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Tuesday 25 October 2016
Northern District of Mississippi 2016 Election InformationRead the Press Release
United States Attorney Felicia C. Adams announced today that Assistant United States Attorney (AUSA) Robert W. Coleman II, will lead the efforts of her Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Coleman has been appointed to serve as the District Election Officer (DEO) for the Northern District of Mississippi, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
United States Attorney Adams said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Adams stated that AUSA/DEO Coleman will be on duty in this District while the polls are open. He can be reached by the public at the following telephone number: (662) 234-3351.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at (662) 234-3323.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
United States Attorney Adams said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”
Northeast Iowa Man Pleads Guilty to Possessing BombsRead the Press Release
A man who unlawfully possessed three pipe bombs and a pressure cooker bomb pled guilty on October 24, 2016, in federal court in Cedar Rapids.
Trevor Satrom, age 34, from Oran, Iowa, was convicted of one count of possessing unregistered explosive bombs.
In a plea agreement, Satrom admitted that on February 10, 2016, law enforcement searched his residence in Oran, Iowa. During the search, police seized assorted length metal pipes, metal end caps sized for the pipes, three metal end caps with holes made in the end, a pressure cooker with a hole made on the top, hobby fuse of various lengths, various types of propellant powder, and packages of BBs. Satrom further admitted that, together, these items could readily have constituted three fully operational pipe bombs and one fully operational pressure cooker bomb.
Sentencing before United States District Court Judge Leonard T. Strand will be set after a presentence report is prepared. Satrom remains in custody of the United States Marshal pending sentencing. He faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, a $100 special assessment, and 3 years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Tony Morfitt and was investigated by the Fayette County Sheriff’s Office, the Iowa Division of Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-2016.
Follow us on Twitter @USAO_NDIA.
Nevada Business Owner and Bookkeeper Sentenced for Employment Tax CrimesRead the Press Release
An owner of several Reno, Nevada landscaping and rock hauling businesses was sentenced yesterday to 10 months in prison for failure to pay over employment taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Daniel G. Bogden of the District of Nevada. The bookkeeper for the business was sentenced to five years’ probation with three months home confinement for willful failure to file an employment tax return.
“The willful failure to comply with employment tax obligations is a crime – plain and simple,” said Principal Deputy Assistant Attorney General Ciraolo. “Stealing employee withholdings and failing to pay them over to the U.S. Treasury, gives dishonest employers an unfair advantage over their law-abiding competitors. The department will continue to work with the Internal Revenue Service (IRS) to prosecute these offenders and level the playing field.”
"Defendants’ illegal conduct injured not only the United States, but their former employees,” said U.S. Attorney Bogden. “While the United States of America will foot the bill for the employment and social security taxes that were withheld from the employees’ paychecks, the employees themselves will have any retirement diminished due to the non-reporting of cash wages.”
“Employers have a responsibility to their employees to withhold the proper amount of taxes and pay those taxes over to the IRS,” said Special Agent in Charge Tara Sullivan of IRS Criminal Investigation, Las Vegas Field Office. “When employers fail to do so, it affects revenue to the U.S. government, but more importantly, it affects their employees Medicare and social security benefits.”
According to documents filed with the court, Kyle Archie of Reno, was the part owner of Reno Rock Inc., GKPA Inc. and D Rockeries Inc. Kyle Archie admitted that he was responsible for the day-to-day operations of the businesses and that from 2003 through 2009; he had a legal duty to collect, truthfully account for, and pay over employment taxes to the IRS. He further admitted that although he collected these taxes from his employees’ wages and held them in trust, he failed to pay them over to the IRS for the third quarter of 2008.
Linda Archie of Reno, who is Kyle Archie’s mother, worked as the bookkeeper for Reno Rock Inc., GKPA Inc. and D. Rockeries Inc. and was responsible for maintaining the books and records of the companies and filing documents with various government agencies. She admitted that between 2003 and 2009, she failed to file employment tax returns on behalf of these businesses to account for the taxes that were withheld from the employees’ wages.
In addition to the prison term imposed, Kyle Archie was also ordered to serve ¬three years of supervised release, and both Kyle and Linda Archie were ordered to pay restitution to the IRS in the amount of $1,235,528.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Bogden commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Carla B. Higginbotham of the District of Nevada and Trial Attorney Kathleen M. Barry of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Nevada Business Owner and Bookkeeper Sentenced for Employment Tax CrimesRead the Press Release
RENO, Nev.– An owner of several Reno, Nevada landscaping and rock hauling businesses was sentenced yesterday to 10 months in prison for failure to pay over employment taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Daniel G. Bogden of the District of Nevada. The bookkeeper for the business was sentenced to five years’ probation with three months home confinement for willful failure to file an employment tax return.
"The willful failure to comply with employment tax obligations is a crime – plain and simple,” said Principal Deputy Assistant Attorney General Ciraolo. “Stealing employee withholdings and failing to pay them over to the U.S. Treasury, gives dishonest employers an unfair advantage over their law-abiding competitors. The department will continue to work with the Internal Revenue Service (IRS) to prosecute these offenders and level the playing field.”
“Defendants’ illegal conduct injured not only the United States, but their former employees,” said U.S. Attorney Bogden. “While the United States of America will foot the bill for the employment and social security taxes that were withheld from the employees’ paychecks, the employees themselves will have any retirement diminished due to the non-reporting of cash wages.”
“Employers have a responsibility to their employees to withhold the proper amount of taxes and pay those taxes over to the IRS,” said Special Agent in Charge Tara Sullivan of IRS Criminal Investigation, Las Vegas Field Office. “When employers fail to do so, it affects revenue to the U.S. government, but more importantly, it affects their employees Medicare and social security benefits.”
According to documents filed with the court, Kyle Archie of Reno, was the part owner of Reno Rock Inc., GKPA Inc. and D Rockeries Inc. Kyle Archie admitted that he was responsible for the day-to-day operations of the businesses and that from 2003 through 2009; he had a legal duty to collect, truthfully account for, and pay over employment taxes to the IRS. He further admitted that although he collected these taxes from his employees’ wages and held them in trust, he failed to pay them over to the IRS for the third quarter of 2008.
Linda Archie of Reno, who is Kyle Archie’s mother, worked as the bookkeeper for Reno Rock Inc., GKPA Inc. and D. Rockeries Inc. and was responsible for maintaining the books and records of the companies and filing documents with various government agencies. She admitted that between 2003 and 2009, she failed to file employment tax returns on behalf of these businesses to account for the taxes that were withheld from the employees’ wages.
In addition to the prison term imposed, Kyle Archie was also ordered to serve three years of supervised release, and both Kyle and Linda Archie were ordered to pay restitution to the IRS in the amount of $1,235,528.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Bogden commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Carla B. Higginbotham of the District of Nevada and Trial Attorney Kathleen M. Barry of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
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Navajo Woman from Standing Rock, N.M., Sentenced to Prison for Federal Assault ConvictionRead the Press Release
ALBUQUERQUE – Chelsey A. Billy, 22, an enrolled member of the Navajo Nation who resides in Standing Rock, N.M., was sentenced today in federal court in Albuquerque, N.M., to 30 months in prison for her conviction on an assault charge. Billy will be on supervised release for three years after completing her prison sentence.
Billy was arrested on Jan. 7, 2016, on a criminal complaint charging her with assaulting a Navajo man with a hammer on Dec. 22, 2015. The victim was seriously injured, suffering a fracture to his left orbital eye socket and various lacerations to his head and face.
Billy was indicted on Jan. 26, 2016, and was charged with assault with a dangerous weapon, a hammer, with intent to do bodily harm and assault resulting in serious bodily injury. The indictment alleged that Billy committed the crimes on the Navajo Indian Reservation in McKinley County, N.M., on Dec. 22, 2015.
On July 18, 2016, Billy pled guilty to an assault resulting in serious bodily injury charge. In entering the guilty plea, Billy admitted striking the victim in the head with a hammer several times, causing serious bodily injury to the victim.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety and was prosecuted by Assistant U.S. Attorney Joseph Spindle.
Nashville Woman Pleads Guilty to Embezzlement SchemeRead the Press Release
Charlotte McEwen, 50, of Nashville, Tenn., pleaded guilty yesterday to eight counts of wire fraud in connection with a scheme to embezzle approximately $466,331 from her former employer, announced David Rivera, United States Attorney for the Middle District of Tennessee. McEwen was indicted by a federal grand jury on March 16, 2016.
In a hearing before U.S. District Court Judge Aleta Trauger, McEwen admitted to engaging in a scheme to embezzle from her employer, beginning in February 2010 and continuing for more than three years. McEwen admitted that while employed as the sole Payroll Garnishment Processor for Ingersoll Rand, Inc. (“IR”) in Nashville, she fraudulently transferred, via electronic transfers, approximately $466,331 from an IR bank account to her personal bank accounts. The funds McEwen transferred to herself were funds she withheld from IR employee paychecks in her position as IR’s Payroll Garnishment Processor, and pursuant to garnishment orders issued by creditors for unpaid debts owed by IR employees. McEwen then created and submitted fraudulent documents to IR in an attempt to conceal her actions.
McEwen faces up to 20 years in prison on each fraud count. She also faces a criminal fine of up to $250,000 for each fraud count, forfeiture of criminal proceeds, and will be ordered to pay restitution in the amount of $466,331. McEwen will be sentenced by Judge Trauger on January 26, 2017. Her 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 United States Secret Service. The United States is represented by Assistant U.S. Attorney Thomas J. Jaworski.
Mount Vernon Tax Preparer Sentenced in White Plains Federal Court to 51 Months in Prison for Filing False Tax ReturnsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that SAMUEL GENTLE, a tax preparer and the owner of tax preparation businesses named GenGen, Inc., and GenGen Financial, Inc., in Mount Vernon, New York, was sentenced today in White Plains federal court to 51 months in prison for obstructing the IRS and preparing false and fraudulent individual income tax returns for his clients. GENTLE was found guilty in July 2016 after a one-week trial before U.S. District Judge Cathy Seibel.
Manhattan U.S. Attorney Preet Bharara said: “As established at trial, Samuel Gentle abused his position as a tax preparer to file false tax returns on behalf of his clients, himself, and his businesses. His fraud resulted in over half a million dollars in losses to the IRS, and now a sentence of 51 months in prison for Gentle.”
As established by the evidence at trial:
From 2010 through 2014, GENTLE operated a large and thriving tax preparation business that prepared and submitted to the IRS, on average, 3,200 tax returns each year. These tax returns contained a pattern of false and fraudulently inflated deductions for business expenses and gifts to charity. Numerous clients of GENTLE testified that they had not provided GENTLE with any information that he could have used to support the false or inflated deductions.
As part of the investigation of this matter, an undercover IRS agent posed as GENTLE’S client. During the operation, the agent provided GENTLE with no records that he could have used to support any deductions. But, consistent with his pattern, GENTLE included false and fraudulent deductions for business expenses and gifts to charity on the tax return he prepared for the undercover agent.
GENTLE also failed to report on his own personal and business tax returns nearly half of the $1 million in receipts that he received for his tax preparation services from 2010 through 2014. He spread the receipts across eight bank accounts at five banks, and he failed to issue required IRS forms to himself or his employees, further concealing from the IRS the amount of receipts he and his business had received.
As confirmed by IRS audits as well as the evidence at trial, GENTLE’s crimes resulted in a loss to the IRS of more than $550,000.
In addition to the prison term, GENTLE, 59, of Mount Vernon, New York, was sentenced to one year of supervised release and ordered to pay a $125,000 fine and to pay the IRS over $295,000 in back taxes.
Mr. Bharara praised the investigative work of the Internal Revenue Service, Criminal Investigation, and thanked the IRS for its assistance.
This matter is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Jennifer Beidel, Margery Feinzig, and James McMahon are in charge of the case.
Middlesex County, New Jersey, Man Admits Role InRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man today admitted his role in a conspiracy to traffic approximately four kilograms of ethylone from China to New Jersey, U.S. Attorney Paul J. Fishman announced.
Thomas Seymore, 38, of Carteret, New Jersey, pleaded guilty before U.S. District Court Judge Katharine S. Hayden in Newark federal court to an indictment charging him with one count of conspiring to distribute ethylone, a Schedule I controlled substance.
According to documents filed in this case and statements made in court:
On June 10, 2014, Seymore conspired with others to possess with the intent to distribute approximately four kilograms of ethylone, which had been ordered from China and shipped to a location in Teaneck, New Jersey. Ethylone is an illegal synthetic drug that stimulates the nervous system and can cause hallucinogenic effects. Seymore was indicted by a federal grand jury on April 18, 2016, for his role in the drug trafficking conspiracy.
The conspiracy charge to which Seymore pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of up to $1 million. Sentencing is scheduled for Feb. 1, 2017.
U.S. Attorney Fishman credited special agents and task force officers of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski; the U.S. Department of Homeland Security-Homeland Security Investigations under the direction of Special Agent in Charge Terence S. Opiola, and the U.S. Postal Inspection Service under the direction of Inspector in Charge Maria L. Kelokates.
