The charges against AARON, Shalon, and Orenstein were made public on November 10, 2015. (To read the November 10, 2015, press release, click here.)
Manhattan U.S. Attorney Preet Bharara said: “Joshua Samuel Aaron allegedly worked to hack into the networks of dozens of American companies, ultimately leading to the largest theft of personal information from U.S. financial institutions ever. For pursuing what we have called ‘hacking as a business model,’ and thanks to the efforts of the FBI and the U.S. Secret Service, Aaron will now join his co-defendants to face justice in a Manhattan federal courtroom.”
FBI Assistant Director William F. Sweeney Jr. said: “Today, Josh Aaron was taken into the custody of the FBI to face charges filed against him more than a year and a half ago for his alleged role orchestrating a massive computer hack into U.S. financial institutions, brokerage firms, and financial news publishers and for his role in a multimillion-dollar stock manipulation scheme.”
U.S. Secret Service Special Agent in Charge David E. Beach said: “The arrest of this alleged transnational cybercriminal illustrates the dedication of the Secret Service and reach of the U.S. Government in the disruption and dismantling of global criminal networks. The precedent set by this successful United States deportation should serve as a warning to criminals that the Secret Service will relentlessly investigate, detect, and defend the Nation’s financial infrastructure both domestically and internationally.”
Shalon and Orenstein were arrested by Israeli authorities in July 2015, and were extradited from Israel in June 2016.
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AARON, 32, a U.S. citizen who had been residing in Moscow, Russia, is charged in a Superseding Indictment, S1 15 Cr. 333 (LTS), along with his co-defendants with the following offenses, which carry the maximum prison terms listed below. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Count
Defendants
Charge
Maximum Prison Term
One
SHALON and AARON
Conspiracy to commit computer hacking
5 years
Two
SHALON and AARON
Computer hacking
5 years
Three
SHALON and AARON
Computer hacking
5 years
Four
SHALON, AARON, and ORENSTEIN
Conspiracy to commit securities fraud
5 years
Five
SHALON, AARON, and ORENSTEIN
Conspiracy to commit wire fraud: Securities Market Manipulation Scheme
20 years
Six
SHALON, AARON, and ORENSTEIN
Securities fraud
20 years
Seven
SHALON, AARON, and ORENSTEIN
Eight
SHALON, AARON, and ORENSTEIN
Nine
SHALON, AARON, and ORENSTEIN
Ten
SHALON, AARON, and ORENSTEIN
Eleven
SHALON, AARON, and ORENSTEIN
Twelve
SHALON, AARON, and ORENSTEIN
Thirteen
SHALON, AARON, and ORENSTEIN
Wire fraud
20 years
Fourteen
SHALON, AARON, and ORENSTEIN
Conspiracy to commit identification document fraud
15 years
Fifteen
SHALON, AARON, and ORENSTEIN
Aggravated identity theft
Mandatory 2 years
Twenty-Two
SHALON, AARON, and ORENSTEIN
Conspiracy to commit money laundering: Securities Market Manipulation Scheme
20 years
Mr. Bharara praised the investigative work of the FBI and the United States Secret Service, and expressed his sincere gratitude to the Office of the State Attorney of the Israel Ministry of Justice’s Department of International Affairs and the Israel National Police, including its Cyber Unit - Lahav 433, for their support and assistance with the investigation. He also thanked the Securities and Exchange Commission, Immigration and Customs Enforcement - Homeland Security Investigations, the Financial Industry Regulatory Authority, the National Credit Union Administration, the Office of International Affairs of the U.S. Department of Justice, and the Financial Services Information Sharing and Analysis Center, which significantly aided the investigation by facilitating information-sharing among the victim institutions.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Eun Young Choi, Noah Solowiejczyk, and Sarah Lai are in charge of the prosecution. Assistant U.S. Attorney Daniel Tracer of the Office’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Man Who Distributed Drugs That Caused Overdose Death of Pregnant Woman in Fayette County Sentenced to Thirty YearsRead the Press Release
LEXINGTON, Ky. – A Lexington man, who pled guilty to distributing fentanyl which caused the overdose death of a pregnant Fayette County woman, has been sentenced to 30 years in federal prison.
On Tuesday, Senior U.S. District Judge Joseph Hood sentenced Fred Rebmann, 31, to 360 months’ imprisonment for distributing a controlled substance that resulted in death. Under federal law, Rebmann must serve at least 85 percent of his sentence.
Rebmann previously admitted that, in February of this year, he sold the pregnant woman a controlled substance that was believed to be heroin. Instead, however, the drug was fentanyl, an extremely powerful opioid that can be as much as 50 times more potent than heroin. She consumed the drugs and died.
Toxicology reports confirmed that she had five times the therapeutic dose of fentanyl in her system and no traces of heroin or other controlled substances. The report also concluded that, had it not been for the fentanyl, she would not have died.
“This case demonstrates why we use tough federal laws to prosecute drug dealers who sell poison that kills,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “For less than $100, the Defendant sold an obviously pregnant woman one of the deadliest drugs commonly available on our streets. The tragic result was all too predictable. Moreover, it is unacceptable, and we will use every prosecutorial tool available to us in order to protect our community from this predatory criminal conduct.”
U.S. Attorney Harvey, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration, and Mark Barnard, Chief of Police, Lexington Police Department, jointly announced the sentence.
The investigation was conducted by DEA and the Lexington Police Department. Assistant U.S. Attorney Todd Bradbury prosecuted this case on behalf of the federal government.
Kent man indicted for having shotgun after domestic violence convictionRead the Press Release
A Kent man convicted of domestic violence was charged with illegally having a firearm, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio.
A federal grand jury returned a one-count indictment charging Cecil J. Rotnem, 29, with possession of a firearm by a person convicted of misdemeanor domestic violence.
The indictment alleges Rotnem possessed a Mossberg, model 500A, 12 gauge shotgun on or about July 5, 2016 through July 11, 2016, despite having been previously convicted of a misdemeanor crime of domestic violence, in the Portage County Municipal Court, in 2009.
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 Jason M. Katz.
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.
Kalamazoo, Michigan, Man Convicted of Sex Trafficking and Interstate Transportation for ProstitutionRead the Press Release
David Q. Givhan, aka “Premier,” 34, of Kalamazoo, Michigan, was convicted late yesterday by a jury of one count of sex trafficking and three counts of interstate transportation for prostitution.
The verdict was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division; U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky; and Special Agent in Charge Amy S. Hess of the FBI’s Louisville Division.
According to evidence and testimony presented at trial, Givhan prostituted three women for his profit at various times between October 2014 and April 2015 and transported them from Michigan to Kentucky and other states for the purpose of prostitution. He used force, fraud and coercion to compel one of the women to prostitute for him between October 2014 and March 2015. He initially recruited the woman – a single mother of three – using false promises of steady income and a better life. However, once she began earning money, he kept it all. Givhan required her to earn $1,000 a day and beat other women who did not meet their quota in front of her. Givhan also required her to tattoo his alias, “Premier,” on her neck and threatened to hurt or kill her or her family if she refused to continue prostituting for him. When she objected to his demand that she perform particular acts for customers, he sexually assaulted her. At one point, the woman tried to leave Givhan, but he found her, placed her in a chokehold and told her it was time to return to work. On a trip to Florida, he compelled her to continue prostituting for his profit, even after she sought medical attention for severe pain and bleeding. Shortly thereafter, she managed to escape by enlisting the help of a hotel clerk and her mother.
