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24 October 2016
Queens, New York Woman Convicted for Her Role in $60 Million Wire Fraud ConspiracyRead the Press Release
Erie, PA -After deliberating for little more than an hour, a federal jury has found Bola Peters guilty of one count of conspiracy to commit wire fraud, United States Attorney David J. Hickton announced today.
Peters, 44, of Queens, New York, was tried before United States District Judge David S. Cercone in Pittsburgh, Pennsylvania.
According to Assistant United States Attorney Christian A. Trabold, who prosecuted the case, the evidence presented at trial established that Peters maintained multiple bank accounts which were used as repositories for fraudulently obtained federal tax refunds. After the fraudulently obtained refunds were deposited into accounts under her control, Peters would remove the funds, keep a portion for herself and remit the remainder of the refunds back to her co-conspirators. Evidence presented at trial showed that Peters was in possession of numerous false identification documents. These documents matched the stolen identities listed on the fraudulent federal tax returns that generated the tax refunds deposited into the accounts Peters controlled. Other stolen identity documents found in Peters’ house matched the names on bank accounts Peters opened using stolen identities. Peters was also in possession of handwritten ledgers and lists containing hundreds of stolen identities which were used during the course of the conspiracy to file false federal tax returns.
Judge Cercone scheduled sentencing for March 3, 2017 at 11:30 a.m. The law provides for a total sentence of 20 years in prison, a maximum fine of $250,000 or twice the amount of loss to the victims, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court revoked Peters’ bond.
The Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation conducted the investigation that led to the prosecution of Peters.
Public Access Upheld on Popular Beaverhead-Deerlodge National Forest TrailRead the Press Release
HELENA – Judge Sam E. Haddon issued an order today finding that the United States Forest Service possesses an easement by prescription on behalf of itself and the public for use of Forest Service Trail No. 328, commonly known as the Indian Creek Trail, in the Madison Ranger District of the Beaverhead-Deerlodge National Forest. This popular trail provides public access into the Lee Metcalf Wilderness.
The order comes as a result of litigation filed against the U.S. Department of Agriculture under the Quiet Title Act. The Quiet Title Act allows the United States to be named as a defendant in a civil action “to adjudicate a disputed title to real property in which the United States claims an interest.” Under the terms of the Quiet Title Act, state law governs determinations of property ownership. Under Montana law, a public easement by prescription is established through at least five years of continuous and open use that is adverse (i.e. not by permission) to the interests of the underlying landowner. The Court found that ample precedent existed in Montana law to uphold a prescriptive right of access by the Forest Service and the public for the Indian Creek Trail, and that the right had been established no later than 1973.
The case arose in 2014, when Plaintiff Wonder Ranch, LLC, sued the United States under the Quiet Title Act. Wonder Ranch claimed that the trail, which traverses its 80-acre parcel east of Cameron, Montana, existed and was used by the public by gratuitous permission of the landowner, and that no public right of access existed.
The United States counter-sued, claiming that a prescriptive easement across Wonder Ranch for the public and the Forest Service to use the trail had been clearly established through many decades of stock, recreational, and commercial use. The Court conducted an eight-day bench trial in July and August of 2016. At trial, dozens of witnesses testified to recreational and administrative use of the trail over more than six decades.
In finding for the United States, the Court determined that of the more than 30 witnesses who testified to their use of the trail since 1968, when Plaintiff acquired its property, the vast majority used the trail without ever seeking Plaintiff’s permission. Judge Haddon noted that use of the trail had in fact long-predated Wonder Ranch’s ownership of the property, as evidenced by an 1888 USGS map depicting the trail, a 1940 Forest Service map designating the trail with its current administrative number of #328, and many years of grazing, outfitting, and crossing permits.
Ultimately, the Court found that the United States, on behalf of itself and the public, possesses a prescriptive easement across the Wonder Ranch property for all historical uses of the trail that occurred during the period of prescriptive use (i.e., beginning “no later than” 1968). Based on the Court’s order, such uses include trail maintenance, Forest Service inspection of hunting camps, hiking, horseback riding, and leading strings of pack animals, as well as other historic uses of the trail that regularly occurred during this period. The Court noted that the current location of the trail “has remained unchanged since before the statutory period of prescription” and therefore will become the officially recorded location of the public easement.
“Today’s ruling upholds an important historic route of access to one of the most beautiful parts of Montana, and in so doing vindicates a core Montana value: public access to public land,” said U.S. Attorney for the District of Montana Michael Cotter. “Hats off to the trial team and United States Forest Service staff for preserving the public’s access on a trail used historically by Native Americans, settlers, loggers, ranchers, commercial guides, and recreationists.”
“This federal court decision is an extraordinary win for the public in defending access to public lands all across our nation,” remarked Leanne Martin, the Forest Service Northern Regional Forester. “We will continue to strive to work with landowners regarding other instances of historic access across private lands. We so appreciate the US Attorney’s Office for their support in this case and that of the many people who care about this particular trail.”
This case was litigated by Assistant U.S. Attorneys Mark Smith, Leif Johnson, and Melissa Hornbein, with invaluable support from U.S. Forest Service counsel and staff, and members of the public who testified at trial.
Press Release by United States Attorney Relating to November 2016 ElectionsRead the Press Release
Anchorage, Alaska – United States Attorney Karen L. Loeffler announced today that Assistant United States Attorney (AUSA) Kelly Cavanaugh will lead the efforts of the United States Attorney’s Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Cavanaugh has been appointed to serve as the District Election Officer (DEO) for the District of Alaska, 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 Loeffler 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 Loeffler stated that AUSA/DEO Cavanaugh will be on duty in this District while the polls are open. He can be reached by the public at the following telephone number: (907) 271-5071.
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 (907) 276-4441.
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 Loeffler 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.”
President of Telexfree Pleads Guilty to Billion Dollar Pyramid SchemeRead the Press Release
BOSTON – The President of Telexfree, Inc., a pyramid scheme that was disguised as an internet telecom company, pleaded guilty in U.S. District Court in Worcester today.
Merrill, 55, of Ashland, pleaded guilty to one count of wire fraud conspiracy and eight counts of wire fraud. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Feb. 2, 2017. Merrill’s trial was scheduled to begin today.
“The pyramid scheme Mr. Merrill operated defrauded thousands of victims throughout Massachusetts, and in fact, around the world,” said United States Attorney Carmen M. Ortiz. “Mr. Merrill lined his pockets on the backs of hard working individuals who, in some cases, invested their entire savings. We hope today’s guilty plea brings some degree of justice to the many victims in this case.”
“The significance of a guilty plea in a case of this magnitude cannot be overstated,” said Special Agent in Charge Matthew Etre of Homeland Security Investigations Boston. “James Merrill is finally facing justice for his role in bilking more than $3 billion from innocent investors, in more than 240 countries around the world, for what amounted to little more than greed. HSI special agents will continue to aggressively investigate those who seek to profit by taking advantage of others.”
Between February 2012 and April 2014, Merrill was the President of TelexFree, Inc., which sold a “voice-over-internet-protocol” (VOIP) telephone service, similar to Skype, for which customers could sign up on a website maintained by TelexFree. TelexFree, however, was a pyramid scheme whereby all of the money TelexFree paid out came, not from sales of its product, but from new participants continuously paying TelexFree to sign up as “promoters” for the company.
TelexFree’s website prominently featured Merrill as the leader of the company and as an experienced businessman in the telecom field. As the website advertised at various times, participants paid $1,425 or $339 to sign up with TelexFree, after which they would be paid $100 per week or $20 per week to post classified ads every day on the internet. The company couched those payments in terms of “buying back” unused VOIP packages the participants were unable to sell, but the practical reality was that participants were guaranteed an annual return of over 200% on their money without having to sell anything. Among other things, emails showed Merrill’s awareness that the ad-posting was intended only to ensure that people visited TelexFree’s web site as opposed to generating actual retail sale of the VOIP product. Participants spent minutes a day cutting and pasting ads into various classified ad sites provided by TelexFree, which were already saturated with thousands of ads posted by earlier participants.
Participants were also given substantial financial incentives to recruit others to join the scheme. To receive bonuses for recruiting others, in theory each participant needed to have one VOIP customer. But in reality, participants met this requirement simply by buying the product themselves and, in 97% of instances, never using it. In this way, TelexFree created the illusion that it had hundreds of thousands of legitimate VOIP customers. On paper the company sold about 12.4 million VOIP plans, but in reality it had a minute number of legitimate customers, an even smaller number of which had actually paid money to TelexFree for the service. Overall, the nearly 2 million who participated in TelexFree made 96% of their compensation, not from selling the company’s VOIP service, but from ad-posting and recruiting others to join.
TelexFree derived only a fraction of its total revenue in a two-year period from sales of VOIP service – approximately 2%. The remaining 98% came from new people buying into the scheme. TelexFree could only pay the returns it had promised to its existing promoters by bringing in money from newly-recruited promoters.
Beginning in late 2012, involvement in TelexFree spread rapidly, and by April 2014, well over a million people worldwide had signed up with the company. This included over 20,000 people in Worcester, Mass. alone, and thousands more in Boston, Framingham, Chelsea and other communities statewide. Meanwhile, beginning in 2013, Merrill received increasingly frequent warnings that the company was a pyramid scheme. Beginning in August 2013, Merrill began to take steps to change how the company did business, but Merrill never alerted the public, even though over a million people signed up for TelexFree between that month and TelexFree’s collapse.
In December 2013, Merrill wired himself and two co-conspirators a total of $10 million from TelexFree accounts. On April 14, 2014, Telexfree filed for bankruptcy, at which point it owed approximately $5 billion to its participants, while having only about $120 million on hand (about 2% of what it owed). At that point, approximately 965,225 participants lost money in the scheme, with total losses of about $1,755,927,755. Overall, these victims came primarily from the United States (all 50 states), Brazil, China, Portugal, Peru, other Central and South American nations, Italy, and Russia, with smaller victim populations in dozens of other countries.
According to the terms of the plea agreement, Merrill will be sentenced to no more than 10 years in prison. Merrill also agreed to forfeit approximately $140 million, numerous real estate properties, luxury vehicles and boats. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz and HSI SAC Etre made the announcement today. The U.S. Attorney’s Office also received valuable assistance from the Federal Bureau of Investigation, the Brazilian Federal Police based in Vitoria, Brazil, the Securities & Exchange Commission, and the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts. Assistant U.S. Attorneys Andrew E. Lelling and Neil J. Gallagher, Jr., of Ortiz’s Economic Crimes Unit are prosecuting the case.
If you believe that you are a victim of the alleged TelexFree, Inc. scheme, please enter a claim for reimbursement on the following site: https://telexfreeclaims.com/
Pastor and Wife Indicted for $1.2 Million Fraud Targeting Church MembersRead the Press Release
ALEXANDRIA, Va. – The senior pastor of Victorious Life Church in Alexandria, along with his wife, were arrested yesterday for their alleged involvement in a $1.2 million fraud scheme that victimized members of their congregation.
Terry Wayne Millender, 52, his wife Brenda Millender, 56, both of Alexandria, and Grenetta Wells, 55, also of Alexandria, were indicted by a federal grand jury on October 20, on charges of conspiracy to commit wire fraud and money laundering conspiracy. The charges were unsealed today after Wells was arrested.
According to the indictment, the defendants operated a company called Micro-Enterprise Management Group (MEMG), a Virginia company that alleged to help poor people in developing countries by providing small, short-term loans to start or expand existing businesses by working with a network of established micro-finance institutions. Terry Millender and Brenda Millender were founding members of MEMG, while Terry Millender served as chief executive officer and Wells served as chief operating officer. The defendants recruited investors by emphasizing its Christian mission and use of the funds to help the poor, promising guaranteed rates of return, assuring investors that the loans’ principal was safe and backed by the assets of MEMG. The indictment alleges that these representations were false and fraudulent, and that the money was actually used by the defendants to conduct risky trading on the foreign exchange currency market, options trading, payments towards the purchase of a $1.75 million residence for Terry and Brenda Millender, and other personal expenses for the defendants. To conceal how they had actually used the money, the defendants are alleged to have falsely assured investors that they would get their money back and blamed delays in repaying investors on the 2008 financial crisis, among other things.
The defendants will make their initial appearances this afternoon at 2 p.m. at the federal courthouse in Alexandria in front of Magistrate Judge Theresa C. Buchanan.
Each defendant faces a maximum penalty of 20 years in prison, if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), and Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement. Assistant U.S. Attorney Katherine L. Wong is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-239.
Parmelee Man Indicted for Aggravated Sexual AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that a Parmalee, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Abuse.
Harlan Two Eagle, age 33, was indicted on October 12, 2016. He appeared before U.S. Magistrate Judge Mark Moreno on October 20, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $250,000 fine, 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Upon conviction, unless the Sentencing Court finds Two Eagle to be indigent, an additional mandatory special assessment of $5,000 will be imposed. Restitution may also be ordered.
The indictment alleges that on December 22, 2015, in Mission, South Dakota, Two Eagle knowingly engaged in, and attempted to engage in, a sexual act with the victim by the use of force.
The charge is merely an accusation and Two Eagle is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Carrie G. Sanderson is prosecuting the case.
Two Eagle was released to a third party custodian pending trial. A trial date has not been set.
Orange County Man Pleads Guilty to Flying Private Jet with Passengers Onboard Without Having Properly Issued FAA LicenseRead the Press Release
LOS ANGELES – An Irvine man pleaded guilty today in federal court to charges of illegally flying on two separate occasions turbo-jet powered aircraft with passengers onboard without having a valid license.
Arnold Gerald Leto III, 36, pleaded guilty to a two-count indictment that charged Leto with violations of a federal statute that prohibits the knowing piloting of an aircraft without having the requisite “airman certificate.”
According to his plea agreement, in January 2015, Leto piloted a Cessna Citation aircraft from Santa Monica to Phoenix, and, in April 2016, Leto piloted a Falcon 10 turbo-jet aircraft from Van Nuys Airport to Las Vegas. On both of those occasions, Leto piloted the aircraft with passengers onboard knowing that he did not have the requisite airman certificate to pilot that aircraft.
“Federal laws regarding the operation of passenger aircraft protect the public,” said United States Attorney Eileen M. Decker. “Today’s guilty pleas demonstrate that the defendant willfully disregarded the rules and regulations of the FAA and operated jet aircraft, thereby endangering the passengers on board and the safety of the communities of Santa Monica, Van Nuys, Las Vegas, Phoenix, and everywhere in between.”
Earlier this year, the FAA, after finding various violations of Federal aviation regulations, revoked all of Leto’s airman certificates.