The government is represented by Assistant U.S. Attorneys Jonathan M. Peck and Tazneen Shahabuddin of the U.S. Attorney’s Office Criminal Division in Newark.
Middle District Election Officers AppointedRead the Press Release
United States Attorney G.F. Peterman, III announced today that Assistant United States Attorneys (AUSA) C. Shanelle Booker and Todd Swanson will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Booker and AUSA Swanson have been appointed to serve as the District Election Officers (DEO) for the Middle District of Georgia, and in that capacity are responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
United States Attorney Peterman said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Peterman stated that AUSA/DEO Booker and AUSA/DEO Swanson will be on duty in this District while the polls are open. They can be reached by the public at the following telephone number: 478-752-3511. This number is for reports of voting irregularities only. All press inquiries or requests for information should be directed to our Public Information Officer, Pamela Lightsey, at 478-621-2603.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The Macon FBI resident agency can be reached at (478) 745-1271, the Athens FBI resident agency can be reached at (706) 549-6477, and the Columbus FBI resident agency can be reached at (706) 596-9603.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
United States Attorney Peterman said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”
Methamphetamine Trafficker Sentenced to 12 Years in PrisonRead the Press Release
SAN JOSE – Baldemar Valencia Alcazar was sentenced yesterday to 12 years in prison for his role in a conspiracy to possess with intent to distribute, and to distribute, methamphetamine, announced United States Attorney Brian J. Stretch and Drug Enforcement Administration Special Agent in Charge John J. Martin. The sentence follows a guilty plea entered July 6, 2016, in which Valencia admitted to conspiring to possess with the intent to distribute methamphetamine.
Valencia, 35, a citizen of Mexico who was living in Sunnyvale at the time of the offense, admitted he conspired with other individuals to distribute more than 7.4 kilograms of methamphetamine in the Northern District of California between June 30, 2015, and August 4, 2015. In furtherance of the conspiracy, he distributed methamphetamine and possessed with the intent to distribute methamphetamine on numerous occasions during the course of his participation in the conspiracy. Valencia was indicted by a federal grand jury on October 8, 2015. He was charged with one count of conspiracy to possess with intent to distribute and to distribute methamphetamine, in violation of 21 U.S.C. §§ 846, 841(a)(1) and 841(b)(1)(A)(viii), and two counts of possession with intent to distribute methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(A)(viii). Valencia pleaded guilty to all three counts. There was no plea agreement in this case.
The sentence was handed down by the Honorable Edward J. Davila, U.S. District
Judge. In addition to the prison term, Judge Davila sentenced Valencia to a 5-year period of supervised release. The defendant has been in federal custody since December 3, 2015, and will begin serving his sentence immediately.
Assistant U.S. Attorneys Bill Gullotta and Chinhayi Cadet are prosecuting the case with the assistance of Theresa Benitez and Lakisha Holliman. This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
Massillon man charged with enticement and distribution of child pornographyRead the Press Release
Richard Snyder, 72, of Massillon, was charged with enticement and distribution of child pornography, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio.
Snyder knowingly used a computer and the Internet, to attempt to persuade, induce, entice and coerce, a 13-year-old girl, to engage in illegal sexual activity with him. This took place from May 26 through August 17, 2016, according to the indictment. The indictment also charges that on or about July 25, 2016, and July 26, 2016, Snyder knowingly distributed and attempted to distribute child pornography that, using any means and facility of interstate and foreign commerce, had been shipped and transported in and affecting interstate and foreign commerce by any means, including by computer.
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. The case was investigated by the Canton Office of the Federal Bureau of Investigation, the Ohio Internet Crimes Against Children Task Force, the Vermont Internet Crimes Against Children Task Force, the Jackson Township Police Department and the Canton Police Department.
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.
Managing Director of Venture Capital Firm Sentenced in Manhattan Federal Court in Connection with Multimillion-Dollar Ponzi SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that GREGORY W. GRAY, JR., was sentenced today in Manhattan federal court to two years in prison for securities fraud and perjury charges stemming from his scheme to defraud an investor of approximately $5 million to cover up his mismanagement of other investor funds. GRAY pled guilty on December 23, 2015, and was sentenced today by United States District Judge Sidney H. Stein.
Manhattan U.S. Attorney Preet Bharara said: “Gregory Gray deceived investors, claiming he would use their funds to buy shares of high-flying technology companies like Twitter and Uber. In reality, Gray did not make the investments he said he would, and later used new investor funds to pay back earlier investors. In an attempt to cover his tracks, Gray then lied about his investments to the SEC. Today, his federal crimes have led to a sentence of imprisonment.”
According to the allegations contained in the Information, the underlying criminal Complaint, and other statements made during court proceedings:
From at least in or about April 2014 through in or about February 2015, GRAY engaged in a Ponzi scheme to defraud investors who believed they had invested in funds GRAY controlled at Archipel Capital, LLC (“Archipel”), where GRAY was the Senior Managing Director.
Previously, from in or about June 2012 through in or about November 2013, GRAY raised over $5.2 million, from approximately 52 investors, for four Archipel “Social Media Funds.” GRAY promised to use that capital to purchase shares of Twitter before the company’s initial public offering (“IPO”). Based on GRAY’s representations to investors, GRAY promised to purchase over 200,000 pre-IPO Twitter shares.
GRAY frequently comingled funds between the various Archipel investment vehicles that he managed. Ultimately, GRAY’s withdrawals from the Social Media Funds left those funds with insufficient money to purchase the full complement of pre-IPO Twitter shares he had promised investors.
On or about November 6, 2013, Twitter had its IPO and began trading on the New York Stock Exchange. At that time, contrary to his representations to investors, GRAY had purchased only 80,000 pre-IPO Twitter shares for a total cost of $1,875,000. GRAY accordingly owed his investors millions of dollars’ worth of Twitter shares.
In an attempt to make up the shortfall of Twitter stock, in or about April 2014, GRAY persuaded Investor-1 to invest $5 million in Archipel’s “Late Stage Fund,” which GRAY also controlled. GRAY promised that, through that fund, he would use Investor-1’s $5 million investment to purchase a purported multimillion-dollar, privately held allotment of Uber shares. However, instead of using the $5 million as promised, GRAY instead used the money to make cash payments to investors in the Social Media Funds and to purchase post-IPO Twitter shares for those same investors, including Investor-1 himself.
When Investor-1 requested documentation of the purchase of Uber shares as promised, GRAY provided Investor-1 with a fabricated stock transfer agreement (the “Uber Stock Transfer Agreement”) that purported to show that the Late Stage Fund had purchased 175,438 Uber shares. In truth and in fact, and as GRAY well knew, the fund had not purchased any Uber shares.
On or about February 24, 2015, GRAY gave sworn testimony to the SEC. During his testimony, GRAY falsely stated, in substance and in part, that the Uber Stock Transfer Agreement reflected a bona fide purchase of Uber shares by the Late Stage Fund.
* * *
In addition to the prison sentence, GRAY, 41, was sentenced to three years of supervised release. The Court further ordered that GRAY forfeit $5,000,000 and pay $5,000,000 in restitution.
Mr. Bharara praised the work of the Federal Bureau of Investigation, and thanked the SEC for its assistance.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Damian Williams and Michael Ferrara are in charge of the prosecution.
Macomb Township Trustee Arrested and Charged for Demanding and Taking BribesRead the Press Release
An elected Trustee of Macomb Township was arrested by agents of the Federal Bureau of Investigation (FBI) today based on a criminal complaint charging him with demanding and taking bribes in exchange for his vote and official assistance on a municipal contract, United States Attorney Barbara McQuade announced.
McQuade was joined in the announcement by FBI Special Agent in Charge David P. Gelios and Manny J. Muriel, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, Detroit Field Office.
Clifford Freitas, 43, of Macomb Township, is charged with engaging in a pattern of corrupt activity, including demanding and accepting money in exchange for official acts as a Trustee. Freitas’ arrest is another part of an ongoing and long-running investigation into systemic corruption in multiple municipalities in southeast Michigan, primarily Macomb County. The investigation has employed telephone wiretaps, consensual audio and video recordings by cooperative individuals, undercover operations, physical surveillance, telephone tracking warrants, and subpoenas of financial records and other documents.
The complaint charges that Freitas demanded and accepted money from a municipal vendor in exchange for using his official position as a Trustee to get the vendor a municipal contract and to secure favorable terms for the company. In July 2015, Macomb Township put out a request for proposal for a municipal contract. Soon thereafter, Freitas approached a representative of a prospective vendor, and Freitas demanded money in return for Freitas’ support as a Trustee. Freitas agreed to accept $7,500 from the vendor in return for his assistance in getting the contract. Through his position as a Trustee, Freitas obtained sensitive bid information on the municipal contract in order to help the vendor, telling the vendor what bid was needed to beat out competing contractors. After the vendor was awarded the contract by Macomb Township, Freitas demanded an additional $35,000 from the company representative for his additional assistance as a public official relating to the contract. In May 2016, Freitas accepted $2,000 in cash from an undercover agent of the FBI, with the payment being video recorded.
“Bribery in municipal contracting undermines clean and effective government and erodes public trust,” said U.S. Attorney McQuade.
“The citizens of Michigan must be able to trust that government officials will perform their duties in the best interests of the communities they serve,” said David P. Gelios, Special Agent in Charge, Detroit Division of the Federal Bureau of investigation. “Today’s arrest is another unfortunate reminder that some public officials have lost sight of that obligation choosing instead to utilize their positions of authority to serve their own interests. The Detroit FBI along with its partners assigned to the Detroit Area Public Corruption Task Force remain committed to investigating those who criminally violate their oaths of office. I would encourage anyone who has information about corrupt activity in Macomb County or any other community in Michigan to contact the Detroit FBI Public Corruption tip line at 313-965-2222.”
This investigation is being conducted by the Macomb Resident Agency of the FBI and the FBI Detroit Area Corruption Task Force, a multiagency task force led by the FBI Detroit Division and comprised of the Internal Revenue Service – Criminal Investigation Division, Michigan State Police, Michigan Attorney General’s Office, and several other local and federal law enforcement agencies. It is being prosecuted by Assistant United States Attorneys R. Michael Bullotta and David A. Gardey.
Freitas will be in federal court this afternoon at 1pm for his initial appearance.
Upon conviction for a violation of Title 18, United States Code, Section 666, federal program bribery, Freitas faces a maximum of ten years in prison and a fine of up to $250,000.
A complaint is only a charge and is not evidence of guilt. Trial cannot be held on felony charges in a complaint. When the investigation is completed a determination will be made whether to seek a felony indictment.
Lenexa Man Sentenced for Impersonating IRS EmployeeRead the Press Release
KANSAS CITY, KAN. – A Lenexa man was sentenced Tuesday to five months he already served in jail for harassing former girlfriends and business partners by sending them letters on Internal Revenue Service letterhead saying they were under investigation for tax evasion, Acting U.S. Attorney Tom Beall said.
Jeffrey Nickerson, 56, Lenexa, Kan., pleaded guilty to one count of impersonating a federal employee. In his plea, Nickerson admitted he was an acquaintance of a woman who worked at the IRS Service Center in Kansas City, Mo. She brought IRS letterhead and IRS publications home. He used the information to send letters to former girlfriends and former business partners. The letters said the victims were under investigation as a result of reports being filed to the Internal Revenue Service Fraud Investigations Hotline.
Beall commended the U.S. Treasury Inspector General for Tax Administration and Assistant U.S. Attorney Chris Oakley for their work on the case.
Last Three Defendants Sentenced in Bangor Bath Salt Distribution ConspiracyRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Jacob Gagnon, 27, formerly of Bangor and Van Buren, and Jamie Ketchen, 43, formerly of Bangor, were sentenced yesterday; and Ryan Ellis, 37, formerly of Greenbush and Levant, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. for conspiracy to possess with the intent to distribute and to distribute MDPV, a chemical compound commonly referred to as “bath salts” or “monkey dust.”
Gagnon was sentenced to six years and three months in prison. Ketchen, who also pled guilty to maintaining a drug involved premises, was sentenced to 13 years and four months. Ellis, who also pled guilty to possession of firearms in connection with a drug trafficking offense, was sentenced to 15 years. Each defendant was also ordered to serve three years of supervised release.
According to court records, between April and December 2011, the defendants and their co-conspirators illegally distributed MDPV in Penobscot County and elsewhere. Ellis was the ring leader and obtained large quantities of the drug that he supplied to Gagnon, Ketchen and others, who distributed it to dealers in the Bangor area. Ellis also distributed the drug in the mid-coast area and in Aroostook County.
The three defendants were the last of sixteen defendants to be sentenced as part of this investigation which was conducted by the Maine Drug Enforcement Agency with assistance from the U.S. Drug Enforcement Administration, and the Bangor, Old Town, Brewer and Veazie Police Departments.
Justice Department Releases Information on Election Day Efforts to Protect the Right to Vote and Prosecute Ballot FraudRead the Press Release
In anticipation of the upcoming general elections, the Justice Department today provided information about its efforts, through the Civil Rights Division and Criminal Division, to ensure that all qualified voters have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation or fraud in the election process.