“Sex trafficking offends the basic standards of human decency and dignity that form the bedrock of a civilized society,” said Principal Deputy Assistant Attorney General Gupta. “The Justice Department will continue to vigorously prosecute the unconscionable crime of sex trafficking and work to vindicate the rights of vulnerable victims.”
“Forcible sex trafficking is effectively a form of modern day slavery,” said U.S. Attorney Kuhn. “Victims, often vulnerable women, are terrorized by violence, threats and other coercion. This swift verdict should be a strong message that sex trafficking will not be tolerated by my Office and the Department of Justice.”
“Protecting the victims of human trafficking is one of the FBI's top priorities,” said Special Agent in Charge Hess. “We work closely with community leaders and our law enforcement partners to proactively target predators like the defendant who are involved in human trafficking. Our agents and task force officers are committed to addressing every such allegation we receive. We will continue to work tirelessly to protect and rescue the victims who are unable to defend themselves.”After deliberating for under five hours, the jury found the defendant guilty on all four counts. A fifth count was dismissed during trial. Sentencing is scheduled for March 14, 2017. The defendant faces a minimum sentence of 15 years in prison and a maximum sentence of life in prison.
The case was investigated by the FBI’s Louisville Division and Louisville Metro Police Department. The case is being prosecuted by Assistant U.S. Attorney Amanda E. Gregory of the Western District of Kentucky and Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Kalamazoo, Michigan, Man Convicted of Sex Trafficking and Interstate Transportation for ProstitutionRead the Press Release
Jury deliberated under five hours before finding David Givhan guilty of all charges
LOUISVILLE, Ky. – David Q. Givhan, aka “Premier,” 34, of Kalamazoo, Michigan, was convicted late yesterday by a jury of one count of sex trafficking and three counts of interstate transportation for prostitution.
The verdict was announced by U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky; Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division; and Special Agent in Charge Amy S. Hess of the FBI’s Louisville Division.
“Forcible sex trafficking is effectively a form of modern day slavery,” stated United States Attorney John Kuhn. “Victims, often vulnerable women, are terrorized by violence, threats and other coercion. This swift verdict should be a strong message that sex trafficking will not be tolerated by my Office and the Department of Justice.”
“Sex trafficking offends the basic standards of human decency and dignity that form the bedrock of a civilized society,” said Principal Deputy Assistant Attorney General Gupta. “The Justice Department will continue to vigorously prosecute the unconscionable crime of sex trafficking and work tirelessly to vindicate the rights of vulnerable victims.”
“Protecting the victims of human trafficking is one of the FBI's top priorities,” said Special Agent in Charge Amy S. Hess of the FBI’s Louisville Office. “We work closely with community leaders and our law enforcement partners to proactively target predators like the defendant who are involved in human trafficking. Our agents and task force officers are committed to addressing every such allegation we receive. We will continue to work tirelessly to protect and rescue the victims who are unable to defend themselves.”
According to evidence and testimony presented at trial, Givhan prostituted three women for his profit at various times between October 2014 and April 2015 and transported them from Michigan to Kentucky and other states for the purpose of prostitution. He used force, fraud and coercion to compel one of the women to prostitute for him between October 2014 and March 2015. He initially recruited the woman – a single mother of three – using false promises of steady income and a better life. However, once she began earning money, he kept it all. Givhan required her to earn $1,000 a day and beat other women in front of her. Givhan also required her to tattoo his alias, “Premier,” on her neck and threatened to hurt or kill her or her family if she refused to continue prostituting for him. When she objected to his demand that she perform particular acts for customers, he sexually assaulted her. At one point, the woman tried to leave Givhan, but he found her and brought her back. On a trip to Florida, he compelled her to continue prostituting for his profit, even after she sought medical attention for severe pain and bleeding. Shortly thereafter, she managed to escape by enlisting the help of a hotel clerk and her mother.
After deliberating for under five hours, the jury found the defendant guilty on all four counts. A fifth count was dismissed during trial. Givhan remains in federal custody awaiting formal sentencing before United States District Judge David J. Hale on date March 14, 2017 at 11a.m. in Louisville. The defendant faces a minimum sentence of 15 years in prison and a maximum sentence of life in prison.
The investigation was opened when Louisville Metro Police Department officers encountered a woman Givhan had transported from Michigan to Louisville, Kentucky, during a prostitution sting coinciding with the Kentucky Derby.
The case was investigated by the FBI’s Louisville Division and Louisville Metro Police Department. The case is being prosecuted by Assistant United States Attorney Amanda E. Gregory of the Western District of Kentucky and Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit.
KC Man Sentenced to 15 Years for Armed Bank RobberyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man who was tackled by a security guard while making his escape was sentenced in federal court today for armed bank robbery.
Sidney A. Williams, 63, of Kansas City, was sentenced by U.S. Chief District Judge Greg Kays to 15 years in federal prison without parole.
Williams, who pleaded guilty on July 6, 2016, admitted that he stole $5,493 at gunpoint from Bank Midwest, 7904 Ward Parkway, Kansas City, Mo., on Nov. 10, 2015.
According to court documents, Williams was wearing a black ski mask and black gloves when he entered the bank and ordered everyone in the lobby to the ground. Williams entered the security guard’s office, grabbed his shirt and forced him to the ground. Williams pointed a .38-caliber revolver at bank employees, including the security guard and the assistant branch manager. Two bank employees placed money into a blue canvas grocery bag that Williams was carrying.
When Williams ran out the door of the bank after the robbery, the security guard chased after him. The security guard tackled Williams across the street from the bank and a struggle ensued. Williams pointed the revolver at the security guard before he was able to disarm him. The security guard received assistance from a passerby in subduing Williams. Law enforcement officers recovered a blue canvas bag of cash, the handgun and a black ski mask from the area where Williams was taken into custody.
This case was prosecuted by Assistant U.S. Attorney Patrick C. Edwards. It was investigated by the FBI and the Kansas City, Mo., Police Department.
KC Man Sentenced for Armed Robbery ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for his role in a conspiracy to commit armed robbery.
Jamal L. Vassie, 27, of Kansas City, was sentenced by U.S. District Judge Stephen R. Bough to 11 years in federal prison without parole.
On Aug. 16, 2016, Vassie was convicted at trial of conspiracy to commit robbery, the armed robbery of Public Storage at 9820 Holmes, Kansas City, Mo., and possession of a firearm in furtherance of a crime of violence.
Vassie is the third defendant to be sentenced in this case. Randolph E. Wells, 31, of Kansas City, Mo., was sentenced on Sept. 18, 2015, to 10 years in federal prison without parole. Gary S. Dorch, 23, of Kansas City, Mo., was sentenced on July 22, 2015, to five years in federal prison without parole. Sergio A. Rascoe, 30, of Kansas City, Mo., pleaded guilty and awaits sentencing.