“As evidenced by the guilty plea entered into today by Mr. Arnold Leto related to operating an aircraft without an airman’s certificate, we remain steadfast in our commitment to ensuring the safety of the nation’s air transportation system,” said William Swallow, DOT OIG regional Special Agent-in-Charge. “Working with the Federal Aviation Administration and our prosecutorial partners, we will continue to prevent and detect violations of federal laws and regulations designed to ensure public safety, and punish those who would seek to compromise that safety.”
Sentencing is set before United States District Judge Dale S. Fischer on February 6, 2017. At that time Leto faces a statutory maximum sentence of six years in federal prison.
This case was investigated by the Department of Transportation – Office of Inspector General, with assistance by the Federal Aviation Administration. The prosecution is being handled by Assistant United States Attorney Dennis Mitchell of the Environmental and Community Safety Crimes Section.
Omaha Woman to Federal Prison for Iowa Meth ConspiracyRead the Press Release
A woman who conspired to distribute methamphetamine was sentenced October 24, 2016, to 10 years in federal prison.
Elizabeth Lopez, 30, from Omaha, NE, received the prison term after a May 26, 2016, jury verdict finding her guilty of conspiracy to distribute methamphetamine and possession with intent to distribute methamphetamine.
Evidence at trial showed that Lopez conspired to distribute 50 grams or more of actual (pure) methamphetamine from 2015 through August 2015 in the Sioux City, Iowa area. The evidence also showed that on August 4, 2015, Lopez had traveled from Omaha, NE to Sioux City, IA to distribute approximately one ounce of actual (pure) methamphetamine. Lopez had hidden the methamphetamine in her bra.
Lopez was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Lopez was sentenced to 120 months’ imprisonment. A special assessment of $200 was imposed. She must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system. Lopez is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-4051. Follow us on Twitter @USAO_NDIA.
Okmulgee Man Pleads Guilty to Unregistered Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that BUDDY LYNN VISSER, age 56, of Okmulgee, Oklahoma, pled guilty to FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2) and 924(e)(1), punishable by not more than 10 years imprisonment, up to a $250,000 fine or both; and POSSESSION OF UNREGISTERED FIREARM (MACHINEGUN), in violation of Title 26, United States Code, Sections 5861(d), 5841 and 5871, punishable by not more than 10 years imprisonment, up to a $10,000 fine or both.
The Indictment alleged that on or about July 10, 2016, within the Eastern District of Oklahoma, VISSER, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm, which had been shipped and transported in interstate commerce.
The Indictment further alleged that on or about August 17, 2016, within the Eastern District of Oklahoma, VISSER did knowingly possess a machinegun, to wit: One (1) Seekins Precision, Model SP15; .223 caliber rifle, which is a firearm, as defined in Title 26, United States Code, Section 5845, not registered to him in the National Firearms Registration and Transfer Record.
Charges arose from an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
Assistant United States Attorney Dean Burris represented the United States.
Nursing Home Chain to Pay $5.3 Million to Resolve False Claims Act AllegationsRead the Press Release
DALLAS - Daybreak Partners, LLC, a holding company for a number of subsidiaries that operate and manage skilled nursing facilities throughout Texas, has agreed to pay $5,300,000.00 to resolve allegations that they billed Medicare and Medicaid for materially substandard nursing services. The skilled nursing facilities are operated as individual limited partnerships owned by Daybreak Venture, LLC and Daybreak Healthcare, Inc. (Daybreak). Daybreak denies the allegations. U.S. Attorney John Parker of the Northern District of Texas made the announcement today.
The settlement resolves allegations that between 2006 and 2010, some of the skilled nursing services provided at four nursing facilities Daybreak owned and managed (Deerings Nursing and Rehabilitation, L.P., Odessa, Texas; Mansfield Nursing and Rehabilitation, L.P., Mansfield, Texas; Marine Creek Nursing and Rehabilitation, L.P. Mineral Wells, Texas; and Mineral Wells Nursing and Rehabilitation, L.P., Mineral Wells, Texas) were materially substandard and/or worthless because Daybreak: (a) failed to follow appropriate fall protocols for several residents; (b) failed to follow appropriate pressure ulcer and infection control protocols for several residents; (c) failed to properly administer medications to several residents to avoid medication errors; (d) failed to follow doctors’ orders for several residents; (e) failed to provide appropriate mental health treatment to several residents; (f) failed to answer several residents’ call lights promptly; (g) failed to institute appropriate infection control measures for several residents; (h) failed to provide a habitable living environment, adequate equipment, and needed capital expenditures; and (i) failed to investigate and report serious incidents to appropriate authorities on several occasions.
“In addition to our responsibility to preserve federal tax dollars, we have a special obligation to protect the most vulnerable members of our community,” said U.S. Attorney Parker. “This settlement reflects our commitment to ensuring that medical providers for our ailing friends and family are not paid for substandard services.”
As part of the settlement, Daybreak entered into a Corporate Integrity Agreement with the Office of Inspector General for Health & Human Services (OIG) that requires an independent monitor and allows the OIG to oversee the quality of care provided at all of Daybreak’s skilled nursing facilities over the next five years. Daybreak cooperated throughout the course of the investigation.
This case was handled by Assistant U.S. Attorney Clay Mahaffey.
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November 2016 General ElectionRead the Press Release
United States Attorney Christopher A. Crofts announced today that Assistant United States Attorney (AUSA) Stephanie I. Sprecher 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 Sprecher has been appointed to serve as the District Election Officer (DEO) for the District of Wyoming 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 Crofts 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 Crofts stated that AUSA/DEO Sprecher will be on duty in this District while the polls are open. She can be reached by the public at the following telephone number: (307)261-5542.
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 (303)630-6916.
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 Crofts 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."
November 2016 ElectionsRead the Press Release
Tampa, FL - United States Attorney A. Lee Bentley, III announced today that Assistant United States Attorney (AUSA) Robert Mosakowski 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 Mosakowski has been appointed to serve as the District Election Officer (DEO) for the Middle District of Florida. In that capacity, he 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 Bentley said, “Every citizen should be free to vote without interference and to have his or her vote count, without the fear that it will be stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the electoral process.”
The Department of Justice plays 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 for the public to report possible violations 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. Such acts may include questioning, challenging, photographing, or videotaping voters at polling places, under the pretext of uncovering violations of federal voting rights laws. 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 November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Bentley stated that AUSA/DEO Mosakowski will be on duty in this District while the polls are open. Public complaints may be reported to him at (813) 274-6129.
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. Local FBI field offices can be reached by the public at either (813) 253-1000 (Tampa Division) or (904) 248-7000 (Jacksonville Division).
Complaints about possible violations of the federal voting rights laws also may be made directly to the Civil Rights Division’s Voting Section in Washington, DC either 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 www.justice.gov/crt/complaint/votintake.
“Ensuring free and fair elections depends, in large part, on the cooperation of the American public,” said U.S. Attorney Bentley. “It is imperative that anyone with specific information about discrimination or election fraud immediately contact my Office, the FBI, or the Civil Rights Division.”
Niagara Falls Man Sentenced for Being A Felon in Possession of A FirearmRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Josue Ortiz, 35, of Niagara Falls, NY, who was convicted of being a felon in possession of a firearm, was sentenced to time served and three years supervised release by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Michael J. Adler, who handled the case, stated that on December 23, 2015, the Niagara Falls Police Department was dispatched to a residence on Niagara Avenue. A resident living in the lower apartment told officers that she believed a resident living upstairs had a gun.
Officers went upstairs and made contact with the defendant through a closed door and asked Ortiz if he had a gun. The officers talked Ortiz into putting down the gun (a 12 gauge shotgun) and putting his hands up. Officers then placed the defendant in handcuffs and secured the gun.
Josue Ortiz served 10 years in state prison for the murders of Nelson and Miguel Camacho. His conviction was vacated by an Erie County Court judge based on the findings of another federal investigation.
The sentencing is the culmination of an investigation by the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Ashan M. Benedict, New York Field Division.
Life Care Centers of America, Inc. Agrees to Pay $145 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Rehabilitation CareRead the Press Release
KNOXVILLE, Tenn. – Cleveland, Tennessee-based Life Care Centers of America, Inc. (Life Care) and its owner, Forrest L. Preston, have agreed to pay $145 million to resolve a government lawsuit alleging that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary, and/or skilled, the Department of Justice announced today. This resolution is the largest settlement with a skilled nursing facility chain in the Department’s history, and the largest civil False Claims Act settlement in the Eastern District of Tennessee.
As part of this settlement, Life Care has also been required to enter into a five year chain-wide Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). Life Care owns and operates more than 220 skilled nursing facilities across the country.
“Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” said Nancy Stallard Harr, U.S. Attorney for the Eastern District of Tennessee. “We are committed to working with our federal partners to protect both.”
The settlement, which was based on the company’s ability to pay, resolves allegations that between January 1, 2006 and February 1, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings. Specifically, Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the highest reimbursement category for therapy irrespective of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy to many beneficiaries. Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued. Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period. The settlement also resolves allegations, brought in a separate lawsuit by the United States, that Forrest L. Preston, as the sole shareholder of Life Care, was unjustly enriched by Life Care’s fraudulent scheme.
“This resolution is the largest settlement with a skilled nursing facility chain in the Department’s history,” 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 rather than financial considerations.”
“The resolution announced today demonstrates the commitment of the U.S. Attorney’s Office to aggressively pursue providers who utilize fraudulent practices to knowingly put their own financial self-interest over a duty to patients,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “It is imperative that providers make healthcare decisions based upon a patient’s need for services rather than a self-serving desire to maximize financial profit. Our office will continue to investigate fraud allegations, in order to ensure that providers do not compromise the integrity of our public health care programs.”
“Therapy provided in skilled nursing facilities must be medically reasonable and necessary for the individual patient, and we will continue to vigorously investigate companies to prevent fraud and abuse,” said Inspector General Daniel R. Levinson for the U.S. Department of Health and Human Services. “The corporate integrity agreement with Life Care is designed to ensure that Life Care’s provision of therapy services in the future will be determined by the needs of its patients.”
U.S. Attorney Harr noted that the settlement with Life Care resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by Tammie Taylor and Glenda Martin, former employees of Life Care. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The government may intervene and file its own complaint in such a lawsuit, as it has done in this case. The relator share of the recovery in this matter is $29 million.
This 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. Over the same period of time, the U.S. Attorney’s Office for the Eastern District of Tennessee has recovered more than $90 million through False Claims Act cases, with more than $81 million of that amount recovered in cases involving fraud against federal health care programs.
U.S. Attorney Harr commended and expressed her deep appreciation for the dedication and diligence of the large team that handled this complex and lengthy investigation and litigation, including current and former attorneys, paralegals, investigators and support staff from the Department of Justice’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Offices for the Eastern District of Tennessee, the Southern District of Florida, the District of Colorado, the District of Massachusetts, the District of South Carolina, and the District of the District of Columbia; and HHS Office of Inspector General.
The two qui tam cases are docketed as United States ex rel. Taylor v. Life Care Centers of America, Inc., No. 1:12-cv-64 (E.D. Tenn) and United States ex rel. Martin v. Life Care Centers of America, Inc., No. 1:08-cv-251 (E.D. Tenn). The case against Forrest L. Preston is captioned United States v. Preston, No. 1:16-cv-113 (E.D. Tenn). The claims resolved by the settlement are allegations only; there has been no determination of liability.
###
Life Care Centers of America Inc. Agrees to Pay $145 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Rehabilitation Therapy ServicesRead the Press Release
Life Care Centers of America Inc. (Life Care) and its owner, Forrest L. Preston, have agreed to pay $145 million to resolve a government lawsuit alleging that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled, the Department of Justice announced today. Life Care, based in Cleveland, Tennessee, owns and operates more than 220 skilled nursing facilities across the country.
“This resolution is the largest settlement with a skilled nursing facility chain in the department’s history,” 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 rather than financial considerations.”
This settlement resolves allegations that between Jan. 1, 2006 and Feb. 28, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings. Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of their qualifying patients. The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, speech), one of which has to be provided five days a week.
The United States alleged in its complaint that Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level irrespective of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy to many beneficiaries. Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued. Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period. The settlement also resolves allegations brought in a separate lawsuit by the United States that Forrest L. Preston, as the sole shareholder of Life Care, was unjustly enriched by Life Care’s fraudulent scheme.
“Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” said U.S. Attorney Nancy Stallard Harr for the Eastern District of Tennessee. “We are committed to working with our federal partners to protect both.”
“The resolution announced today demonstrates the commitment of the U.S. Attorney’s Office to aggressively pursue providers who utilize fraudulent practices to knowingly put their own financial self-interest over a duty to patients,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “It is imperative that providers make healthcare decisions based upon a patient’s need for services rather than a self-serving desire to maximize financial profit. Our office will continue to investigate fraud allegations, in order to ensure that providers do not compromise the integrity of our public health care programs.”
As part of this settlement, Life Care has also entered into a five-year chain-wide Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
“Therapy provided in skilled nursing facilities must be medically reasonable and necessary, and we will continue to vigorously investigate companies that subject their residents to needless and unreasonable therapy,” said HHS Inspector General Daniel R. Levinson. “The corporate integrity agreement with Life Care is designed to ensure that it only provides therapy based on the individual needs of each resident.”
The settlement, which was based on the company’s ability to pay, resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by Tammie Taylor and Glenda Martin, former Life Care employees. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The government may intervene and file its own complaint in such a lawsuit, as it has done in this case. The whistleblower reward in this case will be $29 million.
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. Attorneys’ Offices for the Eastern District of Tennessee and the Southern District of Florida, and the HHS-OIG, with assistance from the U.S. Attorneys’ Offices for the District of Colorado, the Middle District of Florida, the Northern District of Georgia, the District of Massachusetts and the District of South Carolina and NCI/AdvanceMed, a Medicare Zone Program Integrity Contractor.
The two qui tam cases are docketed as United States ex rel. Taylor v. Life Care Centers of America, Inc., No. 1:12-cv-64 (E.D. Tenn) and United States ex rel. Martin v. Life Care Centers of America, Inc., No. 1:08-cv-251 (E.D. Tenn). The case against Forrest L. Preston is captioned United States v. Preston, No. 1:16-cv-113 (E.D. Tenn). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Life Care Centers of America Inc. Agrees to Pay $145 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Rehabilitation Therapy ServicesRead the Press Release
Contact: Office of Public Affairs (202) 514-2007
WASHINGTON – Life Care Centers of America Inc. (Life Care) and its owner, Forrest L. Preston, have agreed to pay $145 million to resolve a government lawsuit alleging that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled, the Department of Justice announced today. Life Care, based in Cleveland, Tennessee, owns and operates more than 220 skilled nursing facilities across the country.