Civil Rights Division:
The Civil Rights Division is responsible for ensuring compliance with the civil provisions of federal statutes that protect the right to vote and the criminal provisions of federal statutes that prohibit discriminatory interference with that right.
The Civil Rights Division’s Voting Section enforces the civil provisions of a wide range of federal statutes that protect the right to vote including: the Voting Rights Act, the National Voter Registration Act, the Uniformed and Overseas Citizens Absentee Voting Act, the Help America Vote Act and the Civil Rights Acts. Among other things, collectively, these laws:
- prohibit election practices that have either a discriminatory purpose, based on race or membership in a minority language group, or a discriminatory result, with members of racial or language minority groups having less opportunity than other citizens to participate in the political process;
- prohibit voter intimidation;
- provide that individuals who need assistance in voting because of disability or illiteracy can obtain assistance from a person of their choice;
- provide for accessible election machines for voters with disabilities;
- require provisional ballots for voters who assert they are eligible but whose names do not appear on poll books;
- provide for absentee ballots for service members, their family members and U.S. citizens living abroad;
- require states to ensure that citizens can register through drivers’ license offices, public assistance and disability services offices, other state agencies and through the mail; and
- include requirements regarding maintaining voter registration lists.
The Civil Rights Division’s Criminal Section enforces federal criminal statutes that prohibit voter intimidation and voter suppression based on race, color, national origin or religion.
On Election Day, Nov. 8, 2016, the Civil Rights Division will implement a comprehensive program to help protect the right to vote, including:
- The Civil Rights Division will conduct monitoring in the field at polling places around the country (locations for monitoring will be announced closer to Election Day).
- Civil Rights Division attorneys in both the Voting and Criminal Sections in Washington, D.C., will be ready to receive election-related complaints of potential violations relating to any of the statutes the Civil Rights Division enforces. Attorneys in the division will take appropriate action and will consult and coordinate with local U.S. Attorneys’ Offices and with other entities within the Justice Department concerning these complaints before, during and after Election Day.
- Civil Rights Division staff will be available by phone to receive complaints related to voting rights (1-800-253-3931 toll free or 202-307-2767) or by TTY (202-305-0082). In addition, individuals may also report complaints, problems or concerns related to voting by fax 202-307-3961, by mail to [email protected] and by complaint forms that may be submitted through a link on the department’s website: https://www.justice.gov/crt/voting-section.
- Complaints related to violence, threats of violence or intimidation at a polling place should always be reported immediately to local authorities by calling 911. They should also be reported to the department after local authorities are contacted.
Criminal Division and the Department’s 94 U.S. Attorneys’ Offices:
The Department’s Criminal Division oversees the enforcement of federal laws that criminalize certain forms of election fraud and vindicate the integrity of the federal election process.
The Criminal Division’s Public Integrity Section and the department’s 94 U.S. Attorneys’ Offices are responsible for enforcing the federal criminal laws that prohibit various forms of election fraud, such as vote buying, multiple voting, submission of fraudulent ballots or registrations, alteration of votes and malfeasance by election officials. The Criminal Division is also responsible for enforcing federal criminal law prohibiting voter intimidation for reasons other than race, color, national origin or religion (as noted above, voter intimidation that has a basis in race, color, national origin or religion is addressed by the Civil Rights Division).
The U.S. Attorney’s Offices around the country designate Assistant U.S. Attorneys who serve as district election officers (DEOs) in the respective districts. DEOs are responsible for overseeing potential election-crime matters in their districts and coordinating with the department’s election-crime experts in Washington, D.C.
On Nov. 8, 2016, the U.S. Attorneys’ Offices will work with specially trained FBI personnel in each district to ensure that complaints from the public involving possible voter fraud are handled appropriately. Specifically:
- In consultation with federal prosecutors in the Public Integrity Section in Washington, D.C., the DEOs in U.S. Attorneys’ Offices, FBI officials at Headquarters in Washington, D.C., and FBI special agents serving as Election Crime Coordinators in the FBI’s 56 field offices will be on duty while polls are open to receive complaints from the public.
- Election-crime complaints should be directed to the local U.S. Attorney’s Offices or the local FBI office. A list of U.S. Attorneys’ Offices and their telephone numbers can be found at https://www.justice.gov/usao/find-your-united-states-attorney. A list of FBI offices and accompanying telephone numbers can be found at https://www.fbi.gov/contact-us.
- Public Integrity Section prosecutors are available to consult and coordinate with the U.S. Attorneys’ Offices and the FBI regarding the handling of election-crime allegations.
- Again, complaints related to violence, threats of violence or intimidation at a polling place should be reported first to local police authorities by calling 911.
Both protecting the right to vote and combating election fraud are essential to maintaining the confidence of all Americans in our democratic system of government. The department encourages anyone who has information suggesting voting discrimination or ballot fraud to contact the appropriate authorities.
Justice Department Releases Information on Election Day Efforts to Protect the Right to Vote and Prosecute Ballot FraudRead the Press Release
WASHINGTON – In anticipation of the upcoming general elections, the Justice Department today provided information about its efforts, through the Civil Rights Division and Criminal Division, to ensure that all qualified voters have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation or fraud in the election process.
Civil Rights Division:
The Civil Rights Division is responsible for ensuring compliance with the civil provisions of federal statutes that protect the right to vote and the criminal provisions of federal statutes that prohibit discriminatory interference with that right.
The Civil Rights Division’s Voting Section enforces the civil provisions of a wide range of federal statutes that protect the right to vote including: the Voting Rights Act, the National Voter Registration Act, the Uniformed and Overseas Citizens Absentee Voting Act, the Help America Vote Act and the Civil Rights Acts. Among other things, collectively, these laws:
- prohibit election practices that have either a discriminatory purpose, based on race or membership in a minority language group, or a discriminatory result, with members of racial or language minority groups having less opportunity than other citizens to participate in the political process;
- prohibit voter intimidation;
- provide that individuals who need assistance in voting because of disability or illiteracy can obtain assistance from a person of their choice;
- provide for accessible election machines for voters with disabilities;
- require provisional ballots for voters who assert they are eligible but whose names do not appear on poll books;
- provide for absentee ballots for service members, their family members and U.S. citizens living abroad;
- require states to ensure that citizens can register through drivers’ license offices, public assistance and disability services offices, other state agencies and through the mail; and
- include requirements regarding maintaining voter registration lists.
The Civil Rights Division’s Criminal Section enforces federal criminal statutes that prohibit voter intimidation and voter suppression based on race, color, national origin or religion.
On Election Day, Nov. 8, 2016, the Civil Rights Division will implement a comprehensive program to help protect the right to vote, including:
- The Civil Rights Division will conduct monitoring in the field at polling places around the country (locations for monitoring will be announced closer to Election Day).
- Civil Rights Division attorneys in both the Voting and Criminal Sections in Washington, D.C., will be ready to receive election-related complaints of potential violations relating to any of the statutes the Civil Rights Division enforces. Attorneys in the division will take appropriate action and will consult and coordinate with local U.S. Attorneys’ Offices and with other entities within the Justice Department concerning these complaints before, during and after Election Day.
- Civil Rights Division staff will be available by phone to receive complaints related to voting rights (1-800-253-3931 toll free or 202-307-2767) or by TTY (202-305-0082). In addition, individuals may also report complaints, problems or concerns related to voting by fax 202-307-3961, by mail to [email protected] and by complaint forms that may be submitted through a link on the department’s website: https://www.justice.gov/crt/voting-section.
- Complaints related to violence, threats of violence or intimidation at a polling place should always be reported immediately to local authorities by calling 911. They should also be reported to the department after local authorities are contacted.
Criminal Division and the Department’s 94 U.S. Attorneys’ Offices:
The Department’s Criminal Division oversees the enforcement of federal laws that criminalize certain forms of election fraud and vindicate the integrity of the federal election process.
The Criminal Division’s Public Integrity Section and the department’s 94 U.S. Attorneys’ Offices are responsible for enforcing the federal criminal laws that prohibit various forms of election fraud, such as vote buying, multiple voting, submission of fraudulent ballots or registrations, alteration of votes and malfeasance by election officials. The Criminal Division is also responsible for enforcing federal criminal law prohibiting voter intimidation for reasons other than race, color, national origin or religion (as noted above, voter intimidation that has a basis in race, color, national origin or religion is addressed by the Civil Rights Division).
The U.S. Attorney’s Offices around the country designate Assistant U.S. Attorneys who serve as district election officers (DEOs) in the respective districts. DEOs are responsible for overseeing potential election-crime matters in their districts and coordinating with the department’s election-crime experts in Washington, D.C.
On Nov. 8, 2016, the U.S. Attorneys’ Offices will work with specially trained FBI personnel in each district to ensure that complaints from the public involving possible voter fraud are handled appropriately. Specifically:
- In consultation with federal prosecutors in the Public Integrity Section in Washington, D.C., the DEOs in U.S. Attorneys’ Offices, FBI officials at Headquarters in Washington, D.C., and FBI special agents serving as Election Crime Coordinators in the FBI’s 56 field offices will be on duty while polls are open to receive complaints from the public.
- Election-crime complaints should be directed to the local U.S. Attorney’s Offices or the local FBI office. A list of U.S. Attorneys’ Offices and their telephone numbers can be found at https://www.justice.gov/usao/find-your-united-states-attorney. A list of FBI offices and accompanying telephone numbers can be found at https://www.fbi.gov/contact-us.
- Public Integrity Section prosecutors are available to consult and coordinate with the U.S. Attorneys’ Offices and the FBI regarding the handling of election-crime allegations.
- Again, complaints related to violence, threats of violence or intimidation at a polling place should be reported first to local police authorities by calling 911.
Both protecting the right to vote and combating election fraud are essential to maintaining the confidence of all Americans in our democratic system of government. The department encourages anyone who has information suggesting voting discrimination or ballot fraud to contact the appropriate authorities.
Justice Department Protects Eastern District of Texas Election ProcessRead the Press Release
BEAUMONT, Texas – Acting United States Attorney Brit Featherston announced today that Assistant United States Attorneys (AUSAs) have been appointed to lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Michelle Englade has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Texas, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
Acting United States Attorney Featherston said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, Acting United States Attorney Featherston said that in addition to AUSA/DEO Englade, AUSAs Allen Hurst and M. Andrew Stover will be on duty in the Eastern District of Texas while the polls are open. AUSA Englade can be reached by the public in Beaumont at 409-839-2538, AUSA Hurst can be reached in Tyler, Texas, at 903-590-1400, and AUSA Stover can be reached in Plano, Texas, at 972-509-1201.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The FBI can be reached by the public in the Eastern District of Texas at the following telephone numbers:
Beaumont – 409-832-8571
Frisco – 214-705-7000
Lufkin – 936-637-3834
Sherman – 903-892-8754
Texarkana – 870-773-3382
Tyler – 903-592-4301
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
Acting United States Attorney Featherston said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”
Jefferson County Man Sentenced for Killing Whooping CranesRead the Press Release
BEAUMONT, Texas – A 19-year-old Beaumont, Texas man has been sentenced for federal wildlife violations in the Eastern District of Texas announced Acting U.S. Attorney Brit Featherston.
Trey Joseph Frederick pleaded guilty on May 23, 2016 to a violation of the Migratory Bird Treaty Act and was sentenced to five years of federal probation today by U.S. Magistrate Judge Zack Hawthorn. As part of his probation, Frederick is prohibited from owning or possessing firearms, ammunition or any other dangerous weapon. He is also prohibited from hunting or fishing anywhere in the United States.
According to information presented in court, on Jan. 11, 2016, a Texas Game Warden received two calls reporting two whooping cranes had been shot on Blair Road in Jefferson County. Further investigation revealed the defendant had been seen in the area with a hunting rifle and had claimed to be hunting geese. Federal agents contacted Frederick at his home on LaBelle Road where he admitted to killing the cranes. Whooping cranes are migratory birds and are protected under the Migratory Bird Treaty Act making it unlawful to capture, kill, or attempt to capture or kill in the United States.
Acting U.S. Attorney Featherston quoted President Theodore Roosevelt saying, “’The nation behaves well if it treats the natural resources as assets which it must turn over to the next generation increased; and not impaired value.’” Featherston added, “Protecting our environment and wildlife is vital to making sure that future generations have the opportunity to enjoy the true beauty and excitement of nature.”
“The loss of these cranes is not simply a loss for the species. It is a loss for the community, for taxpayers and for future generations deprived of an opportunity to see these magnificent birds thriving in the wild," said Southwest Region Special Agent in Charge Nicholas E. Chavez of the U.S. Fish and Wildlife Service. "Moreover, the killing of these two whooping cranes is not an isolated incident. Over the past five years, more than 20 whooping cranes have been shot and killed in the U.S. By bringing criminals who perpetrate crimes against wildlife to justice, we hope to prevent future tragedies like this from occurring.”