According to testimony during the trial, Vassie initially told his co-conspirators that he wanted to rob a bank. When Rascoe indicated he was uncomfortable robbing a bank with Dorch, whom he did not know, the decision was made to “audition” Dorch with a different robbery. Vassie and his co-conspirators drove to a car wash, where Rascoe pointed a firearm at a victim and demanded she turn over her car keys. Rascoe drove off in the victim’s vehicle, a Chrysler Sebring.
Rascoe and Dorch then used the stolen vehicle to commit the armed robbery at Public Storage. During the robbery, Dorch went into Public Storage and held the clerk at gunpoint while he demanded cash, the clerk’s wallet and the clerk’s cellphone.
Vassie and Wells were waiting a short distance away during the robbery, so that they could be available to pick up Rascoe and Dorch if they were involved in a pursuit with the police and had to abandon the stolen vehicle. Vassie and Wells were apprehended immediately after the robbery occurred, while Rascoe and Dorch led police officers on an extended chase through residential neighborhoods. Rascoe, who was driving the stolen vehicle, collided with a truck and they were both apprehended.
According to court documents, Vassie, Wells, and Rascoe participated in the robbery of five hotels, two storage facilities, a cellphone store, a bank, and three carjackings. Vassie had been on parole for four months at the time of this offense for a prior state conviction for the armed robbery of a Papa John’s Pizza.
This case is being prosecuted by Assistant U.S. Attorneys Patrick C. Edwards and Matthew A. Moeder. It was investigated by the FBI, the Kansas City, Mo., Police Department and the Independence, Mo., Police Department.
KC Man Pleads Guilty, Sentenced for Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man who photo-shopped images of child pornography to appear as if he was engaged in sexual activity with children pleaded guilty and was sentenced in federal court today.
Patrick O. Chapin, 68, of Kansas City, pleaded guilty before U.S. District Judge Roseann Ketchmark and was sentenced to six years and six months in federal prison without parole.
Chapin pleaded guilty today to receiving child pornography over the Internet. On March 17, 2014, Chapin took his desktop computer and a backup external hard drive to a computer repair shop to have work performed on the devices. He requested that the computer’s internal hard drive be replaced with a new one and that data from the external backup hard drive be transferred into the new internal hard drive. The technician working on Chapin’s computer discovered what appeared to be child pornography on the external hard drive and turned the computer and hard drive over to the Kansas City Police Department.
A police detective interviewed Chapin, who said he had been looking at child pornography for the past 14 years. A recurring theme in the images he possessed was the graphic depiction of the rape and sodomy of pubescent and prepubescent girls by adult men. Chapin admitted that his child pornography collection included images of bondage and bestiality.
Investigators found 2,131 photos and 101 videos of child pornography on Chapin’s devices. They also found several files created by Chapin using Photoshop Deluxe, an image-editing software. These files contained images of Chapin that were combined or layered with existing pornographic images of 13-to-14-year-old children downloaded from the Internet. Chapin thus created final images that appeared to depict himself engaged in illegal sexual activity with these child victims.
This case was prosecuted by Assistant U.S. Attorney David Luna. It was investigated by the FBI and the Kansas City, Mo., Police Department.
Project Safe Childhood
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."
Justice Department Recovers over $4.7 Billion from False Claims Act Cases in Fiscal Year 2016Read the Press Release
The Department of Justice obtained more than $4.7 billion in settlements and judgments from civil cases involving fraud and false claims against the government in fiscal year 2016 ending Sept. 30, Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, announced today. This is the third highest annual recovery in False Claims Act history, bringing the fiscal year average to nearly $4 billion since fiscal year 2009, and the total recovery during that period to $31.3 billion.
“Congress amended the False Claims Act 30 years ago to give the government a more effective tool against false and fraudulent claims against federal programs,” said Mizer. “An astonishing 60 percent of those recoveries were obtained in the last eight years. The beneficiaries of these efforts include veterans, the elderly, and low-income families who are insured by federal health care programs; families and students who are able to afford homes and go to college thanks to federally insured loans; and all of us who are protected by the government’s investment in national security and defense. In short, Americans across the country are healthier, enjoy a better quality of life, and are safer because of our continuing success in protecting taxpayer funds from misuse.”
Of the $4.7 billion recovered, $2.5 billion came from the health care industry, including drug companies, medical device companies, hospitals, nursing homes, laboratories, and physicians. The $2.5 billion recovered in fiscal year 2016 reflects only federal losses. In many of these cases, the Department was instrumental in recovering additional millions of dollars for state Medicaid programs. This is the seventh consecutive year the Department’s civil health care fraud recoveries have exceeded $2 billion.
The next largest recoveries came from the financial industry in the wake of the housing and mortgage fraud crisis. Settlements and judgments in cases alleging false claims in connection with federally insured residential mortgages totaled nearly $1.7 billion in fiscal year 2016 – the second highest annual recovery in this area.
The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government programs and contracts relating to such varied areas as health care, defense and national security, food safety and inspection, federally insured loans and mortgages, highway funds, small business contracts, agricultural subsidies, disaster assistance, and import tariffs. In 1986, Congress strengthened the Act by amending it to increase incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government.
Most false claims actions are filed under those whistleblower, or qui tam, provisions. If the government prevails in the action, the whistleblower, also known as the relator, receives up to 30 percent of the recovery. Whistleblowers filed 702 qui tam suits in fiscal year 2016, and the Department recovered $2.9 billion in these and earlier filed suits this past year. The government awarded the whistleblowers $519 million during the same period.
Health Care Fraud
The Department recovered $19.3 billion in health care fraud claims from January 2009 to the end of fiscal year 2016 – 57 percent of the health care fraud dollars recovered in the 30 years since the 1986 amendments to the False Claims Act. These recoveries restore valuable assets to federally funded programs such as Medicare, Medicaid, and TRICARE, the health care program for service members and their families. But just as important, the Department’s vigorous pursuit of health care fraud prevents billions more in losses by deterring others who might otherwise try to cheat the system for their own gain. The Department’s success is a direct result of the high priority the Obama Administration has placed on fighting health care fraud. In 2009, the Attorney General and the Secretary of the Department of Health and Human Services, the Department that administers Medicare and Medicaid, announced the creation of an interagency task force called the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement. Additional information on the government’s efforts in this area is available at StopMedicareFraud.gov, a webpage jointly established by the Departments of Justice and Health and Human Services.
The largest recoveries this past year – $1.2 billion – came from the drug and medical device industry. Drug manufacturers Wyeth and Pfizer Inc. paid $784.6 million to resolve federal and state claims that Wyeth knowingly reported false and fraudulent prices on two drugs used to treat acid reflux, Protonix Oral and Protonix IV. The government alleged that Wyeth (before it was acquired by Pfizer) failed to report deep discounts available to hospitals, as required by the government to ensure that the Medicaid program enjoyed the same pricing benefits available to the company’s commercial customers. Wyeth paid $413.2 million to the federal government and $371.4 million to state Medicaid programs.