“This resolution is the largest settlement with a skilled nursing facility chain in the department’s history,” 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 rather than financial considerations.”
This settlement resolves allegations that between Jan. 1, 2006 and Feb. 28, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings. Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of their qualifying patients. The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, speech), one of which has to be provided five days a week.
The United States alleged in its complaint that Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level irrespective of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy to many beneficiaries. Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued. Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period. The settlement also resolves allegations brought in a separate lawsuit by the United States that Forrest L. Preston, as the sole shareholder of Life Care, was unjustly enriched by Life Care’s fraudulent scheme.
“Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” said U.S. Attorney Nancy Stallard Harr for the Eastern District of Tennessee. “We are committed to working with our federal partners to protect both.”
“The resolution announced today demonstrates the commitment of the U.S. Attorney’s Office to aggressively pursue providers who utilize fraudulent practices to knowingly put their own financial self-interest over a duty to patients,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “It is imperative that providers make healthcare decisions based upon a patient’s need for services rather than a self-serving desire to maximize financial profit. Our office will continue to investigate fraud allegations, in order to ensure that providers do not compromise the integrity of our public health care programs.”
As part of this settlement, Life Care has also entered into a five-year chain-wide Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
“Therapy provided in skilled nursing facilities must be medically reasonable and necessary, and we will continue to vigorously investigate companies that subject their residents to needless and unreasonable therapy,” said HHS Inspector General Daniel R. Levinson. “The corporate integrity agreement with Life Care is designed to ensure that it only provides therapy based on the individual needs of each resident.
The settlement, which was based on the company’s ability to pay, resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by Tammie Taylor and Glenda Martin, former Life Care employees. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The government may intervene and file its own complaint in such a lawsuit, as it has done in this case. The whistleblower reward in this case will be $29 million.
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. Attorneys’ Offices for the Eastern District of Tennessee and the Southern District of Florida, and the HHS-OIG, with assistance from the U.S. Attorneys’ Offices for the District of Colorado, the Middle District of Florida, the Northern District of Georgia, the District of Massachusetts and the District of South Carolina and NCI/AdvanceMed, a Medicare Zone Program Integrity Contractor.
The two qui tam cases are docketed as United States ex rel. Taylor v. Life Care Centers of America, Inc., No. 1:12-cv-64 (E.D. Tenn) and United States ex rel. Martin v. Life Care Centers of America, Inc., No. 1:08-cv-251 (E.D. Tenn). The case against Forrest L. Preston is captioned United States v. Preston, No. 1:16-cv-113 (E.D. Tenn). The claims resolved by the settlement are allegations only; there has been no determination of liability.# # #
16-1239
DO NOT REPLY TO THIS MESSAGE. IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE OFFICE OF PUBLIC AFFAIRS AT 202-514-2007.
Life Care Centers of America Inc. Agrees to Pay $145 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Rehabilitation Therapy ServicesRead the Press Release
Tampa, FL - Life Care Centers of America Inc. (Life Care) and its owner, Forrest L. Preston, have agreed to pay $145 million to resolve a government lawsuit alleging that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled, the Department of Justice announced today. Life Care, based in Cleveland, Tennessee, owns and operates more than 220 skilled nursing facilities across the country, including the Middle District of Florida.
“This resolution is the largest settlement with a skilled nursing facility chain in the department’s history,” 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 rather than financial considerations.”
This settlement resolves allegations that between Jan. 1, 2006 and Feb. 28, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings. Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of their qualifying patients. The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, speech), one of which has to be provided five days a week.
The United States alleged in its complaint that Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level irrespective of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy to many beneficiaries. Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued. Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period. The settlement also resolves allegations brought in a separate lawsuit by the United States that Forrest L. Preston, as the sole shareholder of Life Care, was unjustly enriched by Life Care’s fraudulent scheme.
As part of this settlement, Life Care has also entered into a five-year chain-wide Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
“This settlement addresses troubling conduct by a nationwide provider of rehabilitation services,” said United States Attorney A. Lee Bentley, III. “We will not tolerate this kind of fraud and abuse in skilled nursing facilities in our district.”
“Therapy provided in skilled nursing facilities must be medically reasonable and necessary, and we will continue to vigorously investigate companies that subject their residents to needless and unreasonable therapy,” said HHS Inspector General Daniel R. Levinson. “The corporate integrity agreement with Life Care is designed to ensure that it only provides therapy based on the individual needs of each resident.”
The settlement, which was based on the company’s ability to pay, resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by Tammie Taylor and Glenda Martin, former Life Care employees. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The government may intervene and file its own complaint in such a lawsuit, as it has done in this case. The whistleblower reward in this case will be $29 million.
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. Attorneys’ Offices for the Eastern District of Tennessee and the Southern District of Florida, and the HHS-OIG, with assistance from the U.S. Attorneys’ Offices for the District of Colorado, the Middle District of Florida, the Northern District of Georgia, the District of Massachusetts and the District of South Carolina and NCI/AdvanceMed, a Medicare Zone Program Integrity Contractor. In the Middle District of Florida, Assistant United States Attorneys Randy Harwell and Michael Kenneth assisted with the case.
The two qui tam cases are docketed as United States ex rel. Taylor v. Life Care Centers of America, Inc., No. 1:12-cv-64 (E.D. Tenn) and United States ex rel. Martin v. Life Care Centers of America, Inc., No. 1:08-cv-251 (E.D. Tenn). The case against Forrest L. Preston is captioned United States v. Preston, No. 1:16-cv-113 (E.D. Tenn). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Licensed Occupational Therapist Pleads Guilty to $2.6 Million Medicare Fraud ConspiracyRead the Press Release
A licensed occupational therapist pleaded guilty today in Los Angeles for his role in a $2.6 million Medicare fraud scheme that involved billing for occupational therapy services that were not provided.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California and Special Agent in Charge Christian Schrank of the U.S. Department of Health and Human Services-Office of the Inspector General’s (HHS-OIG) Los Angeles Region made the announcement.
Keith Canlapan, 38, of West Covina, California, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge George H. Wu of the Central District of California. Sentencing is scheduled for Feb. 16, 2017, before Judge Wu.
As part of his guilty plea, Canlapan admitted that he was a licensed occupational therapist employed with JH Physical Therapy, an occupational therapy clinic located in Walnut, California. Canlapan further admitted that through JH Physical Therapy, he billed Medicare for occupational therapy services when no such services were provided to the Medicare beneficiaries. Instead, the Medicare beneficiaries received massage and acupuncture services, which are not reimbursable under Medicare rules, he admitted. In fact, on dates that Canlapan purportedly provided occupational services to Medicare beneficiaries at JH Physical Therapy, Canlapan was admittedly not present at JH Physical and instead was either out of the country or at his other places of employment on some of those dates.
Between approximately October 2009 and approximately December 2012, Canlapan, through JH Physical Therapy, billed Medicare $2,669,618 in false and fraudulent claims, of which Medicare paid $1,860,786, he admitted.
Canlapan was charged in an indictment returned on June 16, 2016, along with co-defendants Simon Hong, 54, and Grace Hong, 50, husband and wife, both of Brea, California. Simon Hong is the owner and Grace Hong is the co-operator of JH Physical Therapy, and they are charged with one count of conspiracy to commit health care fraud and three counts of health care fraud. Both are pending trial, which is scheduled for Jan. 17, 2017. An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Co-conspirator Roderick Belmonte Concepcion, a licensed occupational therapist, was also previously indicted in a separate related case and pleaded guilty in April 2016. His sentencing is scheduled for Jan. 23, 2017.
The case was investigated by the Los Angeles Region of HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case is being prosecuted by Trial Attorney Blanca Quintero of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,900 defendants who collectively have billed the Medicare program for over $10 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Lexington, N.C. Physician Pleads Guilty to Unlawful Distribution of FentanylRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced that James Randall Long, MD, 56, of Lexington, N.C., appeared before U.S. Magistrate Judge David S. Cayer and pleaded guilty to unlawful distribution of Fentanyl, a Schedule II controlled substance. Dr. Long admitted today in court that he prescribed the drug outside the scope of his professional practice to a woman with whom he was romantically involved, knowing that she was abusing the drug to further her addiction to opiates.
U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Jim Schandevel, Special Agent in Charge of the North Carolina State Bureau of Investigation’s Western District Office; and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department.
Fentanyl is a powerful opioid drug typically prescribed by doctors to help patients manage chronic pain symptoms. Those addicted to opiates often turn to Fentanyl for its intense euphoric effects and commonly rely on the drug as a substitute for heroin. Fentanyl is significantly more potent than heroin with potentially fatal side effects.
“Dr. Long admitted he abused the public trust placed in him as a physician authorized to dispense controlled substances and misused his medical license to prescribe a potentially lethal drug to a woman he knew had a substance abuse problem. As opioid addiction is becoming the number one cause of drug overdose deaths in the United States, my office is committed to investigating and prosecuting those who serve as sources of supply. From the street corner to a doctor’s office, anyone who distributes these potentially deadly substances poses a significant threat to public health safety and is subject to investigation and prosecution,” said U.S. Attorney Rose.
According to court records and filed plea documents, Dr. Long admitted that shortly after meeting the woman in 2014 and until July 2015, he provided her prescriptions for Fentanyl outside the scope of his professional practice and not for a legitimate medical purpose. Dr. Long also admitted he knew the woman was not using the drug according to its prescribed use but was instead abusing it to further her addiction. Dr. Long further admitted that during that time, he wrote and authorized Fentanyl prescriptions in the woman’s name and in the name of several other individuals, some of whom were not patients of Dr. Long and did not know prescriptions were being filled in their name.
Dr. Long pleaded guilty to distribution and possession with intent to distribute Fentanyl by an authorized registrant outside the scope of professional practice and not for a legitimate medical purpose. He was released on bond following today’s plea hearing. The penalty for the charge carries a maximum prison term of twenty years and a $1,000,000 fine.
The investigation was led by DEA with assistance from CMPD and SBI. U.S. Attorney Rose thanked the Mint Hill Police Department and the Gastonia Police Department for their help in the investigation.
Assistant U.S. Attorney William M. Miller of the U.S. Attorney’s Office in Charlotte is prosecuting the case.
Life Care Centers of America INC. Agrees to Pay $145 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Rehabilitation Therapy ServicesRead the Press Release
WASHINGTON – Life Care Centers of America Inc. (Life Care) and its owner, Forrest L. Preston, have agreed to pay $145 million to resolve a government lawsuit alleging that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled, the Department of Justice announced today. Life Care, based in Cleveland, Tennessee, owns and operates more than 220 skilled nursing facilities across the country.
“This resolution is the largest settlement with a skilled nursing facility chain in the department’s history,” 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 rather than financial considerations.”
This settlement resolves allegations that between Jan. 1, 2006 and Feb. 28, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings. Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of their qualifying patients. The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, speech), one of which has to be provided five days a week.
The United States alleged in its complaint that Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level irrespective of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy to many beneficiaries. Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued. Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period. The settlement also resolves allegations brought in a separate lawsuit by the United States that Forrest L. Preston, as the sole shareholder of Life Care, was unjustly enriched by Life Care’s fraudulent scheme.
“Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” said U.S. Attorney Nancy Stallard Harr for the Eastern District of Tennessee. “We are committed to working with our federal partners to protect both.”
“The resolution announced today demonstrates the commitment of the U.S. Attorney’s Office to aggressively pursue providers who utilize fraudulent practices to knowingly put their own financial self-interest over a duty to patients,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “It is imperative that providers make healthcare decisions based upon a patient’s need for services rather than a self-serving desire to maximize financial profit. Our office will continue to investigate fraud allegations, in order to ensure that providers do not compromise the integrity of our public health care programs.”
As part of this settlement, Life Care has also entered into a five-year chain-wide Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
“Therapy provided in skilled nursing facilities must be medically reasonable and necessary, and we will continue to vigorously investigate companies that subject their residents to needless and unreasonable therapy,” said HHS Inspector General Daniel R. Levinson. “The corporate integrity agreement with Life Care is designed to ensure that it only provides therapy based on the individual needs of each resident.”
The settlement, which was based on the company’s ability to pay, resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by Tammie Taylor and Glenda Martin, former Life Care employees. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The government may intervene and file its own complaint in such a lawsuit, as it has done in this case. The whistleblower reward in this case will be $29 million.
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. Attorneys’ Offices for the Eastern District of Tennessee and the Southern District of Florida, and the HHS-OIG, with assistance from the U.S. Attorneys’ Offices for the District of Colorado, the Middle District of Florida, the Northern District of Georgia, the District of Massachusetts and the District of South Carolina and NCI/AdvanceMed, a Medicare Zone Program Integrity Contractor.
The two qui tam cases are docketed as United States ex rel. Taylor v. Life Care Centers of America, Inc., No. 1:12-cv-64 (E.D. Tenn) and United States ex rel. Martin v. Life Care Centers of America, Inc., No. 1:08-cv-251 (E.D. Tenn). The case against Forrest L. Preston is captioned United States v. Preston, No. 1:16-cv-113 (E.D. Tenn). The claims resolved by the settlement are allegations only; there has been no determination of liability.
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Justice Department Announces Election Day Program in Shelby CountyRead the Press Release
Memphis, TN – U.S. Attorney Edward L. Stanton III announced today that Assistant United States Attorney (AUSA) Reagan M. Taylor 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 Taylor has been appointed to serve as the District Election Officer (DEO) for the Western 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 Stanton 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, U.S. Attorney Stanton stated that AUSA Taylor will be on duty in this District while the polls are open. She can be reached by the public at the following telephone number: (901) 544-4231.
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 (901) 747-4300.
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.
"Ensuring free and fair elections depends in large part on the cooperation of the American electorate," U.S. Attorney Stanton said. "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."
Integrity Initiative for November 2016 ElectionsRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas and Kenneth Elser, United States Attorney for the Western District of Arkansas announced today that an Assistant United States Attorney (AUSA) will lead the efforts of their offices in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Hunter Bridges has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Arkansas, and AUSA Denis Dean has been appointed toserve as the DEO for the Western District of Arkansas, 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.
In a joint statement, United States Attorneys Thyer and Elser 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 providesthat 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, both United States Attorneys stated that the designated AUSA/DEO will be on duty in this District while the polls are open. He can be reached by the public at the following telephone numbers: 479-783-5125 for the Western District of Arkansas and 501-340-2600 for the Eastern District of Arkansas.