“Justice was served here in no small part due to the strong partnership between Texas Parks and Wildlife Department game wardens and the United States Fish and Wildlife Services special agents, whose thorough and collaborative investigation of the heinous crime illustrates their commitment to protecting our shared natural resources, particularly endangered species like the whooping cranes,” said Colonel Craig Hunter, TPWD Director of Law Enforcement. “The fact that this act of senseless cruelty was universally condemned by the local community, who along with landowners played a vital role in this case being solved quickly, sends a strong message to future game law criminals; your actions will not be tolerated, nor will they go unpunished. We also appreciate the assistance from the United States Attorney’s Office and Assistant United States Attorney Joe Batte for making this case a priority.”
Frederick has been ordered to pay restitution to the International Crane Foundation in the amount of $12,907.50 and restitution to the Texas Parks and Wildlife Foundation in the amount of $12,907.50 for a total restitution judgment of $25,815.00. Frederick must also perform 200 hours of community service.
This case was investigated by special agents with the U.S. Fish and Wildlife Services, Office of Law Enforcement and Game Wardens with the Texas Parks and Wildlife Department and prosecuted by Assistant U.S. Attorney Joseph R. Batte.
James Bristol Pleads Not Guilty to Attempted Bank RobberyRead the Press Release
The United States Attorney for the District of Vermont announced that James Bristol, 44, of Burlington, pleaded not guilty yesterday in United States District Court in Burlington to a charge of attempted bank robbery. U.S. Magistrate Judge John M. Conroy ordered that Bristol be detained pending trial, which has not been scheduled.
According to court records, on June 3, 2016, a man entered the College Street branch of Citizens Bank in Burlington and presented the teller with a note which stated that he had a gun and wanted large denomination bills. The teller told the robber she did not have large bills, only $20s, whereupon the robber took back the note and left the bank without taking any money. Less than an hour later, Burlington Police officers detained Bristol several blocks from the scene of the robbery. They later found that the demand note was in Bristol’s pocket. Bristol was originally charged in state court with attempted assault and robbery, but that charge was dismissed after a federal grand jury indicted Bristol for attempted bank robbery last week.
The United States Attorney emphasizes that the charge in the indictment is merely an accusation and that the defendant is presumed innocent unless and until he is proven guilty.
If convicted, Bristol faces up to 20 years of imprisonment and a fine of up to $250,000. The actual sentence would be determined with reference to federal sentencing guidelines.
Allen is represented by the office of the Federal Public Defender. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Investment Adviser Pleads Guilty in Manhattan Federal Court to Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DAVID HOBSON, who served as an investment adviser in the Providence, Rhode Island, offices of two different national broker-dealer and investment advisers (“Brokerage Firm-1” and “Brokerage Firm-2”), pled guilty to engaging in a scheme to commit insider trading in connection with deals involving a pharmaceutical company (the “Pharma Company”) at which Michael Maciocio, HOBSON’s friend and client, worked. Maciocio, who had been employed by the Pharma Company, regularly possessed material, nonpublic information (“Inside Information”) concerning pending acquisitions and transactions under consideration by the Pharma Company. From at least 2008 through April 2014, Maciocio breached his duty of confidentiality to the Pharma Company by providing Inside Information about potential acquisitions and transactions to his friend and long-time broker, HOBSON. HOBSON, in turn, used the Inside Information to execute profitable securities trades for himself, for Maciocio, and for other clients of HOBSON’s.
U.S. Attorney Preet Bharara said: “As he admitted today, David Hobson exploited inside information provided by his friend and client Michael Maciocio to reap illegal profits for both of them. With Maciocio’s earlier guilty plea, both participants in this illegal insider trading scheme have now admitted to their crimes. Insider trading rigs the markets, and through prosecutions like this, we seek to make the securities markets fair.”
According to the allegations in the charging documents, including the Information and Indictment, and statements made in court proceedings:
From in or about May 2008 through in or about April 2014, Maciocio and HOBSON participated in a scheme to commit insider trading in advance of and in connection with acquisitions and transactions under consideration by the Pharma Company. Maciocio and HOBSON were childhood friends and HOBSON had served as Maciocio’s investment adviser and broker for many years.
Maciocio learned about the impending transactions through his role as a Master Planner in the Active Pharmaceutical Ingredient Supply Chain Group at the Pharma Company. In that role, Maciocio was tasked with evaluating manufacturing demands and capacity within the Pharma Company, and was consulted about potential acquisitions, to assist in determining whether the Pharma Company would be able to manufacture any new product in-house. Although Maciocio was not typically provided with the name of the target acquisition, he used the Inside Information he received – including the Pharma Company’s code name of the acquisition, the drug indication, the dosage, the phase of any clinical trial, and the chemical structure of the drug – to uncover the true identity of the target company. He was at times aided in this task by HOBSON.
Having learned the Inside Information about these impending transactions, Maciocio, in breach of fiduciary duties and other duties of trust and confidence owed to the Pharma Company, traded on his own behalf and tipped HOBSON so that HOBSON could use the information to trade both for himself and for Maciocio. HOBSON also used the Inside Information to trade in other of his clients’ accounts, first at Brokerage Firm-1 and later at Brokerage Firm-2.
HOBSON used the Inside Information that he received from Maciocio to make profitable trades in, among other securities: Medivation, Inc., Ardea Biosciences, Inc., and Furiex Pharmaceuticals, Inc. As a result of the scheme, HOBSON reaped more than $350,000 in ill-gotten gains for himself, for Maciocio, and for certain of HOBSON’s other clients.
* * *
HOBSON, 47, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and to one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5 million or twice the gross gain or loss from the offense;
Maciocio, 46, pled guilty on May 20, 2016, to one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, and two counts of securities fraud. Count One carries a maximum sentence of five years in prison. Counts Two through Four each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentences for the defendants will be determined by the judge.
Mr. Bharara praised the work of the FBI, and thanked the SEC.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Aimee Hector and Rebecca Mermelstein are in charge of the prosecution.
Illinois Man Sentenced on Fraud and Money Laundering ChargesRead the Press Release
St. Louis, MO – Adam Bernaix, Edwardsville, Illinois, was sentenced to 37 months imprisonment on a fraud and money laundering scheme involving false invoices submitted to his employer on behalf of a shell company he created.
According to his plea agreement, Bernaix earned approximately $350,000 through Trident Management Solutions, a company he created solely to bill companies doing business with his employer. Bernaix submitted invoices for "services rendered" to companies doing business with his employer, Albert Arno, an HVAC contractor in the City of St. Louis. Bernaix, as a project manager for Albert Arno, was able to mark up the invoices of Trident’s clients to Albert Arno so that his employer provided the extra money needed for Trident’s clients to pay their Trident bills.
Bernaix employed his father-in-law at one point to perform occasional jobs, but even after Trident’s sole employee left the company and Trident did absolutely nothing for its clients, Bernaix still sent Trident clients bills and marked up the client’s Albert Arno bills sufficiently to keep the money flowing to Trident.
Bernaix pled guilty in July to two felony counts of mail fraud and two felony counts of money laundering. He appeared today for sentencing before United States District Judge Henry Autrey. In addition to his term of imprisonment, Bernaix was ordered to pay $427,713 in restitution to the victim of his crime.
The case was investigated by the Federal Bureau of Investigation, U.S. Postal Inspection Service and IRS Criminal Investigation. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
German Shipping Corporations Convicted of Environmental CrimesRead the Press Release
Two German shipping companies that owned and operated the Motor Vessel (M/V) Nils B, pleaded guilty today to an environmental crime in federal court in San Diego before the Honorable Jan M. Adler, announced Assistant Attorney General John C. Cruden and United States Attorney Laura E. Duffy.
W. Bockstiegel Reederei GmbH & Co. KG (which operated the vessel) and W. Bockstiegel GmbH & Co. Reederei KG MS “NILS B” (which owned the vessel), pleaded guilty to one felony violation of the Act to Prevent Pollution from Ships for failing to accurately maintain an oil record book for the M/V Nils B. In doing so, the firms failed to disclose that oil contaminated water had been discharged into the ocean from the vessel without the use of pollution prevention equipment.
According to the plea agreement, on August 5, 2014, personnel from the United States Coast Guard boarded the vessel after its entry into the Port of San Diego, California. Once onboard, the Coast Guard discovered that the crew had failed to keep an oil record book for a significant period of time, modifications had been made to piping coming from the oil water separator and oil was discovered in discharge piping that should not have been present.
The defendants acknowledged that Coast Guard examiners took oil samples from the oil water separator’s overboard discharge valve and from the vessel’s sludge tank and the samples from the two locations matched. Under U.S. and international law, sludge is never to be discharged through an oil water separator. The Coast Guard also discovered a black hose near the oil water separator that contained oil slightly weathered light fuel oil mixed with lubricating oil. In the industry, such a hose is known as a “magic hose.” The defendants, in pleading guilty, admitted that the oil record book on board the vessel did not disclose any discharges of sludge between the time that the overboard discharge valve had been cleaned while the vessel was in dry dock in June of 2014 and its entry into the Port of San Diego in August.
Sentencing for this case has been set for Nov. 3. According to the plea documents, the company and the United States agree to recommend that the court impose a total criminal penalty of $750,000.00, of which $250,000.00 will be a community service payment for the benefit of the Tijuana River National Estuarine Research Reserve to further research related to the effects of pollution on the marine estuarine environment.
This case was investigated by U.S. Coast Guard Investigative Service and U.S. Environmental Protection Agency, Criminal Investigation Division personnel in San Diego, California. The case was prosecuted by Senior Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice and Assistant U.S. Attorney Melanie Pierson of the U.S. Attorney's Office for the Southern District of California.
German Shipping Corporations Convicted of Environmental CrimesRead the Press Release
Assistant U. S. Attorney Melanie Pierson (619) 546-7976
NEWS RELEASE SUMMARY – October 25, 2016
SAN DIEGO – Two German shipping companies that owned and operated the Motor Vessel “Nils B” pleaded guilty to an environmental crime in federal court today, admitting that they knowingly failed to keep records related to the discharge of sludge into the ocean.
W. BOCKSTIEGEL REEDEREI GmBH & CO. KG (which operated the vessel) and W. Bockstiegel GmBH & Co. Reederei KG MS “NILS B” (which owned the vessel), pleaded guilty to one felony violation of the Act to Prevent Pollution from Ships, 33 U.S.C. § 1908(a), for failing to accurately maintain an Oil Record Book for the Motor Vessel (M/V) Nils B.
By not maintaining an accurate Oil Record Book, the firms failed to disclose that oil contaminated water had been discharged into the ocean from the vessel without the use of pollution prevention equipment. As admitted at the time of the plea, on August 5, 2014, personnel from the United States Coast Guard boarded the vessel after its entry into the Port of San Diego, California. Once onboard, the Coast Guard discovered that the crew had failed to keep an Oil Record Book for a significant period of time, modifications had been made to piping coming from the Oil Water Separator, and oil was discovered in discharge piping that should not have been present.
The defendant acknowledged that Coast Guard examiners took oil samples from the Oil Water Separator’s overboard discharge valve and from the vessel’s sludge tank and the samples from the two locations matched. Sludge is never to be discharged through an Oil Water Separator; only machinery space bilge water may be discharged in that manner. The Coast Guard also discovered a black hose near the Oil Water Separator that contained slightly weathered light fuel oil mixed with lubricating oil. In the industry, such a hose is known as a “magic hose” because it makes the oil and sludge disappear like magic.
The defendants, in pleading guilty, admitted that the Oil Record Book on board the vessel did not disclose any discharges of sludge between the time that the overboard discharge valve had been cleaned (while the vessel was in dry dock in June of 2014) and its entry into the Port of San Diego in August.
According to the plea documents, the company and the United States agree to recommend that the Court impose a total criminal penalty of $750,000, of which $250,000 will be a community service payment for the benefit of the Tijuana River National Estuarine Research Reserve to further research related to the effects of pollution on the marine estuarine environment.
This case was investigated by U.S. Coast Guard Investigative Service and U.S. Environmental Protection Agency, Criminal Investigation Division personnel in San Diego, California. The case was prosecuted by Senior Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice, and Assistant U.S. Attorney Melanie Pierson of the U.S. Attorney's Office for the Southern District of California.
Sentencing is scheduled for November 3, 2016 at 9:30 a.m. before U.S. District Judge Dana Sabraw.
DEFENDANTS Case Number 16cr2440
W. Bocksteigel GmBH & Co., Reederei KG MS “NILS B”
Emden, Germany
W. Bockstiegel Reederei GmBH & Co. KG
Emden, Germany
SUMMARY OF CHARGES
Failure to Maintain Accurate Oil Record Book– Title 33, U.S.C., Section 1908(a)
Maximum penalty for a corporation: $500,000 fine
AGENCY
U.S. Coast Guard Investigative Service
U.S. Environmental Protection Agency, Criminal Investigation Division
Geary County Man Pleads Guilty in Kidnapping, Death of Junction City WomanRead the Press Release
TOPEKA, KAN. – A Geary County man pleaded guilty today to taking part in the kidnapping of a Junction City woman who was killed during the abduction, Acting U.S. Attorney Tom Beall said.
Drexel A. Woody, 26, who lived on Fort Riley at the time of the crime, pleaded guilty to one count of kidnapping resulting in death. The body of Amanda Clemons, 24, of Junction City, was found in February 2014 in Geary County, Kan.
In Woody’s plea, he admitted that on Feb. 7, 2014, he and his co-defendants met the victim, who was a prostitute, at a hotel in Junction City and kidnapped her. The defendants beat the victim in retribution for comments she had made on social media. During the beating, the defendants demanded the victim pay $300. They took the victim to another hotel room in an unsuccessful attempt to get the money, after which they transported her to Woody’s residence on Fort Riley.
While at Woody’s residence, the defendants allowed the victim to call her young son and her mother. The victim’s mother realized the victim was in danger and called Junction City Police. When police called the victim’s number to check on her, and the defendants listened to the call on speaker phone. Fearing arrest, the defendants transported the victim to a bridge in a remote part of Geary County, where they resumed the beating and attacked her with a knife. The victim broke free and jumped off the bridge, falling 15 feet and breaking her ankle. The defendants found the victim in the snow and resumed the assault during which they cut her throat and killed her.
Woody is set for sentencing Jan. 30. He faces a penalty of up to life in federal prison.
Co-defendants who are awaiting trial include:
Larry L. Anderson, 27, Manhattan, Kan.
Marryssa M. Middleton, 25, Fort Riley, Kan.
Shantrell D. Woody, 27, Fort Riley, Kan., formerly an active duty service member.
Christopher Pugh, 32, Junction City, Kan.
Beall commended the Junction City Police Department, the Grandview Plaza Police Department, the Geary County Sheriff’s Office, the Riley County Police Department, the Fort Riley Criminal Investigation Division, the FBI, Assistant U.S. Attorney Tony Mattivi, Assistant U.S. Attorney Jared Maag and Geary County Attorney Steven Opat for their work on the case.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Four men sentenced to prison for defrauding hundreds of investors out of $10 millionRead the Press Release
Four Ohio men were sentenced to prison for defrauding investors out of more than $10 million by selling unregistered securities and making several misrepresentations to investors about the product they purported to develop, law enforcement officials said.
Kenneth Jackson, 59, of Glenmont, William Schureck, 81, of Lexington, Dennis Deciancio, 73, of Macedonia, and Daryl Dane Donohue, 67, of Mansfield, were convicted following a trial earlier this year on counts including conspiracy to commit mail and wire fraud, conspiracy to launder money, mail fraud, wire fraud, money laundering, making false statements and other charges.
Jackson was sentenced to more than 15 years in prison. Schureck was sentenced to nine years in prison. Deciancio was sentenced to nearly six years in prison. Donahue was sentenced to more than four years in prison.
“These defendants misled investors and lied about their product,” said U.S. Attorney Carole Rendon said. “They earned these prison sentences by stealing the millions of dollars from hundreds of people.”
“These four individuals conspired to misrepresent a product to their investors in order to make a profit,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office. “The FBI will continue efforts to bring to justice those that have duped investors out of their hard-earned money.”
“When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Today's sentencings demonstrates how federal law enforcement will band together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain. IRS Criminal investigators will continue to use their financial expertise to identify and trace laundered funds in these types of investor fraud schemes.”
All four men were affiliated with Medical Safety Solutions, or MSS, a company Jackson founded in 2007 which operated out of Mansfield and had a purported “research and development center” at Jackson’s home in Glenmont. Jackson held the title of Director of Research and Development at MSS. Schureck co-founded the company held the title of Chief Executive Officer at MSS. Deciancio co-founded the company and attended trade shows on the company’s behalf. Donohue was a longtime associate of Jackson who communicated with shareholders of MSS and held himself out as an “FDA consultant” hired by the company for the sole purpose of obtaining Food and Drug Administration approval for the Sharps Terminator, according to trial testimony.
The founders of MSS held the company out as an entity created to develop, market and sell a hypodermic needle destruction device they called the Sharps Terminator. The Sharps Terminator required premarket approval from the FDA before it could be sold in the United States. Jackson and Schureck filed a provisional application for a patent on the Sharps Terminator around April 2007 but did not file an actual patent application until September 2011. MSS filed a premarket approval application for the Sharps Terminator in October 2012. Between 2007 and May 2013, the defendants were engaged in the unregistered sale of securities. They did this by seeking out individuals to buy private shares of stock in MSS, but those shares were not registered with the Securities and Exchange Commission, according to trial testimony.
They defrauded investors by inducing them to buy stock and making false and fraudulent misrepresentations about MSS and the Sharps Terminator, including: that MSS had submitted a premarket approval application when it had not; that FDA approval of the Sharps Terminator was forthcoming or imminent when MSS had not even initiated the approval process; that the FDA had approved the Sharps Terminator when it had not; that the product was “market ready” that was ready for mass production when it was not, and other misrepresentations, according to trial testimony.
To make MSS appear functional and the Sharps Terminator market ready, the defendants took current and prospective investors to MSS’s “R&D facility” and showed them parts, a small number of assembled Sharps Terminator units, and large numbers of Sharps Terminator boxes, many of which were really empty, according to the indictment.
More than 500 investors were defrauded as part of the scheme. They lost more than $10 million between 2007 and 2013, according to trial testimony and court documents.
Jackson and Schureck transferred the money to cover other expenses, and Jackson gambled more than $3.3 million at Mountaineer Casino between 2009 and 2013, according to the court documents.
This case is being prosecuted by Assistant U.S. Attorneys Rebecca Lutzko and Adam Hollingsworth following an investigation by the Federal Bureau of Investigation, the Internal Revenue Service—Criminal Investigations and the Food and Drug Administration.
Update Feb. 5, 2025:
In May 2013, before the indictment was returned in this matter, the defendants caused the company that they operated in connection with their fraud scheme—Medical Safety Solutions (“MSS”)—to transfer the use and management of the intellectual property for the Sharps Terminator device, including its patents, designs, proprietary information, and trademarks, to a Texas limited liability company known as “Sharps Terminator LLC.” Sharps Terminator LLC further took over the FDA application and approval process for the device under this agreement, and was given full control of the day-to-day management of the transferred intellectual property and the manufacture of distribution of the product. Defendants transferred the intellectual property in return for MSS and its shareholders receiving a share of net profits from Sharps Terminator LLC’s possible future sale of the Sharps Terminator device. As of the sentencing date (October 25, 2016), two independent third parties, specifically, Texas limited liability companies The Bucley Group, LLC, and Four on Point, L.L.C., owned and operated Sharps Terminator LLC, and none of the charged defendants maintained any control of any of those companies. Further, as part of the defendants’ sentences, the district court ordered that all defendants disgorge any shares of stock that they held in MSS, such that the MSS shareholders who were the victims of defendant’s scheme would receive the benefit of MSS’s agreement with Sharps Terminator LLC.
Four Individuals, Including a Former Miami-Dade County Procurement Employee, Pled Guilty in $5,000,000 Fraud and Kickback SchemeRead the Press Release
Four individuals, including a former Miami-Dade County procurement employee pled guilty in a $5,000,000 fraud and kickback scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Roy Jesus Bustillo, 37, Rolando Perez, 57, and Jose Barroso, 51, all of Miami, pled guilty to a one-count Information charging them with conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 371. Bustillo, Perez, and Barroso will be sentenced on January 6, 2017 at 9:00 a.m. before U.S. District Judge Robert N. Scola, Jr. Bustillo, Perez, and Barroso face a statutory maximum term of imprisonment of 5 years and a fine of up to $250,000. Ygnacio Valdez, 45, of Miami, a former employee in the Procurement Section of the Miami-Dade County Aviation Department, pled guilty to misprision of a felony, in violation of Title 18, United States Code, Section 4. Valdez will be sentenced on December 20, 2016 at 11:30 a.m. before U.S. District Judge Ursula Ungaro. Ygnacio Valdez faces a statutory maximum term of imprisonment of 3 years and a fine of $250,000.
According to the court record, including a stipulated statement of facts, Bustillo was the exclusive area representative in South Florida for the sale of certain LED light fixtures. In or about 2010, Ivan Valdes, a co-conspirator who previously pled guilty for his involvement in the scheme, told Barroso that he would request that the Miami-Dade County Aviation Department purchase the light fixtures represented by Bustillo, if he was paid a share of the proceeds. Valdes and Barroso agreed and during the period of 2010 through and including 2015, the Miami-Dade County Aviation Department issued approximately twenty requests for Invitations to Quote for the purchase of millions of dollars of LED light fixtures. Bustillo provided a quote to each of the vendors interested in competing for the Invitation to Quote. Global Electrical & Lighting Supplies, Inc., owned by Rolando Perez, submitted bids and was awarded the contracts for each and every Invitation to Quote issued. Perez and Bustillo had a secret agreement wherein Perez would be the only vendor who knew the actual price that Bustillo had agreed upon with the lighting manufacturer for the light fixtures and that a fake mounting accessory was included in the Invitations to Quote. Knowing the additional profit that was to be received from each of the contracts, Bustillo and Perez were able to win the Invitation to Quote by keeping Perez’ bid price low. In order to help ensure that Perez was awarded each of the contracts, Ivan Valdes paid thousands of dollars in cash to Ygnacio Valdez, whose duties in the procurement section in the Miami-Dade County Aviation Department, included collecting and tallying the bids and declaring the lowest responsive bidder on the Invitations to Quote.
On two occasions, Ivan Valdes instructed Barroso to direct Perez to bid on an Invitation to Quote for light fixtures, but he further instructed that the light fixtures should not be ordered from the lighting manufacturer. Instead, on one occasion the conspirators used light fixtures already in stock at the Miami-Dade County Aviation Department to satisfy the purchase. On the other occasion, no light fixtures were ever provided, not even from those already in stock. Perez bid and won the contracts and he and his co-conspirators were paid approximately $500,000 for light fixtures that were never provided to Miami-Dade County Aviation Department.
During the course of the conspiracy, the co-conspirators defrauded the Miami-Dade County Aviation Department of approximately $5,250,000. Barroso and Ivan Valdes split fraudulent proceeds of approximately $2.2 million. Bustillo, through his companies, received fraudulent proceeds of approximately $764,000. Perez received fraudulent proceeds of approximately $1.8 million.
Mr. Ferrer commended the investigative efforts of the FBI and the Miami-Dade County State Attorney’s Office and its Public Corruption Unit in connection with the investigation of this matter. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Walgreens Clinical Pharmacy Manager Pleads Guilty to $4.4 Million TennCare Fraud SchemeRead the Press Release
GREENEVILLE, Tenn. – On Oct. 25, 2016, Amber Reilly, 33, of Jonesborough, Tenn., pleaded guilty to one count of healthcare fraud contained in a federal information, before the Honorable J. Ronnie Greer, U.S. District Judge. Reilly was the former Clinical Pharmacy Manager at the Walgreens Specialty Pharmacy located in the Holston Valley Hospital in Kingsport, Tenn.
Sentencing has been set for Jan. 30, 2017. Reilly faces a potential sentence of up to 10 years in prison, a fine of up to $250,000, and supervised release of up to three years.
In a detailed plea agreement on file with the U.S District Court, Reilly admitted that between October 2014 and April 2016, she falsified prior authorizations, medical lab reports, and drug test results for at least 51 Hepatitis C patients who had prescriptions for the expensive Hepatitis C drugs of Sovaldi®, Harvoni®, Viekira Pak®, or Daklinza®. These patients had health insurance through TennCare, which does not pay for Hepatitis C prescriptions for patients who abuse illicit substances or who have limited or no scarring of the liver. The patient’s authentic medical lab reports and drug tests showed that they failed to meet TennCare eligibility requirements. However, Reilly admitted to replacing disqualifying information regarding levels of liver scarring and illicit substance abuse on the authentic records with qualifying information, and then submitting the altered records to TennCare. She also admitted to fabricating allergies on the prior authorization forms of some of these patients so they could receive the most expensive Hepatitis C drug, Harvoni®.
As a result of Reilly’s conduct, TennCare paid at least $4,400,000 to purchase Sovaldi®, Harvoni®, Viekira Pak®, and Daklinza® prescriptions for these 51 patients, which they would not have paid if true and accurate prior authorizations, drug test results, and medical lab reports pertaining to these patients had been submitted.
The investigation, which led to Reilly’s guilty plea, was conducted by the Tennessee Bureau of Investigation and Department of Health and Human Services – Office of the Inspector General. Assistant U.S. Attorney T.J. Harker represented the United States.
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Former Fish and Wildlife Service Employee Pleads Guilty to Making False Statements in Disclosure FormsRead the Press Release
A former senior employee of the Interior Department’s Fish and Wildlife Service (FWS) pleaded guilty to making false statements in several disclosure forms to conceal approximately $300,000 of income that he received from an association that received grants and cooperative agreements from the FWS.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S Department of the Interior Deputy Inspector General Mary L. Kendall made the announcement.
Stephen M. Barton, 67, of Boise, Idaho, pleaded guilty yesterday before U.S. Magistrate Judge Ronald E. Bush of the District of Idaho. He is scheduled to be sentenced on Jan. 24, 2017.
According to his plea agreement, Barton worked as the chief of administration and information management for FWS beginning in 2007. Throughout his entire time at FWS, Barton also worked as treasurer for an association that received grants and cooperative agreements from FWS.
According to admissions made in connection with his plea agreement, Barton willfully and knowingly submitted false disclosure forms to FWS, including a request for ethics approval to engage in outside work or activity, a confidential financial disclosure report (OGE Form 450), and several confidential certificate of no new interests forms (OGE Form 450-A), in which he concealed approximately $300,000 of income that he received from the association between Jan. 1, 2010, and Dec. 31, 2014.
The Interior Department’s Office of Inspector General’s Eastern Division investigated the case. Trial Attorney Victor R. Salgado of the Criminal Division’s Public Integrity Section is prosecuting the case.
Former Chief Operating Officer at MetroHealth Hospitals indicted for taking bribesRead the Press Release
The former Chief Operating Officer of MetroHealth Hospital System is one of four men indicted for their roles in a conspiracy to defraud the hospital and others through a series of bribes and kickbacks totaling hundreds of thousands of dollars related to the hospital’s dental program, law enforcement officials said.
Named in the indictment are: Edward R. Hills, 56, of Aurora; Sari Alqsous, 32, of Cleveland; Yazan B. Al-Madani, 32, of Westlake; and Tariq Sayegh, 38, of Cleveland.
Hills worked in various capacities at MetroHealth, including as Chief Operating Officer and Director of MetroHealth Dental. He also served as interim President and Chief Executive Officer from December 2012 through July 2013. Alqsous, Al-Madani and Sayegh are dentists who worked for MetroHealth.
“I hoped we had reached a point in Cuyahoga County where public employees taking cash bribes and using downtown apartments to entertain friends was a thing of the past,” U.S. Attorney Carole S. Rendon said. “We will remain vigilant in stamping out public corruption and these defendants will be held accountable for their crimes.”
“Being extorted is not what a dental resident is expecting when applying to a dental program but that is exactly what happened, and that is not the only illegal scheme these four devised,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office. “MetroHealth officials discovered possible wrongdoing, contacted the FBI, and partnered with the FBI to ensure that these individuals would be held accountable for their criminal actions.”
“These government-funded programs were designed to help the men, women, and children of Cuyahoga County, but these individuals defrauded them for their own personal gain and used their companies as personal piggy banks." said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Therefore, in partnership with the U.S. Attorney’s Office and the FBI, the IRS Criminal Investigation Division gives priority to investigations involving the alleged breach of the public trust by public officials at any level.”
“This investigation found that these defendants were motivated by greed to manipulate the health care system and extort dental residents in order to line their own pockets,” said Ohio Attorney General Mike DeWine.
According to the 33-count indictment unsealed today in U.S. District Court:
Hills, Alqsous and Al-Madani engaged in a RICO conspiracy from 2008 through this year involving a series of elaborate bribery conspiracies, witness tampering and other crimes. These bribes include Hills soliciting cash, checks, a $3,879 Louis Vuitton briefcase, a 55-inch television, airline flights and use of a downtown apartment from Alqsous, Al-Madani and others. In return, Hills took official actions on their behalf, including allowing them to work at their private dental businesses during regular business hours while receiving a full-time salary from MetroHealth.
Alqsous, Al-Madani and others gave cash, checks and other things of value to Hills beginning in 2009. The indictment details text messages and meetings, often at expensive restaurants, which resulted in cash being deposited into Hills’ bank accounts.
Alqsous sent a text message to Al-Madani and another person in 2013 that stated: “With 22nd of October approaching we ll be celebrating Dr hills bday earlier this year…1000 dollars each is the gift from the 3 sons their father.” Later that day, $3,000 was deposited into Hills’ bank account.
In 2012, Alqsous rented and lived in an apartment at the Perry Payne apartment building in downtown Cleveland. When he bought a residence, Hills instructed Alqsous to continue paying rent and other bills at the Perry Payne building, even though Alqsous would no longer be living there. Hills used the Perry Payne apartment to house an associate and for his own personal use in 2013 and 2014 while Alqsous, acting on Hills’ orders, continued to pay rent and other bills.
Hills instructed Alqsous to purchase furniture for the apartment for Hills’ personal use. Alqsous sent Hills a text in 2013 stating: “I bought your bedroom yesterday…there is mirrors everywhere…You will like it.”
Hills became interim President and CEO of the MetroHealth Hospital System in December 2012. Around that time, he told Alqsous, Al-Madani and others that he wanted a specific Louis Vuitton briefcase because his predecessor had a similar briefcase.
Alqsous texted a photo of the briefcase to Hills and wrote: “The guys are also very excited about their raise haha.” Hills responded with: “Thanks I’m so excited to have my bag to start my new job as #1.” Later that day, Alqsous, Al-Madani and others purchased the briefcase for $3,879 from Saks Fifth Avenue in Beachwood and later presented it to Hills.
As director of MetroHealth Dental, Hills was responsible for determining monthly bonuses for dentists who produced receipts in excess of their monthly salary and benefits. Dentists typically received a monthly bonus totaling 25 percent of the monies they generated for excess receipts.
Between 2010 and 2014, Hills regularly upwardly adjusted the bonuses of Alqsous, Al-Madani and others, by a total of approximately $92,829.
Hills also allowed Alqsous, Al-Madani and others to retain full-time salaries and benefits at MetroHealth without requiring them to work full-time hours, thus allowing them to operate private dental clinics. Hills, acting at the request of Alqsous and Al-Madani, provided MetroHealth dental residents to practice at those private clinics during regular business hours. Neither Alqsous nor Al-Madani paid wages or salaries to the resident dentists.
Additionally, Alqsous, Al-Madani and Sayegh solicited and accepted bribes totaling tens of thousands of dollars from prospective candidates to the MetroHealth Dental residency program.
In a typical year, the MetroHealth Dental residency accepted four to six candidates for the residency program from a pool of 40 to 60 applicants. Alqsous, Sayegh and Al-Madani each had the authority to influence the selection of dental residents, and Hills had final decisional authority over who was selected for the residency program.
Alqsous and Sayegh often identified and selected candidates who were from Jordan or trained at a Jordanian dental school, telling them they would have to pay a “donation” to MetroHealth to be considered. Alqsous and Sayegh directed the candidates to pay the “donation” directly to them, and in some cases, told the candidates a portion of the money would go to Hills.
Alqsous, Sayegh and Al-Madani solicited at least $75,000 in bribes from resident dentist candidate between 2008 and 2014.
In another conspiracy, Al-Madani and Alqsous paid bribes to Hills in exchange for him taking actions to refer Medicaid recipients to private dental clinics owned by Al-Madani and Alqsous instead of MetroHealth. All three took steps to conceal this activity by claiming kickback checks totaling $17,600 written to Hills were for “consultation fees” or “professional fees”.
Hills, Alqsous and Al-Madani also conspired to obstruct justice, instructing people not to cooperate with law enforcement after becoming aware of the federal investigation in 2014.
Hills also made false statements on tax returns, failing to claim approximately $165,751 in unreported income stemming from bribes, kickbacks and other things of value between 2011 and 2013.
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.
This case is being prosecuted by Assistant U.S. Attorneys Om Kakani and Michael L. Collyer following an investigation by the FBI, IRS-CI, Ohio Bureau of Criminal Investigation and the Ohio Office of the Inspector General.
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.
The investigation is ongoing.
Former Beaumont ISD Teacher Sentenced for Child Exploitation ViolationsRead the Press Release
BEAUMONT, Texas — A 56-year-old former Jefferson County, Texas school teacher has been sentenced to federal prison for child exploitation violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
Gary Alan George pleaded guilty on April 5, 2016, to receiving child pornography and was sentenced to 60 months in federal prison today by U.S. District Judge Thad Heartfield.
According to information presented in court, during an undercover operation led by Homeland Security, George, a former middle school teacher from 1999 to 2014 with the Beaumont Independent School District, distributed images containing child pornography to an investigator. A search warrant was executed at George’s residence resulting in the seizure of electronic devices. Forensic analysis of the electronic devices revealed thousands of images containing child erotica and child pornography. George was indicted by a federal grand jury on May 6, 2015.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Homeland Security Investigations and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Lesley A. Woods.
Former Assistant Vice President of Bank Sentenced to over Six Years in Prison for Embezzling More Than $1 MillionRead the Press Release
NEWARK, N.J. - A Bergen County, New Jersey, woman was sentenced today to 81 months in prison for embezzling more than $1 million while she worked at a bank in Fort Lee, New Jersey, U.S. Attorney Paul J. Fishman announced.
Miye Chon, a/k/a/ “Karen Chon,” 36, of Englewood Cliffs, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to Counts One, Two, and 29 of a superseding indictment charging her with bank fraud, embezzlement or misapplication of funds by a bank officer or employee, and aggravated identity theft. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Chon was employed by BankAsiana, a federally insured financial institution, as an operations officer and later as an assistant vice president and operations officer at the Fort Lee branch until the bank was acquired by Wilshire Bank in October 2013. Chon had access to customer accounts and the bank’s internal account records, computer system and vault. Over several years, Chon stole more than $1 million from BankAsiana’s customer accounts by regularly making unauthorized transfers from customer certificate of deposit (CD) accounts into BankAsiana’s vault cash account and then physically removing cash from the bank’s vault.
Chon accomplished this scheme on dozens of occasions, typically taking tens of thousands of dollars at a time. One time, she converted $100,000 from a customer’s CD account. As part of the scheme, Chon also opened up a bank account in an individual’s name and forged checks using that individual’s name without permission.
In addition to the prison term, Judge Walls sentenced Chon to two years of supervised release and ordered her to pay restitution of $1,350,081.
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.
The government is represented by Assistant U.S. Attorneys Daniel Shapiro and Lakshmi Srinivasan Herman of the U.S. Attorney’s Office’s Economic Crimes Unit.
Today’s sentencing is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov
Defense counsel: Matthew Jeon Esq., Fort Lee, New Jersey
Former Arlington, Texas, Man Sentenced to 72 Months in Federal Prison in Passport Fraud CaseRead the Press Release
FORT WORTH, Texas — A former fugitive who was wanted for various offenses, including most recently, making a false statement on a passport application, pleaded guilty to that offense in federal court and has been sentenced by U.S. District Judge Reed C. O’Connor to 72 months in federal prison, announced U.S. Attorney John Parker of the Northern District of Texas.
Avniel Awan Anthony, 40, a U.S. citizen and former resident of Arlington, Texas, was taken into custody on April 14, 2016, by the Diplomatic Security Service (DSS) and the U.S. Marshals Service (USMS). Anthony pleaded guilty in June 2016 to an indictment charging one count of false statement in passport application.
In documents filed in the case, Anthony admitted that in October 2013, he willfully and knowingly made a false statement in an application for a passport, when he knowingly falsely stated his name was “Dominic Dewayne Wilson” on the passport application he submitted at the U.S. Post Office located on E. Bardin Road in Arlington. In support of that application, Anthony presented a postal clerk a Texas identification card bearing his photograph and the name “Dominic Dewayne Wilson,” and he falsely swore that the information on the application was true.
Anthony was a DSS fugitive wanted for passport fraud, identity theft, evading the police, and being a felon in possession of a firearm. Anthony changed his identity and fled to Playa de Carmen, Mexico, where he remained a fugitive until DSS located him in March 2016.
DSS and the USMS coordinated with the Playa de Carmen Tourist Police and Mexican immigration officials to locate, arrest, and return Anthony to the U.S. to face charges.
The DSS is the security and law enforcement arm of the U.S. Department of State with agents located in more than 160 countries worldwide. DSS and the USMS work together to locate and return U.S. fugitives from abroad.
Assistant U.S. Attorney J. Michael Worley prosecuted the case.
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Firearms Dealer Gets over Five Years in Prison for Selling More Than 200 Guns to Drug Dealer, Other Criminals in South JerseyRead the Press Release
CAMDEN, N.J. – A Burlington County, New Jersey, man was sentenced today to 70 months in prison for selling to a Camden drug dealer and other criminals in the Camden area at least 200 firearms that he purchased with cash from other illicit firearms dealers, U.S. Attorney Paul J. Fishman announced.
Joshua Jackson, 36, a/k/a “Trent,” of Willingboro, New Jersey, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count each of dealing firearms without a license, conspiracy to deal in firearms without a federal firearms license, and possession of firearms by a convicted felon. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this and related cases and statements made in court:
Jackson admitted that between December 2009 and September 2010, he sold or brokered the sale of at least 200 handguns that he purchased with cash from illegal gun distributors in Ohio and from straw purchases made by his associates from gun stores in Columbus, Ohio.
Jackson sold many of the weapons to Terrance Laboo, 43, of Oaklyn, New Jersey. Laboo, who previously pleaded guilty in this matter, admitted that at the time he purchased these firearms, he was distributing PCP and cocaine from the corner of 4th and Chestnut Streets in Camden. Laboo also admitted that he sold, directed or brokered the sale of many of the firearms he purchased to other drug dealers in southern New Jersey.
Jackson obtained most of the firearms through purchases at gun shows from unlicensed gun sellers who were not subject to background checks. Some of the firearms also were purchased at Ohio gun stores by straw purchasers working for Jackson, who then transported the handguns to New Jersey from Ohio and resold them to Laboo and others in the Camden area.
Jackson transported the illegal firearms into the Camden area using a rental car or by having an associate transport them in duffel bags on Greyhound buses running between Columbus and bus terminals in Philadelphia and Mount Laurel, New Jersey.
In addition to the prison term, Judge Kugler sentenced Jackson to three years of supervised release.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s sentence. He also thanked the U.S. Attorney’s Office in the Southern District of Ohio, directed by U.S. Attorney Benjamin C. Glassman, and agents of the ATF Field Division in Columbus, under the direction of Acting Special Agent in Charge Bradley Earman for their assistance.
The government is represented by Assistant U.S. Attorney Patrick C. Askin of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Justin Loughry Esq., Philadelphia
Fifty-seven Pounds of Meth Earns Driver 10 Years in Federal PrisonRead the Press Release
TOPEKA, KAN. – A man from Washington state was sentenced Monday to 10 years in federal prison for drug trafficking in Kansas, Acting U.S. Attorney Tom Beall said.
Hector M. Birrueta, 32, Pasco, Wash., pleaded guilty to one count of possession with intent to distribute methamphetamine. Law enforcement officers found 57 pounds of methamphetamine in his car when they stopped him Oct. 17, 2015, on I-70 Ellis County, Kan.
Beall commended the Drug Enforcement and Assistant U.S. Attorney Michelle Jacobs for their work on the case.
Federal and State Officials and Maine ACLU Attorney Available to Field Election Fraud ClaimsRead the Press Release
Contact: John G. Osborn
Tel: (207) 771-3214
Andrew McCormack
Tel: (207) 262-4615
Assistant U.S. AttorneysPortland, Maine: United States Attorney Thomas E. Delahanty II announced today that his office, in cooperation with Maine State officials, will participate in the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016 general elections. The program is designed to handle complaints in the District of Maine of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington and the State of Maine Attorney General’s Office.
Assistant U.S. Attorneys (AUSAs) John G. Osborn and Andrew McCormack will lead the efforts of the U.S. Attorney’s Office. AUSAs Osborn and McCormack have been appointed to serve as District Election Officers (DEOs) for District of Maine. Maine Assistant Attorney General (AAG) Phyllis Gardiner and Deputy Secretary of State Julie Flynn will coordinate election oversight for the State of Maine. Attorney Zachary Heiden of the American Civil Liberties Union (ACLU) of Maine will also be available to assist anyone who experiences difficulty in exercising their right to vote.
In addition, the Federal Bureau of Investigation (FBI) will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day.
Arrangements have been made for attorneys to have immediate access to both federal and state court judges during the times that the polls are open to assist in the enforcement of voting rights if necessary.
U.S. Attorney Delahanty said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.The voting franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Delahanty stated that DEOs Osborn and McCormack will be on duty in his office while the polls are open. They can be reached by the public at the following telephone numbers: (207) 771-3214 (AUSA Osborn) and (207) 262-4615 (AUSA McCormack).
The principal Maine FBI field office can be reached by the public at (207) 774-9322.
AAG Phyllis Gardiner may be contacted at the Attorney General’s Office by calling: (207) 626-8880. Deputy Secretary of State Flynn can be reached at (207) 624-7650. Attorney Zachary Heiden of the ACLU of Maine will be available at (207) 650-9535.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
United States Attorney Delahanty said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my office, the FBI, or the Civil Rights Division.”
Elyria man sentenced to more than four years in prison for mailing what he claimed was anthraxRead the Press Release
An Elyria man was sentenced to more than four years in prison for making threats with a white powdery substance, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio.
Drew D. Manns, 33, was sentenced to 51 months in prison. It will be served consecutively to his state prison sentence stemming from an arson.
Manns previously pleaded guilty to mailing threatening communications and related charges.
Manns sent Summit County Clerks and Prosecutor’s Office letters including a white powdery substance, and identified the substance as anthrax in the body of the accompanying letters, according to court documents.
The Summit County Prosecutor’s Office conducted the investigation. The case is being prosecuted by Assistant United States Attorney Marisa T. Darden.
Election Officer Will Be on Duty to Receive Complaints of Election Fraud, Voting Rights AbusesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that Assistant U.S. Attorney Patrick D. Daly will lead the efforts of her office in connection with the Justice Department’s nationwide election day program for the Nov. 8, 2016, general elections.
Daly has been appointed to serve as the District Election Officer for the Western District of Missouri, and in that capacity is responsible for overseeing the district’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department headquarters in Washington, D.C.
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The department’s long-standing election day program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
In order to respond to complaints of election fraud or voting rights abuses on Nov. 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, Daly will be on duty in this district while the polls are open. He can be reached by the public at 816-426-3000.
The FBI’s Kansas City Field Office will also have special agents available to receive allegations of election fraud, intimidation, suppression and other election abuses. The public can provide information regarding possible election crimes to the FBI’s Kansas City Field Office’s toll-free hotline, 1-855-527-2847, or email [email protected].
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, D.C., by phone at 1-800-253-3931 or 202-307-2767, by fax at 202-307-3961, by e-mail to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
District Elections Officer Selection for November 8, 2016Read the Press Release
HAMMOND- United States Attorney David Capp announced today that Assistant United States Attorney (AUSA) Gary T. Bell will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Bell has been appointed to serve as the District Election Officer (DEO) for the Northern District of Indiana, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Capp stated that AUSA/DEO Gary T. Bell will be on duty in this District while the polls are open. He can be reached by the public at the following telephone number 219-937-5656.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The Indiana FBI Field Office can be reached by the public 24 hours a day, 7 days a week at 317-595-4000.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
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District Election Officer on Duty for November 8, 2016Read the Press Release
United States Attorney Annette L. Hayes announced today that Assistant United States Attorney (AUSA) Arlen Storm will lead the Office’s work in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Storm is the District Election Officer (DEO) for the Western District of Washington, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with the Justice Department in Washington D.C.
United States Attorney Annette L. Hayes said, “Every citizen has the right to vote without interference or discrimination, and to have that vote counted without fraud in the electoral process. The Department of Justice will act promptly and aggressively to protect the integrity of the election.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals. It seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department to whom the public can report possible election fraud and voting rights violations while the election is ongoing.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts of intimidation or harassment. For example, actions designed to interrupt or intimidate voters by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The right to vote is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise be allowed to exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses including on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Annette L. Hayes stated that AUSA/DEO Storm is on duty while voting is ongoing in Western Washington. He can be reached by the public at the following telephone number: (253) 428-3807.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at (206) 622-0460.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, D.C. by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
It is imperative that anyone who has specific information about discrimination or election fraud provide that information in a timely manner to the U.S. Attorney’s Office, the FBI, or the Civil Rights Division.
Department of Justice Awards over $700,000 to Portland State University Law Enforcement and Justice InitiativesRead the Press Release
PORTLAND, Ore. – The Department of Justice (DOJ) has announced grant program awards in excess of $700,000 will be given to Portland State University (PSU) in support of four campus law enforcement and community justice initiatives. The awards recognize and support the work of both law enforcement and universities in developing new and innovative ways of administering justice programs on and off campus.
The funded programs vary in size, scope and subject matter. A $400,000 grant has been awarded by the DOJ Office on Violence Against Women (OVW) in support of a research partnership between PSU, the Center for Court Innovation, Multnomah County Family Court, and additional community partners. The goal of the project is to generate culturally responsive practices and policies related to procedural justice for survivors of domestic violence.
“We’re thrilled to be conducting one of the very first DOJ grant projects of this kind in the family court setting,” said Anna Rockhill, a senior research associate at PSU’s School of Social Work and co-principal investigator on the project. “We hope to deepen our understanding of the needs of a variety of different cultural and linguistic minority groups and turn those insights into concrete practice and policy recommendations.”
The DOJ Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART) will give $250,000 to PSU to expand an initiative aimed at reducing sexual violence on college campuses. The additional award will augment a three-year $750,000 award received in 2015-2016 to develop a "situation-based" prevention approach to address campus sexual assault.
In the first phase of the project, PSU College of Liberal Arts and Sciences psychology professor Keith L. Kaufman and co-investigator Sarah McMahon of Rutgers University will tailor Kaufman’s four-step “Situational Prevention Approach” to help identify and address risk factors that can lead to sexual assault. Phase one sites include PSU, Rutgers, and Portland Community College. In the second phase, they will use the resulting implementation manual to guide five additional campuses’ use of the approach and gather feedback to finalize it for national dissemination. The five phase two campuses are: Penn State University, Catholic University, Fairleigh Dickinson University, Northern Virginia Community College, and Linfield College. The new, supplemental award will allow for the inclusion of all five colleges and universities in the critical second phase of the development process.
“Having more campus participants will allow us to strengthen the Campus Situational Prevention Approach to more fully realize its potential to address campus sexual assault,” Kaufman said.
The National Institute of Justice (NIJ), the Justice Department’s lead research and evaluation organization, seeks to improve knowledge and understanding of crime and justice issues through science. NIJ has awarded PSU nearly $40,000 to support National Archive of Criminal Justice Data (NACJD) evaluation and analysis to help criminal justice agencies make informed decisions about the types of research programs they invest and participate in.
Finally, the PSU Campus Public Safety Office will receive $20,000 as part of the Justice Department’s Body-Worn Camera Program.
Each year, the Justice Department offers hundreds of funding opportunities to support law enforcement and public safety activities in state, local and tribal jurisdictions; to assist victims of crime; to provide training and technical assistance; to conduct research; and to implement programs that improve the criminal, civil, and juvenile justice systems. To learn more about DOJ grant opportunities, please visit: www.justice.gov/business/grants.
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About Portland State University
As Oregon's only urban public research university, Portland State offers tremendous opportunity to 29,000 students from all backgrounds. Our mission to "let knowledge serve the city" reflects our dedication to finding creative, sustainable solutions to local and global problems. Our location in the heart of Portland, one of America's most dynamic cities, gives our students unmatched access to career connections and an internationally acclaimed culture scene. U.S. News & World Report ranks us among the nation's top 10 most innovative universities.
Department of Justice and United States Attorney’s Office to Oversee November 2016 ElectionsRead the Press Release
KNOXVILLE, Tenn. - U.S. Attorney Nancy Stallard Harr announced today that Assistant U.S. Attorney (AUSA) Perry H. Piper will lead the efforts of her office in connection with the Justice Department’s nationwide Election Day Program for the upcoming Nov. 8, 2016, general elections. AUSA Piper has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Tennessee, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
U.S. Attorney Harr said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice (Department) has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Harr stated that AUSA/DEO Piper will be on duty in this District while the polls are open. He can be reached by the public at 423-385-1332.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at 865-544-0751.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
U.S. Attorney Harr said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my office, the FBI, or the Civil Rights Division.”
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Columbian Man Charged with Illegally Re-Entering United StatesRead the Press Release
PITTSBURGH – An individual found by the Allegheny County Police Department, with assistance from the Homeland Security Investigations and Immigration and Customs Enforcement, has been indicted by a federal grand jury in Pittsburgh on charges of Illegal Re-Entry into the United States after Deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named Jaime Mosqueda, a/k/a Jorge Collazo, 40, a native of Colombia.
According to the indictment, Mosqueda, an alien, who was removed from the United States by U.S. Immigration and Customs Enforcement on Dec. 19, 2011, by law enforcement authorities in Alexandria, LA, was found in Allegheny County on September 3, 2015.
The law provides for a maximum total sentence of up to twenty (20) years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
The Homeland Security Investigations, Immigration and Customs Enforcement, and Allegheny County Police Department conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Cedar Rapids Woman Sentenced to Federal Prison for Defrauding Elderly Couple Out of More than $100,000Read the Press Release
A woman who defrauded an elderly couple out of more than $100,000 was sentenced yesterday to nearly three years in federal prison.
Tea Lynette Ware, 37, from Cedar Rapids, Iowa, received the prison term after a June 9, 2016 guilty plea to two counts of mail fraud and one count of using a fictitious name in mail fraud.
At the plea hearing, and in a plea agreement, Ware admitted that from about September 2015 through February 2016, Ware participated in a scheme to defraud an elderly Illinois woman during which the victim was falsely told she had won a lottery and was entitled to large sums of money. The victim was also told the winnings or funds could be claimed only if she first mailed Ware money for purported taxes or fees. In truth, no such winnings existed and the calls were designed only to steal from the victim and her husband, a resident of a long-term care facility with dementia. Like many senior citizens in the United States, the couple received unsolicited telephone calls; they even changed their telephone number to avoid unsolicited calls, but such calls nonetheless resumed after they changed their phone number.
At sentencing, United States District Court Chief Judge Linda R. Reade called Ware’s behavior “despicable”, noting that she had preyed on her victims, who were vulnerable not only because they were elderly but also due to their mental health conditions. Further, the judge found Ware caused her victims a substantial financial hardship, as she “picked” her victims “clean.” The judge noted that, due to age and infirmity, the victims’ earning years were over, and their life savings were now depleted.
Ware was sentenced in Cedar Rapids to 33 months’ imprisonment. A special assessment of $300 was imposed, and she was ordered to make $108,100 in restitution to her victims. Further, Ware forfeited $40,000 that the government seized prior to Ware’s Indictment. Ware must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
“Whether abuse occurs in nursing homes or involves financial fraud schemes such as the one in which Ms. Ware participated, this office and the Elder Justice Task Force are committed to pursuing justice for the elderly,” said United States Attorney Kevin Techau. “We will continue to work with our partners to hold accountable those who seek to financially exploit the most vulnerable in our society. I wish to thank the Postal Inspection Service and the FBI for their hard work investigating this case.”
“The US Postal Inspection Service is committed to ensuring that these types of predatory schemes are investigated aggressively,” said U.S. Postal Inspector in Charge Craig Goldberg of the Denver Division, which covers multiple states including Iowa. “It is imperative that we continue to work with our partners to protect those vulnerable individuals in our society who unknowingly fall prey to these schemes. We cannot allow fraudsters to utilize the U.S. mail to further their schemes.”
In June, the United States Attorney’s Office for the Northern District of Iowa was selected as one of 10 districts in the nation to form an Elder Justice Task Force (http://go.usa.gov/cSngj). The task force was assembled to foster a collaborative working relationship among all levels of government officials, advocacy groups for the elderly and the disabled, and others charged with the care and protection for these vulnerable groups. The goals include ensuring the integrity of all government expenditures by eliminating fraud, waste, and abuse in health programs, and protecting some of the state’s most vulnerable citizens from harm, whether it occurs in nursing homes or other institutions or involves financial fraud schemes. To learn more about the Department of Justice’s Elder Justice Initiative, visit: https://www.justice.gov/elderjustice/
Ware was released on the bond previously set and is to surrender to the United States Marshal in Cedar Rapids on November 14, 2016. Thereafter she will be transferred to federal prison.
The case was prosecuted by Assistant United States Attorney Tim Vavricek and was investigated by the United States Postal Inspection Service and the Federal Bureau of Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-27-LRR.
Follow us on Twitter @USAO_NDIA.
California Man Sentenced on Federal Conspiracy Charges for Distributing Drugs via a Commercial Air CarrierRead the Press Release
St. Louis, MO – Francis Frost, Sante Fe Springs, CA, was sentenced to 10 years in prison on charges of conspiring to import and distribute methamphetamine and cocaine into the St. Louis area via the commercial airlines, and for conspiring to violate airport security requirements.
Two co-defendants, Poe Purcell and Chalamar Schultz Tuipelehake, have pled guilty to related charges and await sentencing later this year.
According to court documents, Purcell began working as an American Airlines Cargo Fleet Service Clerk at Los Angeles International Airport in 2001. During the course of the conspiracy, including the time period between February and May 2015, Tuipelehake arranged for California drug traffickers to transport illegal controlled substances from Los Angeles, California, on commercial airliners using Purcell’s position with the airlines to avoid detection and facilitate the transport. Frost’s role involved retrieving the suitcases containing the drugs and distributing the drugs.
This case was investigated by the Drug Enforcement Administration in St. Louis and Orange County, California, and the Federal Bureau of Investigation in St. Louis, Los Angeles and LAX Airport.
Best Choice Home Health Care Agency Inc. and Its Owner Agree to Pay $1.8 Million to Resolve False Claims Act Allegations That They Paid Kickbacks for Home Health Services ReferralsRead the Press Release
Best Choice Home Health Care Agency Inc. (Best Choice) and its owner, Reginald King, have agreed to pay $1.8 million to resolve allegations that Best Choice and King violated the False Claims Act by paying kickbacks for the referral of Medicaid-covered patients for home and community-based healthcare services from Best Choice. Best Choice is a home healthcare services provider based in Kansas City, Kansas. King is the owner and operator of Best Choice.
“The department will continue to hold accountable entities and individuals that engage in illegal kickback schemes for the referral of patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “It is critically important that we protect the integrity of government health care programs by ensuring that services are provided based on clinical considerations rather than the financial interests of those who refer patients for care.”
This settlement resolves allegations that from July 1, 2010, through Dec. 31, 2014, Best Choice submitted claims for home and community-based healthcare services to Medicaid that resulted from a kickback arrangement between King, on behalf of Best Choice and Christopher Thomas, who transported patients from their homes to healthcare facilities in Kansas City. Specifically, under this alleged arrangement, King paid Thomas $58,000 in kickbacks for new patients referred to Best Choice based on a formula which accounted for each hour of service that Best Choice billed to Medicaid.
“Fraud and abuse in Medicaid add costs without adding any value,” said Acting U.S. Attorney Tom Beall for the District of Kansas. “We fight fraud to help make health care more available and more affordable.”
The Medicaid Program is a jointly-funded federal and state program. Of the $1.8 million that King and Best Choice will pay under the settlement, the United States will receive $1,011,780 and the state of Kansas will receive $788,220.
The settlement resolves allegations originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Thomas, the recipient of the alleged kickbacks. The act permits private parties to sue on behalf of the United States for false claims for government funds and to receive a share of any recovery. The whistleblower reward in this case will be $43,178 which represents 10 percent of the federal share of the settlement, minus the amount that the relator received in kickbacks during the duration of the scheme.
The settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $31.6 billion through False Claims Act cases, with more than $19.2 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Kansas, the Department of Health and Human Services Office of Inspector General and the Kansas Medicaid Fraud Control Unit.
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The qui tam case is docketed as United States ex rel. Thomas v. Best Choice Home Health Care Agency, Inc., and Reginald King, No. 1:13-cv-2209 (D. Kan.).
Best Choice Home Health Care Agency Inc. Agrees to Pay $1.8 MillionRead the Press Release
WASHINGTON – Best Choice Home Health Care Agency Inc. (Best Choice) and its owner, Reginald King, have agreed to pay $1.8 million to resolve allegations that Best Choice and King violated the False Claims Act by paying kickbacks for the referral of Medicaid-covered patients for home and community-based healthcare services from Best Choice. Best Choice is a home healthcare services provider based in Kansas City, Kansas. King is the owner and operator of Best Choice.
“The department will continue to hold accountable entities and individuals that engage in illegal kickback schemes for the referral of patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “It is critically important that we protect the integrity of government health care programs by ensuring that services are provided based on clinical considerations rather than the financial interests of those who refer patients for care.”
This settlement resolves allegations that from July 1, 2010, through Dec. 31, 2014, Best Choice submitted claims for home and community-based healthcare services to Medicaid that resulted from a kickback arrangement between King, on behalf of Best Choice and Christopher Thomas, who transported patients from their homes to healthcare facilities in Kansas City. Specifically, under this alleged arrangement, King paid Thomas $58,000 in kickbacks for new patients referred to Best Choice based on a formula which accounted for each hour of service that Best Choice billed to Medicaid.
“Fraud and abuse in Medicaid add costs without adding any value,” said Acting U.S. Attorney Tom Beall for the District of Kansas. “We fight fraud to help make health care more available and more affordable.”
The Medicaid Program is a jointly-funded federal and state program. Of the $1.8 million that King and Best Choice will pay under the settlement, the United States will receive $1,011,780 and the state of Kansas will receive $788,220.
The settlement resolves allegations originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Thomas, the recipient of the alleged kickbacks. The act permits private parties to sue on behalf of the United States for false claims for government funds and to receive a share of any recovery. The whistleblower reward in this case will be $43,178 which represents 10 percent of the federal share of the settlement, minus the amount that the relator received in kickbacks during the duration of the scheme.
The settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $31.6 billion through False Claims Act cases, with more than $19.2 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Kansas, the Department of Health and Human Services Office of Inspector General and the Kansas Medicaid Fraud Control Unit.
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The qui tam case is docketed as United States ex rel. Thomas v. Best Choice Home Health Care Agency, Inc., and Reginald King, No. 1:13-cv-2209 (D. Kan.).
Best Choice Home Health Care Agency Inc. Agrees to Pay $1.8 MillionRead the Press Release
WASHINGTON – Best Choice Home Health Care Agency Inc. (Best Choice) and its owner, Reginald King, have agreed to pay $1.8 million to resolve allegations that Best Choice and King violated the False Claims Act by paying kickbacks for the referral of Medicaid-covered patients for home and community-based healthcare services from Best Choice. Best Choice is a home healthcare services provider based in Kansas City, Kansas. King is the owner and operator of Best Choice.
“The department will continue to hold accountable entities and individuals that engage in illegal kickback schemes for the referral of patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “It is critically important that we protect the integrity of government health care programs by ensuring that services are provided based on clinical considerations rather than the financial interests of those who refer patients for care.”
This settlement resolves allegations that from July 1, 2010, through Dec. 31, 2014, Best Choice submitted claims for home and community-based healthcare services to Medicaid that resulted from a kickback arrangement between King, on behalf of Best Choice and Christopher Thomas, who transported patients from their homes to healthcare facilities in Kansas City. Specifically, under this alleged arrangement, King paid Thomas $58,000 in kickbacks for new patients referred to Best Choice based on a formula which accounted for each hour of service that Best Choice billed to Medicaid.
“Fraud and abuse in Medicaid add costs without adding any value,” said Acting U.S. Attorney Tom Beall for the District of Kansas. “We fight fraud to help make health care more available and more affordable.”
The Medicaid Program is a jointly-funded federal and state program. Of the $1.8 million that King and Best Choice will pay under the settlement, the United States will receive $1,011,780 and the state of Kansas will receive $788,220.
The settlement resolves allegations originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Thomas, the recipient of the alleged kickbacks. The act permits private parties to sue on behalf of the United States for false claims for government funds and to receive a share of any recovery. The whistleblower reward in this case will be $43,178 which represents 10 percent of the federal share of the settlement, minus the amount that the relator received in kickbacks during the duration of the scheme.
The settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $31.6 billion through False Claims Act cases, with more than $19.2 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Kansas, the Department of Health and Human Services Office of Inspector General and the Kansas Medicaid Fraud Control Unit.
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The qui tam case is docketed as United States ex rel. Thomas v. Best Choice Home Health Care Agency, Inc., and Reginald King, No. 1:13-cv-2209 (D. Kan.).
Austin Businessman Sentenced to Federal Prison for Mail Fraud, Wire Fraud, Money Laundering, and False Tax ReturnsRead the Press Release
In Austin today, 49-year-old Sean James Hager was sentenced to 42 months in federal prison and ordered to pay more than $1,500,000 in restitution in connection with a scheme to defraud his employer and the Internal Revenue Service, announced United States Attorney Richard L. Durbin, Jr. and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge William Cotter.
On May 26, 2016, a federal jury found Hager guilty of three counts of assisting the preparation of false tax returns, two counts of mail fraud, two counts of wire fraud, and one count of money laundering. Evidence presented during trial revealed that, during 2008-2011, Hager was employed by Austin-based Velocity Electronics, where he was responsible for purchasing computer parts for resale to Dell. Unbeknownst to Velocity, Hager also operated Echt Electronics, a company through which Hager acquired computer parts and sold them to Velocity at a significant mark up. Evidence presented at trial showed that Hager earned more than $1 million in profits from Echt during 2008-2011. Evidence presented at trial also established that Hager failed to disclose to his tax return preparer the profit he earned through Echt. As a result, Hager’s income tax returns substantially understated his income and the amount of income tax he owed.
Today, United States District Judge Lee Yeakel sentenced Hager to 42 months in prison on each of the mail fraud, wire fraud, and money laundering counts, and 36 months in prison (the statutory maximum) on each of the three tax counts. All of the terms of imprisonment will run concurrently. Judge Yeakel also imposed a one-year term of supervised release on each of the tax counts, and a three-year term of supervised release on each of the other counts, with all of the terms of supervised release to begin upon Hager’s release from prison and run concurrently.
Judge Yeakel also ordered Hager to pay restitution of $1,164,161.92 to Velocity Electronics and restitution of $368,611.33 to the IRS.
“The sum of all parts on Sean Hager’s theft from his employer and cheating on his taxes is simple – guilty on all counts,” said William Cotter, IRS Criminal Investigation Special Agent in Charge. “Taxpayers deserve our vigilance in the investigation and prosecution of those who hide income and evade the payment of their fair share of taxes.”
This case was investigated by IRS-CI. Assistant United States Attorneys Elizabeth Cottingham, Alan Buie, and Daniel Castillo prosecuted this case on behalf of the Government.
Announcement by United States Attorney Michael Cotter Relating to Montana's November 2016 ElectionsRead the Press Release
United States Attorney for the District of Montana Michael Cotter announced today that Assistant United States Attorney (AUSA) Michael Lahr will lead the efforts of the Montana U.S. Attorney’s Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Lahr has been appointed to serve as the District Election Officer (DEO) for the District of Montana, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
United States Attorney Cotter said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting, may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
This franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Cotter stated that AUSA/DEO Lahr will be on duty in this District while the polls are open. He can be reached by the public at 406-457-5268.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The Helena FBI field office has designated Special Agent Mark Seyler, who can be reached by the public at 406-449-5182.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
United States Attorney Cotter said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”