In another settlement against a drug company, Novartis Pharmaceuticals Corp. paid $390 million based on claims that the company gave kickbacks to specialty pharmacies in return for recommending Exjade, an iron chelation drug, and Myfortic, an anti-rejection drug for kidney transplant recipients. The settlement includes $306.9 million for the federal government and $83.1 million for state Medicaid programs.
Hospitals and outpatient clinics accounted for $360 million in recoveries. Tenet Healthcare Corp., a major hospital chain in the United States, paid $244.2 million to resolve civil allegations that four of its hospitals engaged in a scheme to defraud the United States by paying kickbacks in return for patient referrals. Tenet paid an additional $123.7 million to state Medicaid programs, and two of its subsidiaries pleaded guilty to related charges and forfeited $145 million, bringing the total resolution to $513 million.
In the medical lab arena, Millennium Health (formerly Millennium Laboratories) paid $260 million to settle allegations that it billed Medicare, Medicaid, and other federal health care programs for excessive and unnecessary urine drug and genetic testing and also that it gave free items to induce physicians to refer expensive and profitable lab tests to Millennium, in violation of the Anti-Kickback Statute and Stark Law. The settlement included $214.8 million in alleged false claims against federal programs, $26 million in alleged false claims against state Medicaid programs, and $19.2 million in related administrative claims.
The nation’s largest contract therapy provider paid $125 million to resolve claims that it had induced skilled nursing homes to submit false claims to Medicare for rehabilitation services that were not reasonable, necessary, and skilled, or that weren’t provided at all. The settlement was with RehabCare Group Inc., RehabCare Group East Inc., and their parent, Kindred Healthcare Inc. Cases involving nursing homes and skilled nursing facilities accounted for more than $160 million in settlements and judgments this past fiscal year.
“These health care recoveries benefit vulnerable citizens in Medicare and Medicaid and the taxpayers who pay for those programs,” said Inspector General Daniel R. Levinson of the U.S. Department of Health and Human Services. “Beyond those significant settlements, though, my agency works to improve voluntary observance of federal laws through corporate integrity agreements addressing compliance weaknesses, and self-disclosures that encourage health care providers and other entities to voluntarily report suspected violations.”
Housing and Mortgage Fraud
The Department recovered more than $7 billion in housing and mortgage claims from January 2009 to the end of fiscal year 2016, including settlements and judgments totaling $1.6 billion this past fiscal year – the second highest annual recovery in the history of the federally insured mortgage program. Notable this year were settlements with Wells Fargo for $1.2 billion and Freedom Mortgage Corp. for $113 million.
Wells Fargo and Freedom Mortgage both admitted that they had originated and endorsed residential mortgages as eligible for federal insurance by the Federal Housing Administration (FHA) that did not meet requirements intended to reduce the risk of default. This put consumers at risk of losing their homes in foreclosure and increased the number of claims against the FHA when their loans went into default. The banks also admitted failing to report such deficiencies to the authorities as required under the program, despite internal reports exposing high rates of underwriting deficiencies that would have put the agency on notice so it could prevent continued program violations and mounting losses. By originating and endorsing ineligible loans for FHA insurance, the banks increased their mortgage profits at taxpayer expense while incurring little or no risk of their own.
As part of the Wells Fargo settlement, the bank’s vice president of Credit Risk – Quality Assurance, Kurt Lofrano, admitted that he annually certified Wells Fargo’s compliance with FHA’s Direct Endorsement Lender program and the bank’s continued qualification to remain in the program.
These recoveries are part of the broader enforcement efforts by President Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force in 2009, to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.stopfraud.gov.
Other Fraud Recoveries
Although health care and mortgage fraud dominated fiscal year 2016 recoveries, the Department has aggressively pursued fraud wherever it is found in federal programs and contracts. For example, the Department recovered $82.6 million in false claims from BP Exploration and Production Inc. (BP) arising from the April 2010 Deepwater Horizon/Macondo Well explosion and oil spill in the Gulf of Mexico. The government, through the Department of the Interior, leases portions of the Outer Continental Shelf to companies like BP that operate exploratory oil wells. In exchange for the lease, the operators pay royalties based on the volume of oil extracted from the wells. Program regulations applicable to exploration of the Outer Continental Shelf require well operators to maintain a “safe drilling margin” and to report plans to drill further into an open hole if the margin falls below legal limits. The government alleged that BP provided false reports about its “safe drilling margin” that concealed its improper drilling, which left the well in a fragile state and ultimately resulted in the blowout. The government’s civil fraud claims were part of a $20 billion consent decree reached with the United States and five Gulf states that also included damages and penalties under state and federal environmental laws, mandatory restoration of the area, and other relief.
The government also continued to pursue a variety of procurement fraud matters. For example, L-3 Communications EOTech Inc. and its parent company, L-3 Communications Corp., paid the United States $25.6 million for defective holographic weapon sites EOTech sold to the Department of Defense, Department of Homeland Security, and FBI. The defendants, including EOTech’s president, admitted knowing the sights failed to perform as represented in cold temperatures and humid environments, but delayed disclosing the defects to federal authorities for years. Besides compensating the government for critical funds lost through fraud, such settlements ensure that the vital terms of contracts supporting the nation’s defense and security agencies are enforced, and deter other contractors from acting fraudulently or recklessly to increase their profits in the future.
The Department had several settlements with for-profit schools that allegedly participated in illegal schemes to secure federal education funds. For example, the second largest for-profit education company in the country, Education Management Corp., paid the United States $52.6 million to resolve allegations that it unlawfully recruited students, engaged in deceptive and misleading recruiting practices, and falsely certified compliance with Title IV of the Higher Education Act and parallel state laws that prohibited such conduct, as part of a $95.5 million global federal-state settlement.
The Department also recovered $50 million in customs fraud. U.S. Customs and Border Protection collects duties on imports of foreign goods to protect U.S. manufacturers from unfair competition abroad by leveling the playing field for domestic products. Importers who seek an unfair advantage by knowingly evading or reducing their obligation to pay these duties are subject to damages and penalties under the False Claims Act. These recoveries both address lost duties and safeguard U.S. markets.
These suits and settlements illustrate the diversity of cases pursued by the Department and the Department’s quest to root out fraud and false claims against the government wherever it may be found.
Holding Individuals Accountable
On Sept. 9, 2015, the Department issued a memorandum on individual accountability for corporate wrongdoing. This memorandum reinforced the Department’s commitment to use the False Claims Act and other civil remedies to deter and redress fraud by individuals as well as corporations.
Cardiologist Dr. Asad Qamar and his practice, the Institute of Cardiovascular Excellence (ICE), paid $2 million this past fiscal year, and released claims to an additional $5.3 million in suspended Medicare funds, to settle allegations that he and his practice billed Medicare, Medicaid, and TRICARE for medically unnecessary procedures and paid kickbacks to patients by waiving Medicare copayments irrespective of financial hardship. Medicare copayments provide beneficiaries with an incentive to be smart health care consumers and avoid unnecessary procedures. The government alleged that by waiving the required copayments indiscriminately, Dr. Qamar and ICE induced patients to undergo unnecessary and invasive procedures. This conduct made Dr. Qamar the highest paid Medicare cardiologist in the United States in 2012 and 2013. Dr. Qamar also agreed to a three-year exclusion from participating in any federal health care program followed by a three-year integrity agreement with the Department of Health and Human Services Office of the Inspector General.