United States Attorneys Thyer and Elser 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."
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 501-221-9100.
Complaints about ballot access problems or discrimination can be made directly to the Civil Rights Division’s Voting Section in Washington at 1-800-253-3931 or (202) 307-2767.
Imposter Attorney, 2 Others Arrested in Immigration Fraud ScamRead the Press Release
LOS ANGELES — An Inland Empire man who allegedly posed as an immigration attorney and two female accomplices face a federal indictment charging them with operating an immigration fraud scheme in which they created phony employment visas and other bogus documents for foreign nationals who were seeking a way to remain in the United States legally.
Alexander Smirnoff, who also went by the name “Alex Scott,” 48, and his “legal assistants” – Ekaterina Vladimirovna Zamurueva, 28, and Anna Kirillovna Solodovnikova, 29 – were arrested late last week by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) at the residence they share in Corona.
The three defendants were charged in a 16-count indictment returned by a federal grand jury on August 16. The indictment, which was unsealed following the defendants’ arrests, charges them with conspiracy, visa fraud, wire fraud, aggravated identity theft and identification fraud.
The trio was arraigned on the indictment Friday afternoon in United States District Court in Los Angeles. At the arraignment, United States Magistrate Judge Karen L. Stevenson ordered Smirnoff released on a $50,000 appearance bond subject to electronic monitoring and restriction to his residence and both Zamurueva and Soldovnikova detained without bail. Trial in the matter was scheduled for December 13.
According to court documents, Smirnoff and the two women told prospective clients they operated a consulting firm called ABC Flex, which purported to offer “legal support” to foreign nationals wanting to obtain immigration benefits that would enable them to stay in the U.S. For fees as high as $8,000, the services offered by the defendants allegedly included creating phony employment visas, which they told clients were genuine.
Investigators determined that the recipients of those “visas,” many of whom originally came to the U.S. as students, did not realize the documentation was fake until HSI special agents contacted them for overstaying their original expired student visas. In one instance, a foreign national ABC Flex client did not become aware her documentation was forged until she was denied entry upon returning to the U.S. from a trip to Nepal to teach English. She told investigators she frantically contacted the defendants, who said they would remedy the situation, but then stopped responding to her inquiries.
“The indictment in this case charges the defendants with victimizing both the United States and dozens of immigrants who thought they were properly obtaining authorization to remain in the United States legally,” said United States Attorney Eileen M. Decker. “The crimes charged in the indictment undermine our immigration system and harm individual victims both by stealing their hard-earned money and by placing them in very serious immigration situations.”
The indictment alleges that as part of the scheme the defendants furnished their foreign national clients with forged letters purportedly issued by U.S. Citizenship and Immigration Services (USCIS) and I-94 Arrival/Departure Records that falsely appeared to give the recipients permission to remain in the U.S. legally. The documents bore the Department of Homeland Security seal and appeared to be on official USCIS letterhead.
Additionally, the indictment alleges the defendants provided some of their clients with what they purported were valid Social Security numbers, when in fact the numbers either belonged to someone else or were invalid.
“As this case makes clear, HSI will move aggressively to target those who hold themselves out as legitimate immigration attorneys and greedily exploit their clients’ trust,” said Edward Owens, acting special agent in charge for HSI Los Angeles. “In this instance, as is often the case, most of the victims didn’t realize their trust was misplaced until it was too late.”
To date, investigators have located and interviewed approximately a dozen individuals who sought immigration services from the defendants, but authorities believe there may be more than 100 still unidentified, unwitting victims. Investigators are asking anyone who may have information related to the case to call HSI’s 24-hour tip line or contact the investigators using HSI’s online tip form.
HSI has received significant assistance with the case from officers assigned to U.S. Citizenship and Immigration Services (USCIS) Fraud Detection and National Security Directorate (FDNS). FDNS’ mission is to detect and deter immigration benefit fraud, which enhances the overall integrity and security of the nation’s legal immigration system. The Los Angeles Sheriff’s Department’s High-Tech Task Force Identity Theft Detail also provided substantial support for the investigation.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If they are convicted of the charges in the indictment, each defendant would face a statutory maximum sentence of 189 years in federal prison and a mandatory minimum sentence of two years in federal prison.
This case is being prosecuted by Special Assistant United States Attorney Anwer Khan.
Georgia Doctor Sentenced to Prison for Health Care FraudRead the Press Release
ATLANTA – Robert E. Windsor, an Atlanta-area physician, has been sentenced to federal prison for filing over $1.1 million in false claims for surgical monitoring services that he did not perform.
“Patients rightly expect that their physicians will protect their health and safety,” said U.S. Attorney John A. Horn. “Windsor violated that basic trust and placed numerous surgery patients at risk at a time when they were most vulnerable and in need of care. For over three years, he claimed that he had monitored the neurological health of patients during surgery when he actually had an unqualified medical assistant do the work. Windsor then billed health insurers over $1 million for the services he never performed.”
“It is incomprehensible the lengths that some people will go to defraud our health care system,” said George Crouch, Assistant Special Agent in Charge, FBI Atlanta. “But even more reprehensible is the willingness of health care providers like Dr. Windsor, to thoughtlessly put patients’ health at risk to profit from the system.”
“In my many years of investigating health care fraud, Dr. Windsor’s utter disregard for patient safety and his extreme greed stand out. His arrogance in billing for fraudulent services performed by an unqualified employee on patients undergoing surgery is truly shocking,” said Derrick L. Jackson, Special Agent in Charge for the HHS Office of Inspector General. “Our agents, working with our law enforcement partners, strive to protect the well-being of patients and the government health programs designed to serve them.”
“This sentencing highlights the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense (DoD) health care program,” said Special Agent in Charge John F. Khin, Southeast Field Office. “DCIS aggressively investigates health care providers that defraud the DoD, to preserve American taxpayer dollars intended to care for our Warfighters, their family members, and military retirees.”
According to U.S. Attorney Horn, the charges and other information presented in court: Robert E. Windsor, a licensed Georgia physician, entered into a contract with American Neuromonitoring Associates, P.C. (ANA), a Maryland corporation, to provide a medical service called intra-operative monitoring. During this medical procedure, a physician monitors a patient’s nerve and spinal cord activity during surgery to reduce potential adverse effects to the patient. The monitoring physician observes the surgery online and communicates with the surgeon in the operating room who is performing the surgery.
Windsor was responsible for providing a monitoring report at the conclusion of each surgery, and ANA and its sister company would then bill patients and health insurance companies for the monitoring. Windsor was paid a fee for each surgery monitored.
Between January 2010 through July 2013, Windsor had an unqualified medical assistant monitor surgeries for him, using Windsor’s log-in credentials to make it appear as if he was monitoring the surgeries when he was not. The medical assistant was not a doctor and was not permitted to perform the monitoring services. Windsor submitted monitoring reports falsely stating that he had conducted the monitoring, which ANA and its sister company relied on in billing health insurers for his services. On several occasions, Windsor billed ANA for monitoring services he supposedly performed when he was actually on a plane traveling internationally.
In total, after collecting reimbursements from insurers, ANA paid Windsor over $1.1 million for monitoring services he did not perform. Investigators uncovered Windsor’s fraud through analysis of Medicare billing data and complaints to the HHS-OIG Hotline at 800-HHS-TIPS.
Robert E. Windsor, 55, of Cumming, Georgia, was sentenced by U.S. District Court Judge Amy Totenberg to three years, two months in prison and three years of supervised release. He was ordered to serve 200 hours of community service, and to pay $1,169,580 in restitution to health insurers.
This case was investigated by the Federal Bureau of Investigation; the Department of Defense, Defense Criminal Investigative Service; and the Department of Health and Human Services, Office of the Inspector General.
Assistant United States Attorneys Stephen H. McClain and Nathan P. Kitchens prosecuted the case. Former Assistant United States Attorney Jamie L. Mickelson prosecuted the case prior to Windsor’s guilty plea.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Ft. Thompson Man Charged with Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Randolph J. Seiler announced that a Ft. Thompson, South Dakota, man has been indicted by a federal grand jury for Assault Resulting in Serious Bodily Injury.
Conrad James Medicine Crow, age 44, was indicted on October 12, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on October 18, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that On August 16, 2016, Medicine Crow unlawfully assault the victim by running her over with his vehicle, and as a result the victim suffered serious bodily injury.
The charge is merely an accusation and Medicine Crow is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Medicine Crow was released on bond pending trial. A trial date has not been set.
Four sentenced for distribution of heroin, cocaineRead the Press Release
CLARKSBURG, WEST VIRGINIA – Four individuals were sentenced in federal court today for distribution of heroin and cocaine charges, United States Attorney William J. Ihlenfeld, II, announced.
Michaelo Merone, 30, of Westover, West Virginia, was sentenced to 50 months in prison for one count of “Distribution of Heroin.” Merone was discovered in possession of heroin in October 2015 in Monongalia County, West Virginia.
Bertha Horton, 56, of Fairmont, West Virginia, was sentenced to 36 months in prison from one count of “Distribution of Cocaine Base Within 1,000 Feet of a Protected Location.” Horton sold cocaine in May 2014 near East Fairmont Junior High School in Marion County, West Virginia.
Darrin Lawrence Broadnax, 49, of Detroit, Michigan, was sentenced to 27 months in prison for one count of “Distribution of Heroin Within 1,000 Feet of a Protected Location.” Broadnax sold heroin in January 2015 near an elementary school in Monongalia County, West Virginia after transporting the heroin from Michigan.
Raimonte Gaston, 23, of Pittsburgh, Pennsylvania, was sentenced to 15 months in prison from one count of “Distribution of Heroin.” Gaston was discovered in possession of heroin in Harrison County, West Virginia.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the Merone, Horton, and the Broadnax cases and Assistant U.S. Attorney Shawn M. Adkins and Stephen D. Warner prosecuted the Gaston case on behalf of the government. The Mon Metro Drug Task Force investigated the Merone and Broadnax cases; the Three Rivers Drug Task Force investigated the Horton case; and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated the Gaston case.
U.S. District Judge Irene M. Keeley presided.
Fort Thompson Woman Indicted for LarcenyRead the Press Release
United States Attorney Randolph J. Seiler announced that a Fort Thompson, South Dakota, woman has been indicted by a federal grand jury for Larceny.
Tally Colombe, age 41, was indicted on October 12, 2016. She appeared before U.S. Magistrate Judge Mark Moreno on October 18, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Colombe stealing funds belonging to Hunkpati Investments. The charge is merely an accusation and Colombe is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigations and the United States Attorney’s Office. Assistant U.S. Attorney Carrie G. Sanderson is prosecuting the case.
Colombe was released pending trial. A trial date has been set for Tuesday, December 13, 2016.
Fort Gibson Man Pleads Guilty to Theft in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that JIMMY DEWAYNE WHEAT, age 39, of Fort Gibson, Oklahoma, pled guilty to EMBEZZLEMENT AND THEFT IN INDIAN COUNTRY, in violation of Title 18, United States Code, Sections 661 and 1152, punishable by up to 1 year imprisonment, and up to a $100,000 fine.
The Information alleged that on or about December 7, 2015, in the Eastern District of Oklahoma, within Indian Country, the defendant, JIMMY DEWAYNE WHEAT, a non-Indian, did take and carry away, with the intent to steal and purloin, an air compressor, a hammer, a roofing hammer, bottle jacks, ten screwdrivers, two nail bars and gloves, with a value less than $1000.00, which were the personal property of a Native American Indian.
Charges arose from an investigation by the Creek Nation Lighthorse Police Department and the Federal Bureau of Investigation.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion.
Special Assistant United States Attorney Shelly Harrison represented the United States.
Former Wedding Photographer Indicted in Pornography Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former wedding photographer in Raymore, Mo., has been indicted by a federal grand jury as part of a federal investigation into a fraud scheme to dupe dozens of women into having sex – which he recorded – under the guise they were rehearsing for a pornography movie.
Mario Ambrose Antoine, 33, of Raymore, was charged in a 21-count indictment returned under seal in the U.S. District Court in Kansas City, Mo., on Oct. 12, 2016. That indictment was unsealed and made public following Antoine’s arrest and initial court appearance today. Antoine remains in federal custody pending a detention hearing on Thursday, Oct. 27, 2016.
The federal indictment alleges that Antoine created a succession of various online aliases in which he posed as a talent manager, photographer and videographer for fictitious companies such as “Playboy Worldwide,” “Playboy Asia,” “Dash Agency,” and other companies that he claimed managed private overseas pornography websites. Beginning in August 2011, Antoine allegedly “auditioned” dozens of victims throughout the greater Kansas City area as models for prospective employment with these fictitious businesses by inducing them to engage in sexual and pornographic activity.
Antoine allegedly promised to pay his victims tens of thousands of dollars for entering into contracts for these modeling shoots and engaging in this sexual activity, which entailed auditions in which the victims performed various sexual activities with Antoine, which he recorded.
Antoine presented his victims with forged and false documents to add an appearance of legitimacy to this scheme, the indictment says, including falsified and forged checks issued to other “models,” IRS tax forms, Department of Homeland Security employment forms and various other documents. Antoine falsely registered several Internet domain names, the indictment says, and created false Facebook profiles.
After many of these victims complained they had not been paid as promised, Antoine allegedly forwarded images of this sexual activity with these victims to their employers and significant others.
On Nov. 12, 2015, Antoine allegedly conducted Google searches for “rape by deception,” “rape by deception kansas,” and “illegal to trick girls into sleeping with you,” and viewed websites and law journals regarding the criminality of committing rape by fraud or deception.
The federal indictment charges Antoine with 12 counts of wire fraud, two counts of cyberstalking, two counts of online enticement, two counts of making false statements to federal law enforcement agents, one count of obstructing justice, one count of extortion and one count of the false registration of a domain name.
The federal indictment cites six victims of the alleged scheme (identified as Victims 1 through 6).
The indictment alleges that Antoine promised to pay Victim 1 $1,000 per shoot and produced numerous images and videos of their sexual activity in 2011 and 2012. However, Victim 1 never received any payment from Antoine. In April 2015, Antoine allegedly told her that, in exchange for not selling or distributing the previously produced images and videos of their sexual activity, Victim 1 could either pay him $9,000 or she could come to Antoine’s house and have sex with him. On April 7, 2015, the indictment says, Victim 1 drove to Antoine’s residence to have sex with him in lieu of the payment of $9,000 to avoid the distribution of the pornographic images and videos.