Additional examples of individuals held personally liable for alleged false claims include George Hepburn ($10.3 million), founder and president of Dynasplint Systems Inc.; Dr. Jonathan Oppenheimer ($9.35 million), former owner and chief executive officer of a Nashville drug testing laboratory; Gottfried and Mieke Kellermann ($8.5 million), founders of Pharmasan Labs Inc. and NeuroScience Inc.; Jacob (Jake) J. Kilgore ($4 million), former co-owner, vice president, and later president of Orbit Medical Inc.; Dr. David G. Bostwick ($3.75 million), founder and former owner and chief executive officer of Bostwick Laboratories Inc.; Mark T. Conklin ($1.75 million), former owner, operator, and sole shareholder of Recovery Home Care Inc. and Recovery Home Care Services Inc.; Dr. David Spellberg ($1.05 million) and Robert A. Scappa, D.O. ($250,000), urologists with 21st Century Oncology LLC; and Ralph J. Cox III ($1 million), former chief executive officer of Tuomey Healthcare System.
Recoveries in Whistleblower Suits
Of the $4.7 billion the government recovered in fiscal year 2016, $2.9 billion related to lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $519 million to the individuals who exposed fraud and false claims by filing a qui tam complaint.
The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 702 qui tam suits filed this past year – an average of 13.5 new cases every week. The growing number of qui tam lawsuits, particularly since 2009, has led to increased recoveries. From January 2009 to the end of fiscal year 2016, the government recovered nearly $24 billion in settlements and judgments related to qui tam suits and paid more than $4 billion in whistleblower awards during the same period.
“The qui tam provisions provide a valuable incentive to industry insiders who are uniquely positioned to expose fraud and false claims to come forward despite the risk to their careers,” said Principal Deputy Assistant Attorney General Mizer. “This takes courage, for which they are justly rewarded under the Act.”
In 1986, Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009, Senator Patrick J. Leahy, along with Senator Grassley and Representative Berman, championed the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and its whistleblower provisions. And in 2010, the passage of the Affordable Care Act provided additional inducements and protections for whistleblowers.
Mizer also expressed his deep appreciation for the many dedicated public servants who investigated and pursued these cases – the attorneys, investigators, auditors, and other agency personnel throughout the Department’s Civil Division and the U.S. Attorneys’ Offices, as well as the agency Offices of Inspector General, and the many federal and state agencies that contributed to the Department’s recoveries this past fiscal year.
“The Department’s lawyers and staff, together with our law enforcement partners in federal and state governments, work tirelessly and often overcome daunting challenges,” said Mizer. “Their efforts continue to pay for themselves many times over, providing substantial benefits to the taxpayers.”
The government’s claims in the matters described above are allegations only; except where indicated, there has been no determination of liability. The numbers contained in this press release may differ slightly from the original press releases due to accrued interest.
Justice Department Enters into Agreement to Reform the Family Court of St. Louis County, MissouriRead the Press Release
The Justice Department announced today that it has entered into a comprehensive agreement with the St. Louis County Family Court to resolve the department’s findings of serious and systemic violations of juvenile due process and equal protection rights.
The agreement aims to ensure that the family court protects the constitutional rights of children throughout their court proceedings and requires the family court to address racial disparities among youth in different stages of the juvenile justice process. This is the fourth agreement the department has entered into under the Violent Crime Control and Law Enforcement Act of 1994 to address constitutional violations within a juvenile justice system.
“The harms and inequities in our juvenile justice system threaten to limit the opportunities and derail the futures of America’s youth,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “We applaud the St. Louis County Family Court for taking these important steps to begin implementing critical reforms. We hope that juvenile courts around the country review this agreement and use it as a model to protect the constitutional rights of all children.”
The agreement provides for comprehensive reforms aimed at remedying the due process and equal protection violations the department found during its investigation, including:
- Court-Appointed Counsel: The agreement requires the court to double the juvenile defense counsel currently available to represent indigent youth and to ensure that defense counsel are timely appointed to all juveniles. The agreement also requires that the court appoint private attorneys in a uniform and transparent fashion and that all juvenile defenders practicing in the court receive training.
- Privilege Against Self-Incrimination: The agreement prohibits police interrogations at the juvenile detention center unless an attorney is present to represent the youth and requires the court to ensure that juveniles understand their rights before waiving them. The agreement prohibits deputy juvenile officers – the court staff responsible for virtually every aspect of family court operations – from discussing with the young person the substance of the allegations and/or using incriminating statements made by the youth in subsequent delinquency proceedings.
- Adversarial Probable Cause Hearings: The agreement requires that during detention hearings the court examine whether there is probable cause to believe that the youth has committed the alleged offense and permits the youth to challenge the evidence admitted to support probable cause.
- Standardized Plea Hearings: The court will adopt a standardized format for hearings to accept juveniles’ pleas to delinquency charges to ensure that pleas are knowing and voluntary.
- Deputy Juvenile Officer Training: Deputy juvenile officers must receive competency-based training that addresses the role and responsibilities of juvenile defense counsel in delinquency proceedings as well as the due process rights of youth. This includes the youth’s right to counsel, privilege against self-incrimination and the potential consequences (including collateral consequences) for a youth who is found to be delinquent.
- Collection, Analysis and Response to Court Data Regarding Disproportionate Minority Contact (DMC): The court must collect and analyze data about the gender, race, age and juvenile offense of youth in the system, create bi-annual reports and make changes based on what those reports reveal.
- Public Meetings: The agreement requires that the court advertise and hold public meetings to review and address the biannual DMC reports.
- Training: The agreement requires that court personnel who are directly involved in decision-making processes at the court or the juvenile office focused on juvenile delinquency participate in training addressing DMC.
The investigation, opened in November 2013, was conducted by the Civil Rights Division’s Special Litigation Section under provisions of the Violent Crime Control and Law Enforcement Act of 1994. In July 2015, the department issued a findings letter concluding that the St. Louis County Family Court violates the 14th Amendment of the Constitution by failing to ensure that juveniles facing delinquency charges receive adequate due process protections and failing to provide black youth in the juvenile justice system with equal protection under the law.
The department has opened four cases examining whether juvenile justice systems comply with children’s rights since 2009. In 2012, the department settled its first investigation of this kind, reaching an agreement with the Juvenile Court of Shelby County, Tennessee, that calls for comprehensive due process, equal protection and facility reforms. In June 2015, the department announced a partial settlement of its lawsuit alleging violations of children’s due process rights in Lauderdale County, Mississippi. In March 2015, the department announced its investigation of due process and disability discrimination issues in the Dallas County, Texas, Truancy Court and Juvenile District Courts.