According to the indictment, Antoine sent approximately 15 photos of Victim 1 to Victim 2 in March 2015. Using the alias “Nikki,” he told Victim 2 that the images instead portrayed “Nikki,” who had been paid $24,000 for three 30-minute photo shoots. “Nikki” also told Victim 2 that the images would be sold overseas “so nobody here even knows about it.” Antoine allegedly promised to pay $2,000 to Victim 2 for an “audition” and she engaged in sexual activity with Antoine, which he recorded.
Victim 3 engaged in sexual activity with Antoine in May 2015, the indictment says, which he recorded by taking photographs and making a video recording. When Victim 3 complained to Antoine in August 2015 that he she had never received the payment for her modeling activity, Antoine allegedly sent some of the nude images of Victim 3 taken during the recorded sexual activity to her employer.
According to the indictment, Antoine promised to pay Victim 4 $2,000 for “auditioning.” On April 24, 2015, Antoine allegedly produced and retained images and video recordings of his sexual activity with Victim 4. Between April and July 2015, Victim 4 contacted Antoine numerous times to receive payment, which never occurred. Beginning in June 2015, the indictment says, Antoine (assuming the online alias as “Nikki”) engaged in flirtatious communications with Victim 4’s ex-boyfriend and informed him that Victim 4 and Antoine were now in a relationship. Antoine also allegedly sent messages through the Facebook alias “Dalton Wayne” to Victim 4, referring to her pornographic photos being released and attaching a nude image of Victim 4 to one of the messages.
On May 26, 2015, Victim 5 traveled to Antoine’s residence for sexual activity, which the indictment says was recorded and retained by Antoine, after communicating with Antoine using the Facebook alias of “Nikki.” On Oct. 30, 2015, Antoine, as “Nikki,” sent a series of messages via Facebook to Victim 5’s boyfriend. Antoine informed Victim 5’s boyfriend “she does porn” and suggested that was how she was able to pay for her car. On the same day, Antoine, as “Nikki,” sent images of Victim 5 engaged in sexual activity with Antoine to Victim 5’s boyfriend.
In June 2015, Antoine communicated with Victim 6 using the Facebook alias of “Nikki.” Antoine allegedly sent Victim 6 some of the pornographic images of Victim 1 and claimed that the images instead depicted “Nikki” and that she received thousands of dollars for the photo shoot. On June 18, 2015, Antoine allegedly promised to pay Victim 6 $2,000 as “base compensation” and $8,000 as “special compensation” for “additional productions.” Antoine allegedly produced and retained images and video recordings of his sexual activity with Victim 6.
According to an affidavit filed in support of the original criminal complaint (also filed under seal and made public today) Antoine was released from state custody in a separate and unrelated criminal matter on Sept. 10, 2016. Since that time, the affidavit says, he has actively worked to obstruct the due administration of justice in the course of this ongoing criminal investigation. The federal indictment charges Antoine with the obstruction of justice related to this conduct.
On Sept. 27, 2016, Antoine contacted a detective with the Raymore Police Department, according to the affidavit. Antoine allegedly told the detective that a federal agent told him he should be able to retrieve the equipment seized by law enforcement because the FBI was not pursuing this matter any further. Antoine also allegedly claimed that his attorney had reviewed the search warrant and told Antoine it was “improper” and Antoine’s equipment should not have been seized. Antoine provided the name of a specific Kansas City criminal defense attorney, who later told investigators that he doesn’t have an attorney-client relationship with Antoine and had not spoken with him in years. The affidavit also states that Antoine may have created and used a fictitious e-mail account to impersonate the attorney.
The investigation is ongoing as authorities are still identifying additional victims. Anyone who believes they have been victimized by Antoine is urged to contact the FBI at 816-512-8200.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Patrick D. Daly and David A. Barnes. It was investigated by the FBI, the Raymore, Mo., Police Department and the Office of the Missouri Attorney General.
Former State Representative Paul DeWeese, M.D., Sentenced to Three Years' Probation for Health Care Document FraudRead the Press Release
Criminal Sentencing For $172,991 Fraud Follows A Separate $273,496 Civil Settlement And The Surrender Of Dr. DeWeese’s DEA Registration And Medical License
GRAND RAPIDS, MICHIGAN — Paul Nathan DeWeese, M.D., 61, of Holt, Michigan, was sentenced by the Hon. Robert Jonker, Chief U.S. District Court Judge, to three years’ probation and a $5,000.00 fine after pleading guilty to directing others to make and use false documents in connection with claims submitted to Blue Cross Blue Shield of Michigan ("BCBSM"). Dr. DeWeese paid $172,991.56 in criminal restitution prior to the sentencing hearing.
Dr. DeWeese, a two-term state representative from 1998 through 2002, was the President and Chief Executive Officer of NBO Medical, a chain of medical clinics that was devoted to treating peripheral neuropathy with a combination of nerve block injections and electrical stimulation treatments. In April 2012, Dr. DeWeese participated in the development of a directive at NBO Medical to comply with a BCBSM policy that required physicians to supervise nerve block injections administered by nurse practitioners. When he entered his plea of guilty to criminal health care fraud charges, Dr. DeWeese admitted that instead of performing the necessary supervision, he instructed his administrative assistant and others to place his signature on electronic medical records at NBO Medical, falsely denoting that the injections had been supervised. BCBSM would not have paid the affected claims without physician supervision of the sensitive medical procedures. The investigation of this case revealed that a number of Dr. DeWeese’s signatures originated outside the State of Michigan from electronic devices that were not affiliated with NBO Medical.
The criminal sentencing followed a March 2016 civil settlement in which Dr. DeWeese and NBO Medical paid $273,496.67 to Medicare and Medicaid to resolve allegations that NBO Medical violated the federal False Claims Act and the Michigan Medicaid False Claims Act by failing to refund overpayments for (1) electrical stimulation treatments and diagnostic vestibular tests that were improperly billed to those federal health care programs; and (2) services rendered by non-physician practitioners that were improperly billed, to federal health care programs, under Dr. DeWeese’s name.
Under the terms of the civil settlement, Dr. DeWeese also paid a $15,000.00 fine and voluntarily surrendered his DEA registration to resolve allegations that after closing NBO Medical, he also violated the federal Controlled Substances Act in his treatment of patients for pain and substance use disorders by (1) prescribing patients a combination of at least one opioid, one benzodiazepine, and carisoprodol (a combination colloquially referred to as the "Holy Trinity" for its rapid euphoric effects) on several occasions; (2) failing to address indicia of drug-seeking behavior in his treatment of certain patients; (3) prescribing Ritalin and Adderall to patients, on several occasions, without appropriate diagnoses or justifications; and (4) documenting, on numerous occasions, physical examinations of patients that did not occur. Dr. DeWeese also permanently surrendered his medical license to the State of Michigan as part of a separate licensing action, filed by the Michigan Bureau of Licensing and Regulatory Affairs and the Michigan Attorney General’s Office, that stemmed from the federal investigation of Dr. DeWeese’s controlled substance prescriptions.
The civil case, United States, et al., ex rel. Risner, et al. v. Paul N. DeWeese, M.D., P.L.C., et al., No. 1:12-cv-1308 (W.D. Mich.), resulted from a lawsuit filed by two former employees of NBO Medical. The lawsuit, known as a qui tam action, was filed under the False Claims Act and the Michigan Medicaid False Claims Act, which allow private whistleblowers to bring lawsuits on behalf of the United States and the State of Michigan and receive a share of any recoveries. In this case, the United States and State of Michigan intervened in the whistleblowers’ suit. The whistleblowers received $54,699.33 of the civil settlement proceeds, as well as additional amounts for attorney’s fees and costs.
U.S. Attorney Patrick Miles emphasized that his office sought prison time for Dr. DeWeese, who qualified for a term of 24 to 30 months of incarceration under the advisory U.S. Sentencing Guidelines. "When health care professionals engage in this type of conduct, they face civil fines, criminal restitution, suspensions and revocations of their licenses, and the possibility of imprisonment. As this case demonstrates, my office will aggressively use all available criminal, civil, and administrative remedies when it receives credible allegations of fraud and the improper prescribing of controlled substances. Document frauds in the health care field are particularly damaging because insurers rely on the accuracy and presume the authenticity of documents to assess the legitimacy of health care claims. As for improper prescribing of controlled substances, our opioid epidemic warrants the serious attention we give those allegations."
"Health care fraud investigations are among the highest investigative priorities within the FBI’s White Collar Crime Program. As one of the primary investigative agencies in the fight against Health Care Fraud, the FBI has jurisdiction over both federal and private insurance program fraud matters," said David P. Gelios, Special Agent in Charge, Detroit Division of the Federal Bureau of Investigation. "The Detroit FBI leverages its resources in the private and federal arenas through investigative partnerships with an expansive range of federal, state, and local agencies. As part of our national strategy to tackle Health Care Fraud, the FBI works closely with the Department of Justice and U.S. Attorney’s Offices throughout the country to more effectively disrupt the ability of medical professionals to defraud insurance providers by aggressively seeking parallel criminal and civil remedies."
Patricia Armstrong, Acting U.S. Postal Inspector in Charge, praised the cooperation of the law enforcement agencies involved in this investigation, saying, "It is an excellent example of what can be accomplished when federal and state law enforcement agencies share their resources and focus on a common goal."
The criminal and civil cases against Dr. DeWeese and NBO Medical resulted from a coordinated effort by the U.S. Attorney’s Office for the Western District of Michigan, the Michigan Attorney General’s Office, the Federal Bureau of Investigation, the United States Postal Inspection Service, the U.S. Department of Health and Human Services, Office of Inspector General, the Michigan State Police, the Michigan Department of Health and Human Services, and Blue Cross Blue Shield of Michigan.
END
Former State Representative Involved in Mortgage Fraud Scheme is SentencedRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that VICTOR CUEVAS, 52, of Bristol, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to one year of probation and a $1,000 fine for conspiring with others to commit bank fraud in connection with his home mortgage loan applications.
According to court documents and statements made in court, in the summer of 2013, CUEVAS, a City of Waterbury employee and, at that time, the state representative for the 75th District, wanted to purchase a residence in Bristol with a Federal Housing Administration (“FHA”) loan.
The U.S. Department of Housing and Urban Development provides mortgage insurance on loans made through its FHA program and mortgages offered through the program are subject to certain restrictions, including restrictions on the funds that may be used to purchase properties.
CUEVAS, with the assistance of others, represented to the mortgage bank that he was using gifted funds to purchase the property when, in fact, the money was not gifted but was instead loaned to CUEVAS for the purpose of purchasing the property.
Specifically, CUEVAS first represented to the mortgage bank that an individual who he identified as his nephew but, in fact, was a subordinate employee from the City of Waterbury, was providing him with cash to purchase the property as a gift. When the mortgage lender asked for the “nephew’s” bank account statements to prove that he had the money to gift to CUEVAS, CUEVAS withdrew the mortgage application. A few weeks later, CUEVAS had a different Waterbury employee, who CUEVAS identified as his “cousin,” “gift” him the $7,000. Both individuals signed a HUD statement under oath that the funds were, indeed, a “gift” and that no repayment of the monies was expected. However, as soon as the mortgage closed, CUEVAS re-paid the employee the $7,000.
On June 20, 2016, CUEVAS pleaded guilty to one count of conspiracy to commit bank fraud.
CUEVAS resigned from the Connecticut General Assembly in March 2016.
This matter was investigated by the Connecticut Public Corruption Task Force, notably the U.S. Department of Housing and Urban Development – Office of Inspector General, and the Federal Bureau of Investigation. The Task Force also includes members from the U.S. Department of Health and Human Services – Office of Inspector General, U.S. Postal Inspection Service and Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Sarah Karwan.
Citizens are encouraged to report corruption to the Connecticut Public Corruption Task Force by calling 203-238-0505.
Former Jacksonville Sheriff’s Officer Arrested for Seeking and Receiving Child PornographyRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the arrest and filing of a criminal complaint charging Michael Eugene Williams (59, Jacksonville) with publishing a notice seeking child pornography, receipt of child pornography, and possession of child pornography. If convicted on all counts, Williams faces a minimum mandatory term of 20 years, up to 60 years, in federal prison.
According to the complaint, on July 7, 2016, officers from the Jacksonville Sheriff’s Office executed a search warrant at Williams’s residence after receiving information that he was uploading child pornography for sharing to Google Drive. During the execution of the warrant, agents seized electronic devices, including a cellphone and a tablet that had been identified as belonging to Williams. The forensic examination of these devices revealed that Williams had been communicating by text message with a woman in Texas who had a 3-year-old daughter. The woman was producing pornographic images of her daughter and sending them to Williams in exchange for money that Williams sent to her via Western Union.
The Jacksonville Sheriff’s Office was able to identify the woman in Texas and agents from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Jacksonville and Dallas coordinated with the Cleburne Police Department (Texas) to obtain a search warrant for the woman’s residence. During an interview with her, she admitted to sending sexually explicit images of her daughter to Williams in exchange for money. She also stated that she had recent contact with Williams using a messaging app.
Law enforcement officers obtained a federal search warrant for Williams’s residence and seized a cellphone that belonged to him. A preliminary examination of the phone revealed additional images of child pornography received from the woman in Texas, as well as explicit chats of sexual conduct Williams wished to engage in with the child.
Williams has been arrested and is being held pending a detention hearing scheduled before United States Magistrate Judge Monte C. Richardson on Friday, October 28, 2016, at 2:30 pm.
A criminal complaint is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by Jacksonville Sheriff’s Office and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It will be prosecuted by Assistant United States Attorney Kelly S. Karase.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Former City of Gary Network Administrator IndictedRead the Press Release
HAMMOND – United States Attorney David A. Capp announced that a federal grand jury in Hammond returned a 6 count indictment charging Monique Bowling aka Monique Boyd, 44, of Merrillville, Indiana with one count of theft from local government receiving federal funds, one count of aggravated identity theft and four counts of mail fraud.
According to the indictment, Bowling allegedly stole and obtained by fraud more than one thousand Apple iPads and other computer equipment under the care, custody and control of the City of Gary. The indictment also alleges, that Bowling used a deceased person’s state ID card with at least one other person and participated in a scheme to obtain pension checks of a deceased individual.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until, and unless, proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case is the result of the investigative efforts of the Federal Bureau of Investigation, Indiana State Police and Internal Revenue Service-Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Gary T. Bell.
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Former City Clerk Sentenced to Prison for Improper Use of City Funds and Arson of Community BuildingRead the Press Release
Des Moines, IA – On October 21, 2016, Dorothy L. Dillinger, 61, was sentenced by United States District Court Judge James E. Gritzner to 60 months in prison for mail fraud and malicious use of fire, announced United States Attorney Kevin E. VanderSchel. Dillinger was ordered to serve three years of supervised release following her prison term and to pay $200 towards the Crime Victims’ Fund. A determination regarding restitution will be made at a separate hearing, which date has not yet been scheduled.