St. Louis Family Court Agreement Juvenile Justice Fact SheetJustice Department Collects More Than $15.3 Billion in Civil and Criminal Cases in Fiscal Year 2016Read the Press Release
Attorney General Loretta E. Lynch announced today that the Justice Department collected more than $15.3 billion in civil and criminal actions in fiscal year (FY) 2016 ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the approximately $3 billion appropriated budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year’s collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
Civil collections account for more than $12 billion of the total collected and were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, mortgage, financial, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development (HUD), Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Among the largest settlements: the $2.96 billion settlement with Goldman Sachs Group (Goldman Sachs), the $2.6 billion settlement with Morgan Stanley & Company (Morgan Stanley), and the $1.2 billion settlement with Wells Fargo Bank, N.A. (Wells Fargo), all of which related to practices arising from residential mortgage lending activities. In April 2016, the Justice Department announced the settlement with Goldman Sachs related to its conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage backed securities (RMBS) between 2005 and 2007.
In February 2016, the Justice Department announced the settlement with Morgan Stanley to resolve claims related to marketing, sale and issuance of RMBS. As part of the agreement, Morgan Stanley acknowledged in writing that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its RMBS, and about its due diligence practices.
In April 2016, the Justice Department announced a settlement of civil mortgage fraud claims against Wells Fargo and Wells Fargo executive Kurt Lofrano, stemming from Wells Fargo’s participation in the Federal Housing Administration (FHA) Direct Endorsement Lender Program. In the settlement, Wells Fargo acknowledged and accepted responsibility for, among other things, certifying to HUD, during the period from May 2001 through December 2008, that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the government having to pay FHA insurance claims when some of those loans defaulted.
The department also continued to collect monies that will go for penalties and natural resource restoration efforts for the largest environmental case in history, including the landmark $20.8 billion settlement with BP approved by the court earlier this year. The department collected nearly $378 million in FY 2016 scheduled payments to resolve these and other civil claims from the 2010 Macondo well blowout and the massive Deepwater Horizon oil spill that followed in the Gulf of Mexico.
More than $3 billion of the total was collected in FY 2016 from criminal cases, including the more than $772 million criminal penalty assessed against Alstom S.A., a French power and transportation company charged by the District of Connecticut in a foreign bribery scheme. The fine was the largest, ever, to resolve a foreign bribery case.
The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $12 billion in payments made directly to the Justice Department, and more than $3.3 billion in indirect payments made to other federal agencies, states and other designated recipients.
In measuring collections recovered in FY 2016, this figure necessarily includes some cases that were resolved in previous years but the proceeds of which were collected in FY 2016.
Isleta Pueblo Man Sentenced to 20 Years for Federal Child Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Patrick Carpio, 70, a member and resident of Isleta Pueblo, N.M., was sentenced today in federal court in Albuquerque, N.M., to 20 years in prison followed by a lifetime of supervised release for his conviction on child sexual abuse and sexual contact charges. Carpio will be required to register as a sex offender after he completes his prison sentence.
Carpio was arrested on May 1, 2015, on a four-count indictment charging him with three counts of abusive sexual contact and one count of aggravated sexual abuse. The indictment charged Carpio with sexually abusing an Indian child who had not reached the age of 12 years on three occasions between Jan. 1999 and Nov. 2002. It also charged Carpio with sexually abusing a second Indian child who was between the age of 12 and 16 years in March 2013. According to the indictment, Carpio committed the crimes in Indian Country in Bernalillo County, N.M. A superseding indictment was filed on Feb. 24, 2016, charging Carpio with the same offenses.
On April 28, 2016, Carpio pled guilty to Counts 3 and 4 of the superseding indictment charging him with aggravated sexual abuse and abusive sexual contact. In his plea agreement, Carpio admitted engaging in a sexual act with a ten-year-old Indian child in 2002. He also admitted having sexual contact with a 12-year-old Indian child in March 2013. Carpio admitted committing the crimes in the Pueblo of Isleta.
This case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services. The case was prosecuted by Assistant U.S. Attorney Sarah Mease as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Iranian National Sentenced to Prison for Conspiring to Illegally Export Products from the U.S. to IranRead the Press Release
Mansour Moghtaderi Zadeh, 56, an Iranian national, was sentenced today to 18 months in prison and one year of supervised release for taking part in a conspiracy involving the purchase and shipment of various products, including aviation parts and aviation supplies, from the U.S. to Iran without a license. Zadeh was also ordered to pay a forfeiture money judgment in the amount of $69,159.00.
The announcement was made by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Channing D. Phillips for the District of Columbia, Special Agent in Charge Matthew J. Etre of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston and Special Agent in Charge Michael Imbrogna of the Bureau of Industry and Security at the U.S. Department of Commerce in Boston. The sentence was ordered by Senior Judge Paul L. Friedman in the U.S. District Court for the District of Columbia.
Zadeh, who had been living in Iran, pled guilty on October 27, to one count of conspiracy to unlawfully export goods, technology and services to Iran without the required license, and to defraud the U.S. In court documents filed at the time of the plea, Zadeh acknowledged that beginning in October 2005, Iranian companies requested that Zadeh through his company, Barsan, procure products including a fiber optic video transmitter and receiver, and aviation course indicators that would otherwise require a license from the Office of Foreign Assets Control (OFAC) to be exported to Iran. Members of the conspiracy arranged for the items to be sent from the U.S. to Iran, for which Zadeh received a commission.
In March 2007, Zadeh and co-conspirators attempted to export metal sheets and rods that are used in the aviation manufacturing industry from the U.S. to Iran without the required license from OFAC. Zadeh had arranged for his new corporation, Lavantia, to purchase the items. Zadeh also used an alias in his communications.
In September 2007, the shipment was detained by the U.S. Department of Commerce pending certification of the end user. In October 2007, the Department of Commerce issued a Temporary Denial Order (TDO) against Lavantia and Zadeh, under his alias. The TDO prohibited Lavantia and Zadeh from participating in any way in exporting commodities from the U.S. Notwithstanding the TDO, Zadeh and other conspirators exported and attempted to export numerous materials from the U.S., including resin, sealant, paint, pneumatic grease, film adhesive and polyurethane coating and thinner. The post-TDO conduct included more than $69,000 of exported goods.
In announcing the sentence, Acting Assistant Attorney General McCord, U.S. Attorney Phillips, Special Agent in Charge Etre and Special Agent in Charge Imbrogna commended the work of the Special Agents who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Assistant U.S. Attorney George Varghese, now with the U.S. Attorney’s Office for the District of Massachusetts, and Paralegal Specialist Jorge Casillas. Finally, they expressed appreciation for the work of Assistant U.S. Attorneys Frederick W. Yette and Jeffrey Pearlman, who prosecuted the case, as well as Trial Attorney Thea Kendler, of the National Security Division’s Counterintelligence and Export Control Section.
Iranian National Sentenced to Prison for Conspiring to Illegally Export Products from the United States to IranRead the Press Release
WASHINGTON—Mansour Moghtaderi Zadeh, 56, an Iranian national, was sentenced today to 18 months in prison for taking part in a conspiracy involving the purchase and shipment of various products, including aviation parts and aviation supplies, from the United States to Iran without a license.
The sentencing, which took place in the U.S. District Court for the District of Columbia, was announced by Mary B. McCord, Acting Assistant Attorney General for National Security, Channing D. Phillips, U.S. Attorney for the District of Columbia, Special Agent in Charge Matthew J. Etre, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Boston, and Special Agent in Charge Michael Imbrogna, Bureau of Industry and Security, U.S. Department of Commerce, Boston.
Zadeh, who had been living in Iran, pled guilty on Oct. 27, 2016, to one count of conspiracy to unlawfully export goods, technology, and services to Iran without the required license, and to defraud the United States. He was sentenced by Senior Judge Paul L. Friedman. Following completion of his prison term, Zadeh will be placed on a year of supervised release. He also was ordered to pay a forfeiture money judgment in the amount of $69,159.
In court documents filed at the time of the plea, Zadeh acknowledged that beginning in October 2005, Iranian companies requested that Zadeh, through his company, Barsan, procure products, including a fiber optic video transmitter and receiver and aviation course indicators that would otherwise require a license from the Office of Foreign Assets Control (OFAC) to be exported to Iran. Members of the conspiracy arranged for the items to be sent from the United States to Iran, for which Zadeh received a commission.
In March 2007, Zadeh and co-conspirators attempted to export metal sheets and rods that are used in the aviation manufacturing industry from the United States to Iran, without the required license from OFAC. Zadeh had arranged for his new corporation, Lavantia, to purchase the items, and used an alias in his communications. In September 2007, the shipment was detained by the United States Department of Commerce pending certification of the end user. In October 2007, the Department of Commerce issued a Temporary Denial Order (TDO) against Lavantia and Zadeh (under his alias). The TDO prohibited Lavantia and Zadeh from participating in any way in exporting commodities from the United States. Notwithstanding the TDO, Zadeh and other conspirators exported and attempted to export numerous materials from the United States, including resin, sealant, paint, pneumatic grease, film adhesive, and polyurethane coating and thinner. The post-TDO conduct included more than $69,000 of exported goods.
In announcing the sentence, Acting Assistant Attorney General McCord, U.S. Attorney Phillips, Special Agent in Charge Etre, and Special Agent in Charge Imbrogna commended the work of the Special Agents who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney George Varghese, now with the U.S. Attorney’s Office for the District of Massachusetts, and Paralegal Specialist Jorge Casillas. Finally, they expressed appreciation for the work of Assistant U.S. Attorneys Frederick W. Yette and Jeffrey Pearlman, who prosecuted the case, as well as Trial Attorney Thea Kendler, of the National Security Division’s Counterintelligence and Export Control Section.
Indictment: Topeka Man Had a Hand in Two Armed RobberiesRead the Press Release
TOPEKA, KAN. – A grand jury Wednesday returned federal charges against a Topeka man in two armed robberies, one of which ended in a police officer being shot, U.S. Tom Beall said.
Jermaine Tyrell Patton, 28, Topeka, Kan., is charged with two counts of aiding and abetting commercial robbery and two counts of aiding and abetting the brandishing of a firearm during a robbery
The indictment alleges Patton took part in an Oct. 31, 2016, robbery at Goose Express, 2901 S.E. Freemont, and a Nov. 5, 2016, robbery at Oakmart Convenience Store, 2518 N.E. Seward.
Patton and another man, Christopher Curtis Harris, 29, Topeka, were arrested following the Nov. 5 robbery. Harris was charged in Shawnee County District Court with shooting Topeka Police Detective Brian Hill when Hill tried to arrest him.
If convicted, Patton faces a penalty of not less than seven years in federal prison on each of the firearm counts and up to 20 years on each of the robbery counts. The Topeka Police Department and the FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
OTHER GRAND JURY INDICTMENTS
Michael J. Skladzien, 53, owner of S&S Floor Maintenance in Wichita, Kan., is charged with failing to pay more than $250,000 in taxes he withheld from employees’ wages. The crime is alleged to have occurred from 2010 to 2013 in Sedgwick County, Kan.
If convicted, he faces up to five years in federal prison and a fine up to $250,000 on each of 11 counts. The Internal Revenue Service investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
Patrick A. Scott, 32, Topeka, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction and one count of unlawful possession of a sawed off shotgun. The crimes are alleged to have occurred Nov. 17, 2016, in Topeka, Kan.
If convicted, he faces up to 10 years in federal prison on each count. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Dustin Slinkard is prosecuting.
Quaton A. Grover, 38, Topeka, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Oc. 28, 2016, in Topeka.
If convicted, he faces up to 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Dustin Slinkard is prosecuting.
Alvin Acevedo, 27, and Yesena Collazo, 31, are charged with one count of possession with intent to distribute heroin. The crime is alleged to have occurred Nov. 14, 206 in Geary County, Kan.
If convicted, they face a penalty of not less than 10 years in federal prison and a fine up to $10 million. The Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Skipper Jacobs is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
INTERPOL Washington Internship Program Featured on Federal News RadioRead the Press Release
On Friday, December 9th, Federal News Radio aired a segment featuring the internship program of INTERPOL Washington, formally known as the U.S. National Central Bureau (USNCB). In a pre-recorded interview, Acting Director Wayne Salzgaber spoke with Tom Temin, host of the morning Federal Drive show, about the unique experiences and opportunities afforded to the bureau’s interns. To listen to the entire interview, click here: http://federalnewsradio.com/federal-drive/2016/12/wayne-salzgaber-interpol-interns-get-first-hand-experience/.
The INTERPOL Washington internship program gives college age students and recent graduates direct experience working in the law enforcement environment. An internship with INTERPOL Washington offers insight into the growing nexus of transnational crime as well as law enforcement in the United States and around the world. Interns may receive the following opportunities:
- Exposure to a wide variety of law enforcement partners, including law enforcement detailees onsite from agencies including the Federal Bureau of Investigation (FBI), Immigration and Customs Enforcement (ICE), U.S. Marshals Service (USMS), and other federal, state and local law enforcement agencies
- Knowledge of the criminal justice system and both its domestic and international scope, impact, and mechanisms
- Awareness of issues affecting international criminal investigations
- Ability to analyze and summarize complex criminal activities
- Expansion of network for future job opportunities, including mentorship from active law enforcement officers and INTERPOL Washington personnel
- Field trips to nearby law enforcement headquarters and training sites
- At this time, INTERPOL Washington offers full-time, nonpaid internships for six-month cycles (January-June; July-December). Submission deadlines are:
- For the July 11, 2017 – December 8, 2017 Term: Application is due February 15, 2017
- For the January 9, 2018 – June 29, 2018 Term: Application is due September 15, 2017
Complete requirements and application procedures can be found at: https://www.justice.gov/interpol-washington/internships
Human Trafficking Institute’s 2016 Training Held TodayRead the Press Release
DALLAS – The North Texas Anti-Trafficking Team (NTATT), led by the U.S. Attorney’s Office for the Northern District of Texas, sponsored a day-long training session today, “Investigating Beneath the Surface,” which was held at the Mac Bernd Professional Development Center in Arlington, Texas, announced U.S. Attorney John Parker of the Northern District of Texas, who provided opening remarks at the event.