Dillinger pled guilty to these offenses on May 24, 2016. As part of her plea, Dillinger admitted to engaging in a scheme to defraud the City of Casey, Iowa, from around 2009 until August 2014, while serving as the City Clerk. As part of that scheme, Dillinger admitted that she used the City’s credit card and City funds to purchase items for personal use without the knowledge or approval of the City Council. Dillinger used the United States Postal Service to mail City checks to pay the resulting credit card statements. Dillinger also admitted to making unauthorized payments to herself for personal expenses without City Council approval or knowledge. Dillinger failed to disclose these expenditures to both the City Council, as well as in minutes from City Council meetings. Dillinger also admitted to maliciously destroying the City of Casey Community Building, which was used in activities affecting interstate commerce, by means of fire. The city building was destroyed by fire from the late night of August 19th into the morning of August 20th in 2014.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, the Iowa Department of Public Safety State Fire Marshal Division, and the Guthrie County Sheriff’s Office. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Former Bakersfield Police Detective Sentenced to 5 Years in Prison for Methamphetamine Trafficking ConspiracyRead the Press Release
FRESNO, Calif. — Patrick Mara, 36, of Bakersfield, formerly a detective with the Bakersfield Police Department, was sentenced today to five years in prison, to be followed by five years of supervised release, for a conspiracy to traffic methamphetamine, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, between June 14, 2012, and October 29, 2013, while employed as a police detective with the Bakersfield Police Department (BPD), Mara conspired with his partner Damacio Diaz, 44, of McFarland, to use their positions as police officers to seize narcotics and marijuana during the course of their work and sell the stolen drugs to a third party for profit. The third party, an acquaintance of Mara’s, further distributed the drugs into the community. In his plea agreement, Mara admitted that he and Diaz stole approximately 20 pounds of methamphetamine that should have been booked into evidence.
According to court documents, during the investigation, Mara agreed to meet with the FBI on three occasions. When asked a series of questions pertaining to the corruption allegations surrounding Diaz, Mara denied knowledge of any illegal activity, gave vague responses, or stated that he did not recall many details.
Acting U.S. Attorney Talbert stated: “When Mara used his position as a police officer to steal methamphetamine and marijuana, he caused drugs to remain in the community and drug traffickers to go unprosecuted. He endangered the community he pledged to serve and betrayed the honest, hard-working members of the police force. I want to thank the FBI, the DEA, the IRS-Criminal Investigation, and, in particular, the Bakersfield Police Department for their incredible work in this investigation. The Bakersfield Police Department worked side by side with our office, providing unfettered access to its records and dedicating two of its most accomplished detectives to the investigation.”
Bakersfield Chief of Police Williams stated: “Today’s sentencing of Patrick Mara marks a long awaited end to this lengthy investigation. His deliberate betrayal is in no way reflective of any employees within the Bakersfield Police Department. We are committed to providing quality and selfless service to our community while continuing to strengthen the relationships we have built.”
DEA Special Agent in Charge John J. Martin said: “Patrick Mara’s criminal behavior while wearing the badge compromised the integrity of the position, endangered the public and the safety of his colleagues. We may never fully comprehend why someone sworn to ‘protect and serve’ would commit these crimes, but we know honest law enforcement professionals head out each day to make our communities safer places to live, work and raise our children.”
“The American people have given police officers awesome authority,” said Monica M. Miller, Special Agent in Charge of the FBI Sacramento Field Office. “Men and women in law enforcement use that authority to keep us safe. Patrick Mara and his corrupt colleagues betrayed the trust of the citizens they served. They disgraced the profession of law enforcement and added to the burden of their colleagues who daily put their lives on the line with absolute integrity. The FBI and our partners will remain ever vigilant to identify and root out corruption, because honest public service is at the foundation of the law enforcement profession and our nation.”
This case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Bakersfield Police Department. Assistant United States Attorneys Brian K. Delaney and Angela Scott prosecuted the case.
On October 3, 2016, Judge O’Neill sentenced Diaz to five years in prison and ordered him to begin serving his sentence on December 5, 2016. Diaz had pleaded guilty to bribery, possession and attempted possession with the intent to distribute methamphetamine, and making and subscribing a false income tax return. The case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the Bakersfield Police Department.
Florida Couple Charged with Illegally Distributing Oxycodone in ConnecticutRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury in New Haven has returned an indictment charging HARRY DUREN, 73, and SANDRA DUREN, 53, both of Seminole, Florida, with one count of conspiracy to possess with intent to distribute, and to distribute, oxycodone.
The indictment was returned on October 19, 2016. The defendants appeared today before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and were released on $50,000 bonds.
According to allegations made in court, between approximately January 2005 and July 2016, HARRY and SANDRA DUREN obtained prescriptions for medications containing oxycodone from doctors in Connecticut, including Dr. Paul Bellofiore, and then arranged to resell their medications for their own profit. The DURENS, who are married, are former Connecticut residents.
If convicted of the charge in the indictment, the defendants face a maximum term of imprisonment of 20 years and a fine of up to $1 million.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation is being conducted by the DEA’s New Haven Tactical Diversion Squad, which includes officers from the Bristol, Greenwich, Hamden, Milford, New Haven, Shelton, Vernon and Wilton Police Departments. The case is being prosecuted by Assistant U.S. Attorney Avi M. Perry.
First Co-Defendant in Multi-Million Dollar Real Estate Deed Theft Scheme Sentenced to PrisonRead the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – October 24, 2016
SAN DIEGO – Daniel Deaibes was sentenced today to 24 months for his role in a scheme to steal title to Southern California homes and then “sell” the properties to unsuspecting buyers – before the buyers realized who the true owners were.
From September 2012 through their arrest in November 2014, Deaibes and his co-conspirators, including co-defendants Mazen Alzoubi and Mohamed Daoud, fraudulently sold or attempted to sell at least 15 homes worth more than $3.6 million that actually never belonged to them. On at least 10 occasions, they were successful—earning illicit proceeds of nearly $2.2 million.
Deaibes pleaded guilty in March 2015 to participating in the fraud and was sentenced today by U.S. District Judge Cynthia Bashant. As part of this plea, Deaibes admitted that he used aliases to deceive escrow and title officers into believing that he was “John Moran,” and that he was the true owner of property that was being marketed for sale. In fact, “John Moran” did not exist, and Deaibes and his co-conspirators planned to fraudulently sell the properties, divert the proceeds to their own bank accounts, and then quickly disburse the money overseas. On at least three occasions, Deaibes, posing as “Moran” and presenting a fake driver’s license, appeared before notaries to sign title documents and property deeds.
To make it appear that they owned these properties, the co-conspirators generated forged deeds that made it appear the true property owner had sold his or her home to a sham real estate “investment” business the co-conspirators controlled. They forged the true owners’ signatures on the deeds, and used forged notary stamps to make them appear legitimate. In reality, though, the true owners were entirely unaware of the pretend sales. Once the fraudulent documents were recorded in the chain of title, Alzoubi (using aliases and stolen identities) listed the properties for sale, posing to buyers, escrow companies, and title officers as the new owner. In this way, the co-conspirators collected all the proceeds of the sale, and the true owners were left with nothing.
Alzoubi, the ringleader of the fraudulent scheme, assumed multiple fake identities to keep the scheme going. He also posed as real people, pretending on one occasion that he was an attorney for one of the true owners. (Unbeknownst to Alzoubi at the time, he was talking to an undercover federal agent.) As a result of his greater role in the scheme, Alzoubi was charged with, and in January 2016 pleaded guilty to, aggravated identity theft, which carries a mandatory sentence of two years in prison in addition to his sentence for the fraud and money laundering. His sentencing is scheduled for November 7, 2016, at 9:00 am, before Judge Bashant.
Mohamed Daoud also pleaded guilty, in July 2015, admitting that he helped Alzoubi launder the proceeds of the scheme. They used Daoud’s company, “Norway LLC,” to pretend to acquire title to some of the properties. Daoud received approximately $270,000 in proceeds. In December 2015, before he was sentenced, Daoud fled the country and is now a fugitive.
Most of the properties the co-conspirators “sold” were post-foreclosure properties owned by banks or institutions such as Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are government-sponsored enterprises with a mission to provide liquidity, stability, and affordability to the United States housing and mortgage markets. As part of this mission, Fannie Mae and Freddie Mac purchase residential mortgages in the secondary market, enabling lenders to replenish their funds to finance additional single family loans. Fannie Mae and Freddie Mac can become the property owners if they own the mortgage loan at the time a home is foreclosed.
“Schemes like this one undermine the public’s confidence in their most personal and important investment, their homes,” said U.S. Attorney Laura Duffy. “I am committed to prosecuting people who continue to prey on the victims of the devastating mortgage meltdown, and sending those criminals to prison.”
“This scheme was designed to literally rip home ownership right out of the hands of innocent victims, and for those victims the costs were far greater than a title to a house,” said Leslie P. DeMarco, Special Agent in Charge, Western Region. “This scheme is callous and the perpetrators deserve the punishment set out for them. FHFA-OIG remains committed to our relentless pursuit of individuals who try to profit from the aftermath of the housing crisis.”
“Fraud targeting a family’s home, the heart of a family’s financial investment, has a ripple effect through our nation’s economy,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI is committed to investigate and uncover schemes by those who defraud homeowners.”
In addition to his jail sentence, Deaibes was ordered to pay $1,819,591 in restitution to the victims of the fraud.
DEFENDANT:
Daniel Deaibes, 14CR3325-BAS Age: 38 Rancho Cucamonga, CA
COUNT ONE: Mail fraud, in violation of 18 U.S.C. § 1341
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.
CO-DEFENDANTS:
Mazen Alzoubi, 14CR3325-BAS Age: 33 Rancho Cucamonga, CA
COUNT ONE: Conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 1349.
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution, and forfeiture.
COUNT TWO: Mail fraud, in violation of 18 U.S.C. § 1341.
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.
COUNTS THREE AND FOUR: Aggravated identity theft, in violation of 18 U.S.C. § 1028A.
Maximum Penalties: mandatory 2 years’ imprisonment, consecutive to any other term of imprisonment, $250,000 fine, $100 special assessment, restitution.
COUNT FIVE: Conspiracy to launder money, in violation of 18 U.S.C. § 1956(h).
Maximum Penalties: 20 years’ imprisonment, $500,000 fine or twice the value of the property involved in the transaction, $100 special assessment, restitution, and forfeiture.
Mohamed Daoud, 14CR3326-BAS Age: 53 Norway
COUNT ONE: Conspiracy to launder money, in violation of 18 U.S.C. § 1956(h)
Maximum Penalties: 20 years’ imprisonment, $500,000 fine or twice the value of the property involved in the transaction, $100 special assessment, restitution, and forfeiture.
AGENCIES
Federal Housing Finance Agency – Office of Inspector General
Federal Bureau of Investigation
Epsom Man Pleads Guilty to Misusing Another’s Social Security NumberRead the Press Release
CONCORD, N.H. – Gordon Daigle a/k/a Gordon Hill, 38, of Epsom, pleaded guilty today in the United States District Court for the District of New Hampshire to one count of Social Security Number Misuse, announced United States Attorney Emily Gray Rice.
According to statements made in Court, on April 6, 2015, Daigle applied for a New Hampshire Non-Driver Identification Card using another person’s name, date of birth, and Social Security number. He produced a Social Security card and a birth certificate in the other person’s name with his application to the Department of Motor Vehicles as means of identification. On May 23, 2016, Daigle was apprehended by the New Hampshire Joint Fugitive Task Force as a result of warrants issued by the Wyoming Board of Parole and the New Hampshire Department of Corrections Parole Board for parole violations. When he was taken into custody, he was in possession of the New Hampshire Non-Driver Identification Card issued in the other person’s name, but bearing his picture, and the matching Social Security card.
Daigle is scheduled to be sentenced on February 1, 2017.
The case was investigated by the Social Security Administration’s Office of the Inspector General and the United States Marshal’s Service. It is being prosecuted by Special Assistant United States Attorney Karen Burzycki.
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Embraer Agrees to Pay More than $107 Million to Resolve Foreign Corrupt Practices Act ChargesRead the Press Release
Parallel Resolutions with the Securities and Exchange Commission and Brazilian Authorities Equaling $97 Million in Disgorgement Also Announced Today
Brazilian aircraft manufacturer Embraer S.A. (Embraer) entered into a resolution to resolve criminal charges and agreed to pay a penalty of more than $107 million in connection with schemes involving the bribery of government officials in the Dominican Republic, Saudi Arabia and Mozambique, and to pay millions more in falsely recorded payments in India via a sham agency agreement.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Special Agent in Charge William J. Maddalena of the FBI’s Miami Field Office made the announcement.
“Embraer paid millions of dollars in bribes to win government aircraft contracts in three different continents,” said Assistant Attorney General Caldwell. “But this prosecution shows that the Criminal Division will hold accountable those who treat corruption as a mere cost of doing business. Between U.S., Brazilian and Saudi authorities, bribe payers and bribe takers alike have been brought to justice for their wrongdoing.”
“Embraer tried to bribe their way into several profitable aircraft contracts around the world,” said Assistant Special Agent in Charge Maddalena. “Instead of reaping a nice profit, their criminal conduct earned the Brazilian aircraft manufacturer a substantial penalty that more than wiped out their gains from these contracts. Crime does not pay!”
According to the company’s admissions, Embraer executives and employees paid bribes to government officials and falsified books and records in connection with aircraft sales to foreign governments and state-owned entities in multiple countries. In 2008, Embraer paid $3.52 million to an influential government official in the Dominican Republic via a false agency agreement to secure a contract to sell the Dominican Air Force eight military aircraft for approximately $92 million. In 2010, Embraer paid $1.65 million to an official at a Saudi Arabian state-owned and -controlled company via a false agency agreement to secure that instrumentality’s agreement to purchase three aircraft from Embraer for approximately $93 million. In 2008, Embraer paid $800,000 via a false agency agreement with an intermediary designated by a high-level official at Mozambique’s state-owned commercial airline, Linhas Aéreas de Moçambique S.A. (LAM), to secure LAM’s agreement to purchase two aircraft from Embraer for approximately $65 million. In 2009, Embraer paid an agent $5.76 million pursuant to a false agency agreement with a shell company in connection with a contract it secured to sell the Indian Air Force three aircraft for approximately $208 million.