Nearly 220 attendees from law enforcement and non-government agencies who provide victim services attended the training.
Highlights of the training included presentations by experts on these topics: 1) Pimping: The New Game in Town; 2) Little Girls Lost: Trial of a “John”; 3) State and Federal Trafficking Laws; 4) A panel on Services to Trafficked Persons; 5) Tools and Tactics for Labor Trafficking Investigations; 6) A Case Study on H2A Agricultural Visas and Labor Trafficking; and 7) Understanding and Treating Trauma Bonds in Victims of Human Sex Trafficking.
The U.S. Attorney’s Office for the Northern District of Texas launched the NTATT in 2006 to combat human trafficking in the Dallas/Fort Worth metroplex and surrounding counties. The NTATT is comprised of federal, state, and local law enforcement agencies. The NTATT has also partnered with non-government agencies to provide necessary services for victims of human trafficking.
The goal of the NTATT is to work with law enforcement and private agencies to discover and rescue victims of human trafficking while identifying and prosecuting offenders. This goal is achieved through heightened law enforcement and victim service presence in the community, operations to identify victims and traffickers, providing training for law enforcement officers, and outreach awareness campaigns in the community.
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Guatelmalan National Indicted for Assaulting a Border Patrol Agent Near Uvalde, TexasRead the Press Release
In Del Rio today, a federal grand jury indicted a 20-year-old Guatemalan national for assaulting a U.S. Border Patrol agent last month announced United States Attorney Richard L. Durbin, Jr. and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
The indictment charges Elias de Jesus Gregorio de Paz with one count of assault on a federal officer.
The indictment alleges, on November 19, 2016, Gregorio de Paz intentionally assaulted a U.S. Border Patrol agent while the agent was engaged in the performance of his duties. According to court records, U.S. Border Patrol agents working in the Uvalde, TX, area encountered a two undocumented aliens on or around a stopped train. One undocumented alien absconded. The other, Gregorio de Paz, engaged in an altercation with the agent causing him to suffer a concussion. Gregorio de Paz fled the scene, but was captured three days later by U.S. Border Patrol agents in the Del Rio area.
Gregorio de Paz remains in federal custody. No court dates have been scheduled. Upon conviction, Gregorio de Paz faces up to 20 years in federal prison for the assault charge.
“Assaults on our agents will not be tolerated,” said Del Rio Sector Acting Chief Patrol Agent Matthew Hudak. “These types of incidents are a staunch reminder of the dangerous work Border Patrol Agents do.”
This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Paul Harle.
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Grape Street Crips Gang Member, Two Others Indicted for Alleged Murder During Home-Invasion RobberyRead the Press Release
NEWARK, N.J. – Three Newark men were indicted by a federal grand jury today for their alleged roles in an August 2015 home invasion that left one person dead, U.S. Attorney Paul J. Fishman announced.
Aaron Terrell, a/k/a “Push,” 26, Jahad Lemons, a/k/a “JBird,” 26, and Papayaw Mack, a/k/a “GY,” 25, were each charged by indictment with one count of murder during a crime of violence, one count of Hobbs Act robbery conspiracy, one count of Hobbs Act robbery, and one count of using a firearm during a crime of violence.
According to the indictment:
On Aug. 18, 2015, Terrell, Lemons, Mack, and two other individuals – referred to in the indictment as “CC-1” and “CC-2” – allegedly used firearms to rob the apartment of an individual referred to in the indictment as “Victim-1” at a residential building in Newark. They targeted Victim-1 because they believed Victim-1was a heroin trafficker whose residence contained narcotics and related proceeds.
At the residential building, Terrell, Lemons, Mack, CC-1, and CC-2 allegedly surrounded Victim-1, forced him into his apartment, and then proceeded to rob at gunpoint Victim-1 – as well as Victim-2 and Victim-3 who were already inside the apartment – of cash and personal affects. During the course of the robbery, Terrell and CC-2 allegedly discharged their firearms, which killed Victim-1 and seriously wounded Victim-2.
All three men were originally charged by the Essex County Prosecutor’s Office with murder and robbery. On Aug. 26, 2015, Terrell was arrested by the Newark Police Department, while Lemons was arrested in Georgia on October 26, 2015. Mack remains at large. Terrell is also facing separate federal charges in a sixth superseding indictment for his participation in a racketeering conspiracy related to the New Jersey set of the Grape Street Crips, a violent street gang operating in and around Newark.
Each defendant faces a potential sentence of life in prison for the count of murder during a crime of violence. The count of using a firearm during a crime of violence carries a mandatory minimum sentence of 10 years in prison and a potential sentence of life, and that sentence must be consecutive to any other sentence imposed. The Hobbs Act robbery and conspiracy to commit Hobbs Act robbery counts each carry a potential sentence of 20 years in prison. All four counts carry a potential fine of $250,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to the charges. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, and police officers and detectives of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, for their assistance.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Barry A. Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Defense counsel:
Terrell: Michael N. Pedicini Esq.
Lemons: Kathleen M. Theurer Esq.
Geneva man faces child pornography chargesRead the Press Release
A Geneva man was indicted on child pornography charges, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio.
Christopher W. Smith, 27, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct.
The indictment charges that Smith knowingly received and distributed numerous computer files which containted visual depictions of real minors engaged in sexually explicit conduct. This took place from June 17 through November 15, 2016. The indictment also charges that on or about November 15, 2016, Smith possessed an HTC cellphone and an RCA Tablet, each of which contained child pornography.
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 violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan following an investigation the Cleveland and London offices of the Department of Homeland Security, Homeland Security Investigations.
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.
Founder of Heroes Academy Pleads Guilty to $1.9 Million FraudRead the Press Release
RICHMOND, Va. – Larry Jay Horsey, 41, of Chesterfield, pleaded guilty today to charges related to his role in an investment fraud scheme that caused a loss of $1.9 million to nine investors.
According to the statement of facts filed with the plea agreement, Horsey, a licensed insurance agent, was the founder and operator of “Heroes Academy,” a business that marketed itself as both a non-profit financial education school and a financial management company. Horsey represented himself to the public as a financial advisor, conducting financial planning seminars in Virginia and North Carolina. Between October 2012 and May 2016, Horsey targeted nine separate individuals, convincing those individuals to open what they believed would be investment or savings vehicles, such as an annuity or a Roth IRA, through Horsey’s Heroes Academy business. Instead of using those individuals’ savings as promised, however, Horsey instead spent the funds on various personal or business expenses. In total, Horsey defrauded those nine investors of a combined $1.9 million, and today pleaded guilty to charges of mail fraud and engaging in monetary transactions derived from specified unlawful activities.
Horsey faces a maximum penalty of 20 years in prison when sentenced on March 17, 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; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); and Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service (USPIS), made the announcement after the plea was accepted by U.S. District Judge Henry E. Hudson. Assistant U.S. Attorney Thomas A. Garnett is prosecuting the case.
The case was investigated by the Fraud Task Force, including the FBI’s Richmond Field Office, IRS-CI, and USPIS, with assistance from the Virginia State Corporation Commission.
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. 3:16cr153.