In total, Embraer earned profits of nearly $84 million on the foregoing aircraft sales.
Embraer entered into a three-year deferred prosecution agreement (DPA) to resolve the case. As part of the DPA, Embraer admitted to its involvement in a conspiracy to violate the FCPA’s anti-bribery and books and records provisions and to its willful failure to implement an adequate system of internal accounting controls. Embraer agreed to pay a criminal penalty of $107,285,090; continue to cooperate with the department’s investigation; enhance its compliance program; implement a more adequate system of internal accounting controls; and retain an independent corporate compliance monitor for a term of three years.
The Criminal Division’s Fraud Section reached this resolution based on a number of factors, including the fact that Embraer did not voluntarily disclose the FCPA violations, but did cooperate with the department’s investigation after the Securities and Exchange Commission (SEC) served it with a subpoena. After Embraer began cooperating, it did so fully and disclosed all relevant, non-privileged facts known to it, including about individuals involved in the misconduct. Embraer did not, however, engage in full remediation. It disciplined a number of company employees and executives engaged in the misconduct, but did not discipline a senior executive who was aware of bribery discussions in emails in 2004 and had oversight responsibility for the employees engaged in those discussions. As a result, the criminal penalty in this case is 20 percent below the bottom of the applicable range under the U.S. Sentencing Guidelines, a discount that reflects Embraer’s full cooperation but incomplete remediation.
In related matters, Embraer reached settlements with both the SEC and Brazilian authorities. Embraer reached a settlement with the SEC, under which it agreed to pay $83.8 million in disgorgement and $14.4 million in prejudgment interest. The SEC has agreed to credit the disgorgement that Embraer pays to Brazilian authorities. Embraer also reached a settlement with Brazilian authorities under which it agreed to pay $20 million in disgorgement. With the cooperation of U.S. authorities, Brazilian authorities have charged 11 individuals for their alleged involvement in Embraer’s misconduct in the Dominican Republic. Saudi Arabian authorities have charged two individuals for their alleged involvement in Embraer’s misconduct in Saudi Arabia.
The FBI’s Miami Field Office investigated the case. Senior Trial Attorney Jason Linder and Trial Attorney John-Alex Romano of the Criminal Division’s Fraud Section prosecuted the case.
The Fraud Section appreciates the cooperation and assistance provided by the SEC in this matter. Authorities in Brazil, the Dominican Republic and South Africa also provided assistance and cooperation. The Criminal Division’s Office of International Affairs also provided assistance during the investigation.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Election Officers Designated in Central District of IllinoisRead the Press Release
Springfield, Ill. – U.S. Attorney Jim Lewis announced today the appointment of District Election Officers in the Central District of Illinois in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. Assistant U.S. Attorneys appointed to serve as election officers in each of the district’s four divisions include: Gregory M. Gilmore in the Springfield headquarters office; David H. Hoff in the Urbana branch office; Darilynn J. Knauss in Peoria; and, John K. Mehochko in Rock Island. District election officers are responsible for overseeing the district’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department headquarters.
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.
To respond to complaints of election fraud or voting rights abuses on Nov. 8, 2016, and to ensure such complaints are directed to the appropriate authorities, designated election officers will be available in each of the district’s four offices on Nov. 8, while the polls are open. Election officers may be reached by the public at the following telephone numbers:
Springfield: Assistant U.S. Attorney Gregory M. Gilmore, 217-492-4450;
Urbana: Assistant U.S. Attorney David H. Hoff, 217-373-5875;
Peoria: Assistant U.S. Attorney Darilynn J. Knauss, 309-671-7050; and,
Rock Island: Assistant U.S. Attorney John K. Mehochko, 309-793-5884.
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 office in the Central District of Illinois can be reached by the public at 217-522-9675.
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.
District Teenagers Sentenced to Eight Years in Prison for Series of Armed Robberies in Southeast WashingtonRead the Press Release
WASHINGTON – David Crocker, 17, and Sadiq Blaine, 16, both of Washington, D.C., have each been sentenced to eight years in prison on charges stemming from a series of armed robberies committed in February and March of 2016 using the website OfferUp to lure multiple victims to Southeast Washington, U.S. Attorney Channing D. Phillips announced today.
Crocker and Blaine were charged as adults given the serious nature of their crimes. They pled guilty in July 2016 in the Superior Court of the District of Columbia. Crocker pled guilty to three counts of armed robbery for offenses on Feb. 28, 2016, and March 18, 2016, and Blaine pled guilty to two counts of armed robbery for offenses on Feb. 25, 2016, and March 17, 2016. They were sentenced on Oct. 21, 2016 by the Honorable Juliet McKenna. Upon completion of their prison terms, the defendants will be placed on five years of supervised release.
According to the government’s evidence, on Feb. 25, 2016, at about 9:30 p.m., Blaine and Crocker went to the front of the Capitol View Library, in the 5000 block of Central Avenue SE, to meet two victims who responded to an ad for three iPhone 6s’es placed on OfferUp. He and Crocker jumped into the back seat of the victims’ vehicle, at which point Blaine pulled out an imitation firearm and pointed it at the two victims, who were seated in the driver’s seat and front passenger’s seat respectively. Both Blaine and Crocker shouted words to the effect of “Give me the money.” The first victim handed over about $120 and the second victim handed over at least $500. Blaine and Crocker demanded additional money, and the first victim told them that they did not have any more money but had a bank card. Blaine and Crocker then ordered the first victim to drive at gunpoint to an ATM and gave directions along the way. While enroute, the victims saw a Metropolitan Police Department (MPD) cruiser coming towards them. The first victim stopped the car in the middle of the intersection of Central Avenue SE and 52nd Street SE to get the attention of the police officers. Both Blaine and Crocker fled from the car, and MPD officers pursued them but were unable to catch them.
Three days later, on Feb. 28, 2016, at about 4:45 p.m., a victim came to the 5100 block of Astor Place SE in response to an ad for three iPhone 6Ss’es placed on OfferUp. Crocker came out of 5120 Astor Place SE to meet the victim, said that someone would be out in a few minutes to sell him the iPhone, and then went back inside. A few minutes later, Crocker came back outside and told the victim to drive into the driveway between the buildings of 5120 Astor Place SE, which leads to a parking lot and dumpster. A second suspect then approached the victim, put a knife to his neck, and demanded his money and cell phone. The second suspect got into the rear left passenger seat with his knife at the victim’s neck. Crocker got into the front passenger seat with a backpack and pulled out a knife that he brandished at the victim. Crocker took $500 and the victim’s cell phone. Both Crocker and the second suspect then fled.
In a third incident, on March 17, 2016, at about 2 p.m., Blaine and Crocker met yet another victim, who had driven to Astor Place SE in response to an ad for a Mercedes SUV placed on OfferUp. Blaine approached the driver’s side window, pointed an imitation firearm at the victim, demanded his money, and told him not to move. The victim handed Blaine his wallet, from which Blaine removed $1,000 and a photocopy of the victim’s Social Security card. Blaine demanded more money. Crocker approached the front passenger’s door and threw a brick through the window, which shattered the window and struck the victim in the hand. Crocker then opened the front passenger’s side door and went through the glove box and front area of the car, looking for additional money. Both Blaine and Crocker then fled.
Finally, on March 18, 2016, at about noon, Crocker, Blaine, and a third suspect came out of 5120 Astor Place SE to meet two victims who came to the block in response to an ad for a Ford truck placed on OfferUp. One victim got out of the car, while the other remained inside. The victim asked where the truck was, and Crocker said that it was in the back of the building. The victim refused to walk around the building and asked to see the title for the vehicle. Crocker went inside for a few minutes and then returned with white papers, which the victim recognized were not a title. Crocker grabbed the victim and stuck an imitation firearm into the victim’s side and demanded money. Blaine also stuck a knife at the victim’s side, demanding money. The victim gave up his wallet, which had $60, credit cards, and his identification. Blaine then ran to the vehicle, where the second victim was sitting. Blaine brandished the knife and demanded the second victim’s money. The second victim took out his wallet and gave Blaine all of his cash, which was $2. Crocker, Blaine, and the third individual fled.
Both defendants were arrested on March 24, 2016 when MPD executed a search warrant inside 5120 Astor Place SE. Search warrants were later executed on the cell phones, which revealed, among other things, a video of the defendants together the day of the March 17, 2016 robbery flashing large amounts of cash.
In announcing the sentence, U.S. Attorney Phillips commended the work of those who investigated the case for the Metropolitan Police Department (MPD). He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Criminal Investigator John Marsh; Paralegal Specialists Stephanie Gilbert, Antoinette Sakamsa, and Tonya Queen; Victim/Witness Advocate Jennifer Clark, and Assistant U.S. Attorney Jennifer Kerkhoff, who supervised the case. Finally, he thanked Assistant U.S. Attorneys Natasha Smalky and Thomas Saunders, who investigated and prosecuted the matter.
Detroit man pleads guilty for role in heroin conspiracyRead the Press Release
HUNTINGTON, W.Va. – A Detroit man pleaded guilty today for his role in distributing heroin in 2013 and 2014, announced United States Attorney Carol Casto. Anthony D. Latham, 25, entered his guilty plea to conspiracy to distribute heroin.
Between January 2013 and July 2014, Latham admitted that he conspired with other individuals to distribute heroin in the Point Pleasant area of Mason County. Latham further admitted that during the course of the conspiracy, he and others would frequently transport heroin from Columbus and Chillicothe to a residence in Gallipolis, where they would store and prepare it for distribution. Latham also admitted that members of the conspiracy would then distribute the heroin to customers in Gallipolis and to customers traveling from Point Pleasant. Latham additionally admitted that he and others also frequently traveled to Point Pleasant, where they used various residences to conduct distributions. Latham admitted that he was responsible for distributing up to 700 grams of heroin during the conspiracy.
Latham faces up to 20 years in federal prison when he is sentenced on January 30, 2017.
The Drug Enforcement Administration Task Force, which includes the Putnam County Sheriff’s Department and the Gallia-Meigs County, Ohio, Major Crimes Task Force, conducted the investigation. Assistant United States Attorney Joseph F. Adams is handling the prosecution. The plea hearing was held before Chief United States District Judge Robert C. Chambers.
This prosecution was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Department of Justice Announces Expansion of Program to Enhance Tribal Access to National Crime Information DatabasesRead the Press Release
Department of Justice Tribal Access Program Will Continue to Improve the Exchange of Critical Data
The Department of Justice is expanding the Tribal Access Program (TAP) for National Crime Information which provides federally-recognized tribes access to national crime information databases for both civil and criminal purposes. Tribes interested in participating in TAP must submit a letter or resolution from the tribe’s governing body by Dec. 2. TAP allows tribes to more effectively serve and protect their communities by ensuring the exchange of critical data.
In the fall of 2015, the Department of Justice selected tribes to participate in the initial User Feedback Phase of TAP. This partnership focused on testing the department’s technology solution and training support; it also enabled tribes to identify and share best practices regarding the use of national crime information databases to strengthen public safety.
During 2016, participating tribes received a kiosk workstation that provided access to national systems as well as training to support whole-of-government needs. User Feedback Phase tribes have elected to implement TAP in a variety of criminal and civil agencies. Those tribal criminal agencies included law enforcement agencies, prosecutors, criminal courts, jails and probation departments. The tribal civil agencies and programs that were eligible to use TAP included agencies whose staff and volunteers have contact with or control over Indian children; public housing agencies; child support enforcement agencies; head start programs; civil agencies that investigate allegations of abuse, neglect and exploitation of children; civil courts that issue orders of protection, restraining orders, or other keep away orders; and sex offender registration programs.
“Sharing crime information helps police solve crimes and fosters better cooperation between tribal, federal, state and local law enforcement,” said Director Tracy Toulou for the department’s Office of Tribal Justice. “This expansion is another step forward in the Justice Department’s ongoing efforts to strengthen the ability of tribal institutions to keep communities safe. For example, tribal court orders of protection entered into this system will be accessible to law enforcement nationwide and help safeguard victims of domestic violence.”
“TAP showcases how a blend of Indian Country policy experts, technology specialists, and law enforcement experts working in partnership with native communities can have a direct and positive impact on the daily lives of people in Indian Country,” said Deputy Assistant Attorney General and Chief Information Officer Joseph Klimavicz for the department’s Justice Management Division. “It is my hope that the development of a comprehensive solution to the issue of tribes’ long-standing inability to access national crime information databases breaks an impasse that was putting communities at risk.”
The department’s Office of Community Oriented Policing Services (COPS) and the
Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART) are each providing $1 million in funding for the expansion, which will be used for approximately 10 kiosks.
“Access to data is an integral part of building trust between tribal law enforcement agencies, the federal government, and tribal communities,” said Director Ronald Davis of the COPS Office. “The COPS Office is proud to continue its support of the Tribal Access Program, which provides public safety agencies serving tribal populations the access to critical information databases that can help keep their communities safe.”
“The SMART Office is proud to contribute a million dollars to this effort, for the second straight year,” said Director Luis C. deBaca for the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking. “Access to federal justice information systems is critical to public safety in tribal communities, as they work to combat sexual violence and build registration and notification programs.”
TAP enhances tribal efforts to register sex offenders pursuant to the Sex Offender Registration and Notification Act (SORNA); have orders of protection enforced off-reservation; protect children; keep firearms away from persons who are disqualified from receiving them; improve the safety of public housing, and allow tribes to enter their arrests and convictions into national databases.
TAP supports tribes in analyzing their needs for national crime information and includes appropriate solutions, including a-state-of-the-art biometric/biographic kiosk workstation with capabilities to process finger and palm prints, take mugshots and submit records to national databases, as well as the ability to access Criminal Justice Information Services (CJIS) systems for criminal and civil purposes through the Department of Justice’s Criminal Justice Information Network. TAP, which is managed by the department’s Chief Information Officer, provides specialized training and assistance for participating tribes, including computer-based training and on-site instruction, as well as a 24/7 Help Desk.
Eligibility Criteria For Interested Tribes
Because of the success of the User Feedback Phase, the department is expanding TAP. Tribes who have either an Adam Walsh Act Sex Offender Registry, or a tribal law enforcement agency which is not a federal Bureau of Indian Affairs police department, are eligible to participate in TAP. The pertinent dates for the next phase of TAP:
- Expression of Interest Submission: Oct. 24 - Dec. 2
- Notification of Selection: Dec. 16
- Onboarding and Vetting: Jan. 9, 2017 - May 31, 2017
- Deployment: May 9 - Sept. 29, 2017
Federally recognized tribes interested in participating in TAP must submit a letter or resolution from the tribe’s governing body. That document should include:
- Name and contact information of a senior tribal executive who will act as the primary TAP point of contact. This individual must have authority to ensure coordination of TAP across various tribal agencies, departments and offices. An alternate point of contact must also be named.
- A statement acknowledging that misuse or non-use may result in TAP access being discontinued.
- Language affirming the tribe’s agreement to:
- Make whole-of-government legislative and policy determinations which provide guidance to tribal agencies about how national crime information databases are used, including what tribal data is entered into those systems.
- Use TAP to close gaps related to access to national crime information databases if that was an impediment to the implementation of SORNA. This must be accomplished within one year of deployment.
- Execute a Memorandum of Agreement with FBI CJIS and pay the standard national user fees associated with fingerprint-based for noncriminal justice (civil) purposes.
- Provide necessary documentation and establish appropriate policies during the onboarding and vetting time period.
- Ensure users of TAP establish appropriate accounts, take required training, background checks, and obtain necessary certification during the onboarding and vetting time period.
- Ensure users of TAP participate in deployment day training during the deployment time period.
- Comply with and adhere to auditing and policy requirements as well as all personnel, physical, and technical security requirements.
- Provide high-speed Internet access to the kiosk.
The letter or resolution from the tribe’s governing body must be sent to [email protected] no later than midnight eastern time, Dec. 2.
For more information about the Justice Department’s work on tribal justice and public safety issues, visit: www.justice.gov/tribal.
For specific information on TAP, visit www.justice.gov/tribal/tribal-access-program-tap.
Decatur Man Sentenced to Life in Prison for Murder Conspiracy, Armed RobberyRead the Press Release
Urbana, Ill. – U.S. District Judge Colin S. Bruce today sentenced Kelton Snyder, 24, of Decatur, Ill., to life in prison for conspiring to murder a witness, Paige Mars, also of Decatur, in April 2015. Under federal statute, there is no parole or early release for a defendant serving a life sentence for conspiracy to murder a witness.
“Because of defendant Snyder’s actions, a young woman’s life ended in a violent and senseless act,” said U.S. Attorney Jim Lewis. “The result of investigative work by our partner law enforcement agencies, together with the U.S. Attorney’s office, to investigate and prosecute these crimes, holds Snyder accountable, and in prison, for the rest of his life.”
“The arrest and sentencing of Snyder highlights how the teamwork of our federal and local law enforcement partners continues to remove violent criminals from our streets,” said Sean Cox, FBI Special Agent in Charge. “We are committed to aggressively search, locate and apprehend violent criminals to make our neighborhoods safer.”
In April 2016, a jury convicted Snyder for conspiring to murder Paige Mars, 19, after Snyder and his co-conspirator robbed the Circle K convenience store at 1685 South Baltimore in Decatur on April 3, 2015. Snyder had previously pled guilty, on Mar. 7, 2016, to committing the armed robbery, brandishing a 12-gauge shotgun during the robbery, and that he was a convicted felon, legally barred from possession of firearms, when he committed the robbery.
During four days of trial, the government presented evidence that Snyder met with his co-conspirator on April 5, 2015, because he feared that Mars, who served as the robbery getaway driver, might go to law enforcement about the robbery. The government presented evidence, including surveillance camera recordings of the robbery, where Snyder is clearly seen holding a shotgun, the same weapon used to murder Mars. Evidence also included text and Facebook messages that Mars questioned Snyder about information she had heard, that Snyder was violent to women. Mars’ body was found on April 6, 2015, in the vicinity of the sanitation district. Also on April 6, officers executed a search warrant at Snyder’s grandmother’s home, where Snyder had been living in a basement bedroom, in the 300 block of S. 19th Street, Decatur. Officers recovered 20-gauge and 12-gauge shotgun shells from Snyder’s bedroom. On May 15, 2015, officers recovered a Mossberg 12-gauge shotgun hidden along a path in the sanitation district, which was the shotgun used during the robbery and in the murder.
The case was prosecuted in federal court by Assistant U.S. Attorneys Jason Bohm and Katherine Boyle. The Decatur Police Department and FBI conducted the investigation with the assistance of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Macon County Sheriff’s Office.
Davenport Man Sentenced to Prison for Felon in Possession of a Firearm ChargeRead the Press Release
DAVENPORT, IA- On October 21, 2016, Lloyd Cortez Horne, age 28, of Davenport, Iowa, was sentenced by Chief United States District Court Judge John A. Jarvey to 60 months imprisonment after pleading guilty to felon in possession of a firearm, announced United States Attorney Kevin E. VanderSchel. Horne was ordered to serve three years of supervised release following his term of imprisonment and to pay $100 towards the Crime Victims Fund.
On March 15, 2016, Horne was stopped by the Davenport Police Department for an outstanding warrant. As a result of that stop, officers found and seized a loaded Ruger 9mm handgun. Horne had prior felony convictions in 2008 and 2009.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Davenport Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Davenport Man Sentenced to Prison for EscapeRead the Press Release
DAVENPORT, IA- On October 20, 2016, Vincent Salvitory Brocato, age 35, of Davenport, Iowa, was sentenced by District Court Judge Rebecca Goodgame Ebinger to fourteen months imprisonment after pleading guilty to escape, announced United States Attorney Kevin E. VanderSchel. Brocato was ordered to serve three years of supervised release following his prison term and to pay $100 towards the Crime Victims’ Fund.
In December 2015, Brocato was transferred to the Davenport Residential Re-Entry Center to serve the remainder of a federal sentence from a conviction for conspiracy to manufacture methamphetamine. On April 6, 2016, Brocato was advised that he was placed on restriction after violating the Residential Re-Entry Center rules. Without authorization, Brocato left and did not return. A federal complaint was filed and an arrest warrant obtained for escape. On April 13, 2016, a Davenport Police Department officer made contact with a subject in VanderVeer Park, identified him as Brocato and placed him under arrest.
This matter was investigated by the United States Marshals Service and the Davenport Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
D.C. Man Pleads Guilty to $1.9 Million Investment Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – Homayoon Daneshvar, 63, a resident of Washington, D.C., pleaded guilty today to charges related to a $1.9 million investment fraud scheme.
According to the statement of facts filed with the plea agreement, from in or about April 2009 to January 2013, Daneshvar lied and made false promises to eight victim investors to persuade them to give him approximately $1.9 million. Daneshvar told the victim investors the money would be used for bridge financing to purchase foreclosed property that would be “flipped,” or quickly resold for profit. Daneshvar promised a monthly return on their investments, but in reality Daneshvar used the money to invest in the stock market, pay “returns” on the investments back to the investors, and to pay for his own personal expenses.
Daneshvar will be sentenced on Feb. 10, 2017, and faces a maximum penalty of 20 years in prison for wire fraud. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Claude M. Hilton. Assistant U.S. Attorney Grace L. Hill is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-231.
Colorado Springs Man Sentenced to 20 Years in Federal Prison for Felon in Possession of Firearms and Possession of 100 Percent Pure MethamphetamineRead the Press Release
DENVER – Roger Wade Anderson was sentenced last week by U.S. District Court Judge Christine M. Arguello to serve 240 months (20 years) in federal prison, followed by 5 years on supervised release for being a felon in possession of a firearm and for possession of just under 10 pounds of 100 percent pure methamphetamine, Acting U.S. Attorney Bob Troyer and ATF Denver Field Division Special Agent in Charge Ken Croke announced. Anderson, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Anderson was first indicted by a federal grand jury in Denver on March 10, 2016. He pled guilty to the gun and drug crimes on July 18, 2016. He was sentenced by Judge Arguello on October 18, 2016.
According to court documents, including the stipulated facts contained in the defendant’s plea agreement, on July 24, 2015, law enforcement first became aware that an individual named Roger Anderson was distributing large quantities of methamphetamine in the Colorado Springs area. Multiple independent sources confirmed the fact that an individual named Anderson would drive his red Ford F250 truck to Glendale, Arizona to pick up the methamphetamine. During the investigation into Anderson, law enforcement discovered that he would drive several times a month to Glendale, Arizona, stay in a local hotel in a pre-paid room, and would pick up a cooler that had insulation removed so that the methamphetamine was packed in the container’s sides instead.
During one of Anderson’s trips to Arizona, law enforcement conducted surveillance, confirming he left his Colorado Springs home, traveled to Glendale, Arizona, and then drove back to the Colorado Springs area. As the defendant returned to Colorado Springs via I-25, a traffic stop was initiated. During a pat search officers found plastic baggies of methamphetamine in both front pockets. A Colorado Springs Police Officer with a drug certified canine conducted a sniff search of the exterior of the Ford truck. The dog hit on the passenger’s side front door and the driver side of a camper which was in the rear of the truck. Following the obtaining of a search warrant, agents and officers found a cooler in the bed of the pickup truck. When officers removed the cooler and opened it, the cooler contained fish and shrimp which were packed in ice. Officers then removed the liner of the cooler, and observed ten packages of suspected methamphetamine concealed within the cooler. Officers and agents also conducted a search of Anderson’s residence. In addition to finding methamphetamine, amphetamine, and drug paraphernalia, they also found a 12 gauge shotgun in the living room and a .357 revolver in a large black safe. The revolver had been confirmed stolen.
“Methamphetamine is a lethal poison,” said Acting U.S. Attorney Bob Troyer. “Armed dealers bringing that poison into Colorado communities will go to federal prison for a long, long time.”
“Anderson was a major player in the cycle of violence and drugs in southern Colorado, making multiple trips a month to pump more meth into southern Colorado. The number of lives he has ruined, both addicts and their loved ones, is incalculable,” said ATF Special Agent in Charge Ken Croke. “By peddling death, violent criminals like Anderson destabilize the strength of an entire community. Our close partnership with El Paso Sheriff’s Office, Colorado Springs PD and other law enforcement in Southern Colorado is designed to remove the insidious parasite of crime so that innocent citizens can live peacefully in their communities.”
This case was investigated by Colorado Springs office of ATF, the El Paso County Sheriff’s Office and the Colorado Springs Police Department. Anderson was prosecuted by Assistant U.S. Attorney Kurt Bohn.
Canadian Man Pleads Guilty to Drug Trafficking and Money Laundering ChargesRead the Press Release
BOSTON – A Canadian man pleaded guilty today in U.S. District Court in Boston in connection with his role in a drug trafficking and money laundering organization that imported Canadian marijuana and MDMA, the club drug also known as “ecstasy” or “mollie,” into the United States.
David Nguyen, 40, of Toronto, Canada, pleaded guilty to one count of conspiracy to distribute MDMA and marijuana and one count of money laundering conspiracy. Nguyen was indicted in January 2014 and arrested in Canada in May 2014. In July 2016, Nguyen was ordered to be extradited, and in October 2016, he temporarily surrendered to the United States. U.S. District Court Judge Denise J. Casper scheduled sentencing for Dec. 19, 2016.
From February 2010 to about March 2012, Nguyen conspired with others to move MDMA and marijuana over the Canadian-U.S. border. Nguyen and a Canadian co-conspirator, Gurshuran Singh, recruited couriers to drive MDMA and marijuana to Joshua Rabinovitch in Salem, Mass. Rabinovitch then sold the drugs in the U.S. and returned the proceeds to Canada.
In April 2012, Singh also recruited, Adeel Bhutta, to pick up $240,000 in drug proceeds from Rabinovitch’s sale of MDMA in Massachusetts.
In July 2014, Bhutta was sentenced to 28 months in prison for his role in the money laundering conspiracy. In February 2015, Rabinovitch was sentenced to 24 months in prison for his role in the drug trafficking and money laundering conspiracies. In August 2016, Singh pleaded guilty to participating in the drug and money laundering conspiracies and is scheduled to be sentenced on Dec. 7, 2016.
The narcotics charge provides for a minimum mandatory sentence of five years and no greater than 40 years in prison, a minimum of three years and up to a lifetime of supervised release and a fine of $5 million. The money laundering charge provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. The Department of Justice’s Office of International Affairs provided assistance in securing Nguyen’s extradition to the United States. Assistant U.S. Attorneys Seth B. Kosto of Ortiz’s Cybercrime Unit and Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit are prosecuting the case.
Calloway County, Kentucky, Man Charged with Multiple Counts of Sexual Exploitation of Children, Production of Child Pornography, and Sex Trafficking of ChildrenRead the Press Release
Twelve minor victims identified in a 27 count federal indictment
PADUCAH, Ky. – A Calloway County, Kentucky, man was charged by grand jury in a 27 count indictment with inducing minor victims to engage in sexually explicit conduct, inducing minor victims to produce visual depictions of that conduct which were then transmitted over the internet, and with inducing a minor to engage in commercial sex acts announced United States Attorney John E. Kuhn, Jr.
Jeffrey Desmond Carter, 37, of Murray, Kentucky, was charged specifically with 25 counts of production of child pornography, one count of receiving child pornography, and one count of sex trafficking of children.
Carter was initially charged in a criminal complaint on October 6, 2016. According to an Affidavit attached to the complaint, on February 6, 2015, the Murray (Kentucky) Police Department was notified that a 14-year-old female had sent sexually explicit photos and videos of herself to Carter, through a Facebook messenger account under the name of Adam Bryan.
Law enforcement was able to determine the Facebook address of the suspect was Jeffrey D. Carter who resided in Murray, Kentucky. Further, a search warrant on the Facebook account revealed that multiple IP addresses were being used by Jeffrey Carter and law enforcement was able to identify thousands of messenger conversations between Carter and multiple victims.
The alleged conduct charged in the indictment took place between March of 2013, and January of 2015. Carter was charged in Calloway County Circuit Court and currently is in state custody. The Office of the Commonwealth’s Attorney has agreed that the federal case should proceed first against Carter, and will seek to dismiss without prejudice the current charges, thereby preserving the right of the Commonwealth to renew prosecution of the state charges following the conclusion of the federal case.
If convicted at trial, Carter faces a mandatory prison term of no less than 15 years in prison for counts 1-22, 24, 25, & 27; no less than 5 years in prison for count 23; no less than 10 years in prison for count 26; and up to and including a lifetime period of supervised release.
This case is being prosecuted by Assistant United States Attorney Seth A. Hancock and is being investigated by the Federal Bureau of Investigation. In addition to the original investigative agencies, the Murray Police Department and Calloway County Sheriff’s Department, assistance in the Federal investigation is also being received from the Marshall County Sheriff’s Department; McCracken County Sheriff’s Department; Metropolis, Illinois Police Department; Murray State University Police Department; and the Purchase Area Sexual Assault and Child Advocacy Center
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This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty