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23 June 2016
Eight, including a Former State Employee, Charged in Northern District of Georgia as Part of the Largest National Medicare Fraud Takedown in HistoryRead the Press Release
ATLANTA – The Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced an unprecedented nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against 301individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-three state Medicaid Fraud Control Units also participated in the arrests. In addition, the HHS Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in the history of the Medicare Fraud Strike Force, both in terms of the number of defendants charged and loss amount.
“This exemplifies the ongoing commitment to investigate and prosecute those who steal tax dollars that provide essential healthcare to the elderly and low-income families,” said U.S. Attorney John A. Horn. “Those who commit healthcare fraud through filing of false claims, payment or receipt of bribes, or fraudulent medical practices will be held accountable for defrauding the U.S. government.”
“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – it is a serious crime,” said U.S. Attorney General Loretta Lynch. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people – many of them in need of significant medical care. They promise effective cures and therapies, but they provide none. Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends. The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”
“This indictment demonstrates our office’s continued commitment to protect crucial Medicaid dollars from fraud and abuse,” said Georgia Attorney General Sam Olens. “I would also like to thank our federal partners for their work and cooperation in this case.”
“The FBI, in working with the U.S. Department of Justice and the U.S. Health and Human Services Office of Inspector General, brought these investigative cases forward for federal prosecution as part of a national coordinated effort to firmly and aggressively protect the much needed federal funds that make up the Medicare program. Those individuals that engage in Medicare fraud are not only stealing from the federal taxpayer but also from those individuals who are counting on Medicare and Medicaid for their healthcare needs,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“These actions send a strong message to those who allegedly steal from Medicare and Medicaid: The Office of Inspector General will continue to work hard with our law enforcement partners to eliminate the financial bleeding of our health care system,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.
Specifically, the Northern District of Georgia case announced as part of the nationwide Medicare Strike Force takedown include:
United States v. Otis Shannon, et. al., Case No. 1:16-CR-218
According to U.S. Attorney Horn, the indictment, and other information presented in court: From on or about 2013 until 2015, Otis Shannon was employed with the Georgia Department of Behavioral Health and Developmental Disabilities. In this position, Shannon was tasked with reviewing mental health provider applications to verify that prospective mental health providers met requisite minimum staffing levels and had proper credentials and licenses to provide proper care to Georgia Medicaid beneficiaries.
According to the indictment, Shannon solicited and accepted bribes from applicants to accept falsified and forged documents. Matthew Harrell, Denise Dixon, Geovon Martin, Marion Simpson, Sharon Zellner, Derrick McDow, and Cortim Martin were owners, operators or employees of health care providers that paid bribes to Otis Shannon to gain approval to provide mental health services to Georgia Medicaid beneficiaries. These mental health providers were approved to bill Georgia Medicaid without meeting program requirements that were in place to ensure that beneficiaries were obtaining quality care. These unqualified providers improperly billed Georgia Medicaid for over $6.6 million and Georgia Medicaid paid the providers over $5.9 million.
The following defendants have been charged by indictment with conspiracy to commit health care fraud and conspiracy to commit bribery:
- Otis Shannon, 42, of Stone Mountain, Georgia.
- Matthew Harrell, 40, of Atlanta, Georgia.
- Denise Dixon, 40, of Fayetteville, Georgia.
- Geovon Martin, 39, of Mableton, Georgia.
- Marion Simpson, 66, of Austell, Georgia.
- Sharon Zellner, 58, of McDonough, Georgia.
- Derrick McDow, 46, of Greensboro, North Carolina.
- Cortim Martin, 31, of Smyrna, Georgia.
The case is being investigated by the Georgia State Attorney General’s Medicaid Fraud Control Unit, FBI, and U.S. Department of Health & Human Services, Office of the Inspector General. Assistant United States Attorney Jeffrey Brown and Special Assistant United States Attorney Robin Daitch are prosecuting this case. Including the enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
The court documents for each case will posted online, as they become available, here: http://www.justice.gov/opa/documents-and-resources-june-2016-medicare-fraud-strike-force-press-conference.
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 U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
- Otis Shannon, 42, of Stone Mountain, Georgia.
Eight Firearms Arrests Made as Part of Violence Reduction Network Operation in West MemphisRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Jeffrey Reed, Resident Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), announced today the final two arrests of a targeted operation designed to remove violent gun offenders from communities in and around West Memphis. Since Friday, June 17, 2016, eight individuals have been arrested in this ongoing operation, which is part of the Violence Reduction Network (VRN) initiative in West Memphis.
On Thursday, Derrico Dashawn Davis, 27, and Nakia Dejuan Mondy, 41, were arrested in the early-morning operation. They joined several others already in custody, including Marvis Ballard, 31, and Patrick Barrett, 22, who were arrested Wednesday night, and Orlando D. Ingram, 45, Marvin Meux, 43, and Burt Calvin Neely, 29, who were arrested last Friday. Nicco M. Alls, 28, was already in state custody when served the federal arrest warrant. All defendants are from West Memphis except Davis, who is from Osceola.
The eight defendants were named in separate indictments charging them with being felons in possession of firearms. United States Magistrate Judge Beth Deere held initial appearance hearings on the three prior arrests and will hold initial appearances for the newly arrested defendants on Friday.
"These individuals are among the most dangerous members of their community, and removing them and their guns from the streets was a top priority," Thyer said. "I’m pleased that this coordinated effort through the VRN is succeeding in helping make our local communities safer, while at the same time punishing those who believe gun violence is somehow acceptable."
"Through partnerships with ATF, other federal agencies and local law enforcement, the removal of violent offenders from northeast Arkansas has made these communities a safer living environment for their citizens," Reed said.
In 2015, West Memphis was selected to participate in the VRN. The other cities comprising the VRN include: Little Rock; Detroit; Chicago; Compton, California; Flint, Michigan; Wilmington, Delaware; Newark and Camden, New Jersey; and Oakland and Richmond, California. The VRN is a comprehensive approach to reducing violent crime in communities around the country. Through the VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation (FBI), the ATF, the United States Marshals Service (USMS), the Drug Enforcement Administration (DEA), the Executive Office of the United States Attorneys, the Community Oriented Policing Services Office and the Office on Violence Against Women.
On Tuesday, Judge Deere issued an order detaining Meux. Meux was originally arrested by state authorities on October 21, 2015, after West Memphis police officers were dispatched to the 300 block of South 16th Street in West Memphis in reference to two subjects being held at gunpoint while attempting to repossess a car belonging to Meux. While attempting to hook up the car, Meux jumped into the driver’s seat and drove off in the vehicle, with a repossession employee still in the passenger seat. After fleeing a short distance, Meux drove back to his residence. After the employee exited Meux’s vehicle he saw Meux running towards him with a small black gun. The two repossession employees then got into their truck and drove away, while Meux pointed the gun at them.
West Memphis police officers received consent to search the residence and located an SKS assault rifle and a .38 caliber revolver. Meux has been previously convicted of drug offenses and is a high-ranking member of a gang known as the Gangster Disciples in West Memphis.
Ingram, the leader of the Gangster Disciples in West Memphis, was also arrested for his involvement in a shootout occurring in that city.
The federal indictments, unsealed today, were handed up by a Grand Jury on March 8, 2016. The seven separate indictments charge seven defendants with felon in possession of firearms. One complaint, issued by United States Magistrate Judge Beth Deere on June 21, 2016, charges an eighth defendant (Barrett) with being a felon in possession of a firearm and possession of a stolen firearm.
Previous convictions associated with the eight defendants include: murder in the first degree; battery 2nd degree; robbery; residential burglary; sale of a controlled substance; delivery of cocaine; possession of with intent to deliver cocaine; possession of a controlled substance; felon in possession of a firearm; aggravated assault; and hindering apprehension.
As a result of the joint effort, one assault rifle, one rifle, seven handguns, and multiple extended ammunition magazines were seized.
If convicted of being a felon in possession of a firearm, Ingram and Neely will face a sentence of not less than 15 years to life imprisonment due to their prior criminal history. The other six defendants will face a sentence of not more than 10 years imprisonment.
The investigation and prosecution of this case is a coordinated effort through the ATF, DEA, FBI, West Memphis Police Department, Crittenden County Sheriff’s Office, Osceola Police Department, Mississippi County Sheriff’s Office, Jonesboro Police Department, Shelby County Multi-Agency Gang Unit, and Memphis Police Department. The cases are being prosecuted by Assistant United States Attorneys Michael Gordon and Liza Jane Brown.
An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.
Eagle Butte Man Sentenced for Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Assault Resulting in Serious Bodily Injury was sentenced on June 20, 2016, by U.S. District Judge Roberto A. Lange.
Carl White Eagle, age 27, was sentenced to 21 months in custody, followed by 2 years of supervised release, and a special assessment of $100 to the Federal Crime Victims Fund.
White Eagle was indicted by a federal grand jury on August 11, 2015. He pled guilty to Assault Resulting in Serious Bodily Injury on March 29, 2016.
The conviction stems from an incident that took place on April 5, 2015, at Eagle Butte, when White Eagle and some friends were visiting and drinking at a residence. At some point, White Eagle and his girlfriend got into an argument about him being with other girls. They were standing in the kitchen entryway, and when the victim walked behind them, White Eagle turned around and without warning or saying anything, assaulted the victim, knocking her to the floor. The victim tried to get up, but was dazed. Blood was pouring from her mouth and she was crying. When the victim sought medical attention later that day, she told the doctors what had happened and law enforcement was notified. The victim required complex plastic surgery to repair the injuries to her lip and mouth.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
White Eagle was immediately turned over to the custody of the U.S. Marshals Service.
Doctor Admits Accepting Thousands of Dollars in Cash Bribes for Referrals to Lab CompaniesRead the Press Release
CAMDEN, N.J. – A doctor with offices in Toms River, New Jersey, today admitted accepting thousands of dollars in exchange for patient referrals to two lab companies that performed blood and DNA testing, U.S. Attorney Paul J. Fishman announced.
Vincent Destasio, 54, of Toms River, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count 1 of an indictment charging him with conspiracy to accept cash bribes.
According to documents filed in this case and statements made in court:
Destasio, a doctor of osteopathic medicine, was paid cash kickbacks by two sales representatives – Daniel Gilman, 63, of Ocean Grove, New Jersey, and Kenneth Roberson, 46, of Wall, New Jersey – who were partners operating PROMED, a marketing and sales company specializing in blood testing laboratories and DNA laboratory testing companies.
From March 2014 through May 2015, Gilman and Robberson solicited Destasio by paying him cash bribes for referring patient lab work to two separate laboratories for which Gilman and Robberson provided marketing and sales. One company (Company 1) was a blood testing laboratory company and the other was a DNA laboratory testing company (Company 2). Neither Company 1 nor Company 2 had any knowledge of or involvement in the kickback scheme.
Gilman and Robberson received monthly commission checks from the two companies for referrals. After receiving the commission checks from the two companies, Gilman and Robberson would identify the number of patients Destasio had referred and pay him a cash kickback based on those patients. Destasio was paid thousands of dollars in cash bribes for his referrals.
Destasio faces a statutory maximum sentence of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Sept. 26, 2016.
Gilman and Robberson have both pleaded guilty to an information charging them with conspiracy to bribe a physician and await sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Camden.
U.S. Attorney Fishman reorganized the health care fraud practice shortly after taking office, creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: John J. Bruno Jr., Esq., Rutherford, New Jersey
Dallas, Texas, Woman Faces up to Twenty Years in Federal Prison for Mail FraudRead the Press Release
DALLAS — Katia Maribell Olivera, 26, of Dallas, Texas, appeared in federal court today before U.S. Magistrate Judge David L. Horan and pleaded guilty to one count of mail fraud announced U.S. Attorney John Parker of the Northern District of Texas.
Olivera, who remains on bond, faces a maximum statutory penalty of twenty years in federal prison and a $250,000 fine. Sentencing is set for October 5, 2016, before Chief U.S. District Judge Barbara M. G. Lynn.
According to documents filed in the case, in July 2013, Olivera filed a voluntary bankruptcy petition in U.S. Bankruptcy Court in the Northern District of Texas. Following the filing of the bankruptcy petition creditor International Auto Sales filed an Emergency Motion to Annul the Automatic Stay to repossess a 2006 BMW 7 Series automobile purchased by Olivera.
In May 2013, Olivera made a $4,000 down payment and signed a credit application seeking a loan for the purchase of the BMW. The application was mailed to National Auto Lenders located in Miami Lakes, Florida. In this credit application, Olivera signed and submitted a false and fraudulent application falsely representing her monthly gross income and also contained the forged signature of her employer.
This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas. Olivera is the 16th defendant convicted since July 2014 as part of that initiative.
Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Dallas Man Sentenced to 151 Months in Federal Prison on Child Porn ConvictionRead the Press Release
DALLAS — Avel Barron, 26, of Dallas, was sentenced this afternoon by U.S. District Judge Sam A. Lindsay to 151 months in federal prison, following his guilty plea in September 2015 to one count of receipt of child pornography, announced U.S. Attorney John Parker of the Northern District of Texas.
According to documents filed in the case, in late July 2015, Barron used his computer and the Internet to receive videos of minors engaged in sexually explicit conduct.
When special agents with the Federal Bureau of Investigation executed a search warrant at his residence on August 4, 2015, agents found and seized computers and other computer media. Barron, who was present during the search, acknowledged that he possessed more than 175 images and videos of child pornography. Some of those images and videos that he collected depicted sadistic acts involving children, and some of the images and videos he possessed depicted infants or toddlers.
This year marks the 10th anniversary of the Project Safe Childhood (PSC) initiative. PSC is a department initiative launched in May 2006 to combat the proliferation of technology-facilitated sexual exploitation crimes against children. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, tribal and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. Since FY 2011, the Department of Justice has filed 20,260 PSC cases against 19,111 defendants. These cases include prosecutions of child sex trafficking; sexual abuse of a minor or ward; child pornography offenses; obscene visual representation of the sexual abuse of children; selling or buying of children; and many more statutes. To learn more about PSC’s work, please visit: https://www.justice.gov/psc.
The FBI investigated the case. Assistant U.S. Attorney Camille Sparks was in charge of the prosecution.
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Cranberry Twp. Woman Admints Embezzling $150,000 from UPMC SubsidiaryRead the Press Release
PITTSBURGH - A Butler County resident pleaded guilty in federal court to a charge of embezzlement related to health care, United States Attorney David J. Hickton announced today.
Elizabeth A. Rotto, 46, of Cranberry Township, Pennsylvania pleaded guilty to one count before United States District Judge David Stewart Cercone.
In connection with the guilty plea, the court was advised that Rotto embezzled funds in the amount of $150,000 that belonged to Askesis Development Group, a subsidiary of the University of Pittsburgh Medical Center.
Judge Cercone scheduled sentencing for Nov. 8, 2016 at 10 a.m. The law provides for a total sentence of ten years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Rotto on bond.
Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Rotto.
Coeur d’Alene Man Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
COEUR D'ALENE – Kody Ray Gibbs, 29, of Coeur d’Alene, Idaho, pleaded guilty yesterday to possession of sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Gibbs was indicted by a federal grand jury in Coeur d'Alene on April 19, 2016.
According to the plea agreement, in February 2016, a woman purchased an “open box” tablet-computer from a local Coeur d’Alene business. When she powered the tablet, she found that it contained images of child pornography. The Coeur d’Alene Police were called. Detectives determined that Gibbs had purchased the computer previously and returned it for a refund. Gibbs was located, interviewed, and admitted to downloading child pornography.
The charge of possession of sexually explicit images of minors is punishable by up to ten years in prison, a maximum fine of $250,000.00, and up to lifetime supervised release.
Sentencing is set for September 6, 2016, before Chief United States District Judge B. Lynn Winmill, at the federal courthouse in Coeur d'Alene.
The case was investigated by the Coeur d’Alene Police Department and the Kootenai County Prosecutor’s Office. They participate in the Idaho Internet Crimes Against Children (ICAC) Task Force, a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icactaskforce.org.
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.”
Cocaine Trafficker Sentenced to over 13 Years in Federal Prison for Gun and Drug OffensesRead the Press Release
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Moses Wood Brown, Jr., age 38, of Hillcrest Heights, Maryland, today to 162 months in prison followed by five years of supervised release for possession with intent to distribute cocaine base and possession of a firearm in furtherance of a drug trafficking crime. Judge Chasanow also ordered Brown to forfeit $42,758, a firearm, ammunition and a bulletproof vest.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Chief Cathy L. Lanier of the Metropolitan Police Department; and Chief Hank Stawinski of the Prince George’s County Police Department.
According to his plea agreement, on four occasions from September 12 to December 18, 2013, Brown provided Cornelius Jackson with a total of 201.9 grams of crack cocaine, commonly referred to as crack cocaine, for which Jackson paid a total of $9,100.
On February 20, 2014, law enforcement executed a search warrant at Brown’s residence and seized three plastic bags containing a total of approximately 881.5 grams of cocaine base; a plastic container of Inositol which is frequently used as a cutting agent for cocaine; $42,758; a bullet proof vest and 150 rounds of .40 caliber ammunition; two plastic bags containing a total of approximately 193.9 grams of powder cocaine; a semiautomatic pistol loaded with fourteen 9 millimeter rounds of ammunition in the magazine and one round in the chamber; and narcotics paraphernalia, including a digital scale, used for the processing and cooking of powder cocaine into crack cocaine.
Brown admitted that he used his residence to manufacture and distribute crack cocaine.
In a separate proceeding, Cornelius Maurice Jackson, a/k/a “Buddy Love” and “Buddy,” age 43, of Washington, D.C., was sentenced to 11 years in prison for conspiring to distribute and possession with intent to distribute cocaine base. Judge Chasanow also ordered Jackson to forfeit $9,100.
United States Attorney Rod J. Rosenstein commended the DEA, Metropolitan Police Department and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Kelly O. Hayes and Ray D. McKenzie, who prosecuted the case.
Chinese National will be Deported for Role in Fraudulent Test Taking SchemeRead the Press Release
PITTSBURGH - A Chinese national has been sentenced in federal court to one year probation with immediate deportation on his conviction of conspiracy in relation to a scheme involving the fraudulent taking of college entrance exams, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Yudong Zhang.
According to information presented to the court, Yudong Zhang acted as a facilitator for two Chinese nationals, who were associates of his, to have the SAT and TOEFL examinations taken on their behalf by others. Using counterfeit passports that contained identifying information of Zhang’s associates and the impostors’ photographs, Zhang’s associates earned scores on three college entrance examinations which were then used by Zhang’s assoicates to earn admission to Virginia Tech University. Zhang’s associates were also able to obtain F-1 Visas to enter the United States as students on the basis of that fraudulent admission.
Prior to imposing sentence, Judge Conti stated that her sentence reflected the seriousness of the offense in that it allowed people who otherwise would not have been eligible to enter the U.S. to enter and also brought unfairness to the American education system.
Assistant United States Attorney James T. Kitchen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Homeland Security, Homeland Security Investigations and the Department of State for the investigation leading to the successful prosecution of Zhang.
Chadron Man Sentenced for Production of Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Jesse Lucio, 39, formerly of Chadron, Nebraska, was sentenced today in Lincoln, Nebraska, to 19 years in prison by United States Senior District Judge Richard G. Kopf, for the production of child pornography. Following his release from prison, Lucio will serve 10 years on supervised release and be required to register as a sex offender.
In September of 2015 the Chadron Police Department was informed of a possible sexual assault involving Lucio and a minor female victim. The reporting party indicated to law enforcement that there was a video of Lucio and the minor female victim engaging in sexually explicit conduct on a tablet computer located at Lucio’s home. The reporting party stated that she knew the age of the minor female victim and that she also saw Lucio in the video. The tablet was later examined by law enforcement officials, including a forensic examination conducted by the FBI, and 2 videos were recovered on the tablet computer, both videos having been produced on September 12, 2015, in Chadron Nebraska, and depicting Lucio and the minor victim engaged in sexually explicit conduct as defined by federal law.
Lucio was interviewed by the Chadron Police Department and admitted to having sexual contact with the minor female victim and recording the sexually explicit conduct on the tablet computer.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Chadron Police Department and the Federal Bureau of Investigation.
Cedar Rapids Man Sentenced for Stealing Gun from Local Gun StoreRead the Press Release
A man who stole a gun from Sports Outfitters in Cedar Rapids was sentenced June 21, 2016, to more than 6 years in federal prison.
Dante Glinn, 23, from Cedar Rapids, received the prison term after a January 27, 2016, jury verdict finding him guilty of theft of a firearm from a licensed dealer.
The evidence at trial showed that, on August 25, 2015, Glinn walked into Sports Outfitters, a Cedar Rapids gun store, reached behind the counter, and stole a .45 caliber Kimber pistol before fleeing the scene. Testimony at trial established that Glinn used an alias to get medical treatment at a local hospital for a wound visible in the videos the same evening as the theft.
Glinn was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Glinn was sentenced to 78 months’ imprisonment. A special assessment of $100 was imposed, and he was ordered to make restitution of $1,019.95 to Sports Outfitters. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
The case is being prosecuted by Assistant United States Attorney Jacob Schunk and investigated by the Cedar Rapids Safe Streets Task Force. The task force is composed of representatives from the Federal Bureau of Investigation, United States Marshal Service, and the Cedar Rapids Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-00093.
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Captured Fugitive Pleads Guilty in Odometer Tampering Scheme That Defrauded Hundreds of Car BuyersRead the Press Release
A woman originally from Lackawanna County, Pennsylvania, entered guilty pleas today in U.S. District Court in Philadelphia to all 23 counts of an indictment related to an odometer tampering conspiracy, the Department of Justice announced.
Judith Ann Aloe, 55, previously residing in Lauderdale Lakes, Florida, was scheduled to stand trial in May 2014, in U.S. District Court in Philadelphia. When she failed to appear for trial on May 14, 2014, a bench warrant was issued for her arrest by Chief Judge Petrese B. Tucker. Aloe remained at large for 21 months. In February 2016, she was located in Baja California, Mexico, and turned over to the U.S. Marshals Service at the Mexico/California border. Today, she pleaded guilty to conspiracy to tamper with odometers, make false odometer certifications, and commit securities fraud and to 11 counts each of securities fraud and making false odometer certifications. Her sentencing is on Sept. 29 at 10 a.m. before Chief Judge Tucker.
In April 2014, Aloe’s co-defendant, Kyle Novitsky, then 46, of Scott Township, Pennsylvania, pleaded guilty to several counts in the indictment. In October 2014, Novitsky was sentenced to 60 months in prison and ordered to pay restitution in the amount of $1,482,000 to victims. From at least as early as 2004 through 2010, Aloe and Novitsky purchased high mileage cars and trucks, and then rolled back the odometers on the vehicles to make them appear more valuable. Doing business under various company names, Aloe and Novitsky sold close to 250 vehicles with rolled back odometers.
“The purchase of an automobile is one of the biggest purchases consumers make, and consumers rely on accurate mileage information to assess the value and safety of a vehicle,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Not only do purchasers pay more for used cars, but odometer fraud could ultimately affect a car’s safety and the costs of future repairs to the consumer. The Department of Justice will continue to vigorously enforce consumer protection laws by bringing those who commit this crime to justice.”
Aloe admitted to participating in the purchase of high-mileage cars, sport-utility vehicles and trucks from various locations of a national car rental company. She then worked with Novitsky to roll back and alter the odometers and resold the vehicles at wholesale automobile auctions in Pennsylvania. Aloe also caused to be altered the high mileages shown on the titles received from the car rental company to reflect false, low mileages and retitled the vehicles in Pennsylvania with false mileages. These titles were then given to the buyers so that the mileage on the titles matched the mileage shown on a vehicle’s odometer.
This case was prosecuted by Senior Litigation Counsel Linda I. Marks of the Civil Division’s Consumer Protection Branch and former Consumer Protection Branch Trial Attorney Jessica Gunder, now an Assistant U.S. Attorney in Idaho, with assistance from the U.S. Attorney’s Office in the Eastern District of Pennsylvania. The case was investigated by the National Highway Traffic Safety Administration’s (NHTSA) Office of Odometer Fraud Investigation.
More information on odometer fraud is available on the NHTSA’s website and tips on detecting and avoiding odometer fraud are available at this page. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
Burley Man Sentenced to 20 years for Possessing and Distributing Child PornographyRead the Press Release
POCATELLO – Danny Henderson, 42, of Burley, Idaho, was sentenced yesterday to 20 years in prison for possessing, distributing, and receiving child pornography, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also imposed 15 years of supervised release. Henderson pleaded guilty on February 10, 2016.
According to the plea agreement, on June 5 and 6, 2015, Henderson sent fifteen images of sexually exploitative images of minors via Twitter Direct Messaging, receiving in exchange eighteen images. A subsequent search of his residence revealed several computers with numerous sexually exploitive images of minors. Henderson admitted that he possessed the images, knowing the images contained visual depictions of minors engaged in sexually explicit conduct, and also knowing that production of such visual depictions involved the use of minors in sexually explicit conduct. Henderson was previously convicted of lewd conduct with a child under 16 in 2002.
The case was investigated by Homeland Security Investigations.
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.”
Bridgeport Woman Sentenced to 10 Years in Federal Prison for Drug and Gun OffensesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that AMONDA MENDEZ, also known as “M-Dot” and “Dot,” 25, of Bridgeport, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 120 months of imprisonment, followed by four years of supervised release.
This matter stems from an investigation headed by the DEA’s Bridgeport High Intensity Drug Trafficking Area Task Force and Stamford Police Department, with the assistance of the Fairfield Police Department.
According to court documents and statements made in court, in January 2015, Stamford Police received information that MENDEZ was distributing a large quantity of heroin, cocaine, crack cocaine and oxycodone in Stamford. Between February and April 2015, the DEA Task Force conducted four controlled purchases of narcotics from MENDEZ. A subsequent court-authorized wiretap confirmed that MENDEZ was distributing heroin, cocaine, crack cocaine, marijuana and prescription pills, including Percocet and Xanax.
MENDEZ was arrested on May 17, 2015, after the wiretap revealed that she was injured the previous day in a shoot-out with another individual and she might be preparing to retaliate further. A search of MENDEZ’s Bridgeport apartment on the day of her arrest revealed the handgun she used in the shooting incident, a sawed-off shotgun, narcotics, and approximately $10,000 in cash. In addition, a search of her vehicle revealed a bulletproof vest.
MENDEZ has been detained since her arrest. On November 19, 2015, she pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin, and one count of possession of a firearm in furtherance of a drug trafficking crime.
The DEA’s Bridgeport High Intensity Drug Trafficking Area Task Force includes members from the Bridgeport, Stamford, Stratford, Norwalk, Milford and Trumbull Police Departments, and the Connecticut State Police.
This case was prosecuted Assistant U.S. Attorney Amy C. Brown.
Bankcard Fraud Defendants Sentenced to Federal PrisonRead the Press Release
ATLANTA - Stefon D. Clark, Ayanna Johnson, and Quantaves Curry, have been sentenced to three years, five months in federal prison for conspiracy to commit bank fraud in connection with their scheme to deposit fraudulent checks at USAA, the Navy Federal Credit Union, and BB&T.
“These defendants appealed to their victims with promises of ‘fast cash,’” said U.S. Attorney John Horn. “The ease with which they were able to prey on unsuspecting citizens reinforces that bank customers should always carefully guard their bank account information.”
“Bank fraud is not a victimless crime and this case clearly illustrates that those engaging in this type of criminal act will pay a high price for those actions. The FBI will continue to dedicate significant investigative resources toward the protection of the banking industry and those customers in which it serves from those who would prey on them and defraud them,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges and other information presented in court: the defendants participated in a bank fraud scheme that lasted at least 17 months, compromised more than 240 bank accounts, and resulted in more than $600,000 in losses to three financial institutions. The scheme generally worked as follows: the defendants would post advertisements on social media sites, such as Instagram, seeking individuals who had bank accounts with certain financial institutions and were looking to make “fast cash.”
Upon learning of an interested party, the defendants would obtain the individual’s bank account information—including account number, PIN number, online banking information, and debit card. The defendants then deposited checks that had been stolen or were for closed bank accounts into the compromised bank account, and would withdraw the funds as cash before the financial institution realized that the checks were not valid. In total, the defendants deposited more than one million dollars in invalid checks into the compromised bank accounts and withdrew over $600,000 in cash.
All of the defendants pleaded guilty, with Johnson and Curry pleading guilty to conspiracy to commit bank fraud and Clark pleading guilty to conspiracy to commit bank fraud and seven substantive bank fraud counts. Curry pleaded guilty on July 6, 2015, Johnson pleaded guilty on August 26, 2015, and Clark pleaded guilty on January 20, 2016.
Stefon D. Clark, 27, Ayanna Johnson, 23, and Quantaves Curry, 27, all of Atlanta, Georgia, were sentenced to three years, five months in prison to be followed by supervised release, and ordered to pay restitution in the amount of $613,476.25. Curry and Johnson were sentenced on November 16, 2015 and Clark was sentenced on June 22, 2016.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Christopher J. Huber and former Assistant United States Attorney Jamie Mickelson prosecuted the case.
This announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.”
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 U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Bank Robber Sentenced to 71 MonthsRead the Press Release
G.F. “Pete” Peterman, III, Acting United States Attorney for the Middle District of Georgia, announced that Charles Michael Beatty, age 44, of Knoxville, Tennessee was sentenced on June 23, 2016, to 71 months in federal prison for bank robbery and ordered to pay a total of $9,070 in restitution by Senior United States District Court Judge Hugh Lawson in Valdosta, Georgia.
On February 17, 2012, Mr. Beatty entered the Bank of America in Valdosta, Georgia. He approached a teller and presented a note demanding “50’s and 100’s.” As the teller read the note, Mr. Beatty took the note back and stated, “Don’t press the button, and don’t give me the dye pack.” The teller complied and gave him $8,000. A few days prior to this robbery, Mr. Beatty robbed the First Tennessee Bank in Chattanooga, Tennessee, taking $1070. Mr. Beatty was taken into custody on February 22, 2012, when he was arrested in Hollywood, California, for possession of a vehicle he had stolen from Cleveland, Tennessee.
“Charles Michael Beatty was a virtual one-man crime wave in East Tennessee and South Georgia during February, 2012, robbing and stealing every few days until his eventual apprehension on the west coast. It took dedicated and determined law enforcement efforts to track him across the country and bring his crime spree to an end,” said Acting United States Attorney Peterman.
The case was investigated by the Federal Bureau of Investigation and the Valdosta Police Department. Assistant United States Attorney Robert McCullers prosecuted the case for the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Baldwin Man Sentenced to over 17 Years in Federal Prison for Taking Sexually Explicit Photos of His Friends’ ChildrenRead the Press Release
Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced Raymond Mykale Goodridge, age 21, of Baldwin, Maryland, today to 210 months in prison, followed by 25 years of supervised release, for production of child pornography in connection with images and videos he made of two minor boys, both engaged in sexually explicit conduct. Judge Garbis also ordered that upon his release from prison Goodridge must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Harford County Sheriff Jeffrey R. Gahler; Chief James W. Johnson of the Baltimore County Police Department; Harford County State’s Attorney Joseph I. Cassilly; and Baltimore County State’s Attorney Scott Shellenberger.
According to his plea agreement, Goodridge was friends with the mother of a prepubescent boy. Goodridge spent time alone with the boy, spending the night at the boy’s home in Dundalk, Maryland. The boy also spent the night at Goodridge’s home. In May 2014, when Goodridge was alone with the boy at the boy’s house, Goodridge used his cell phone to produce four photos which depict the boy partially naked. The photos focused on the boy’s genitals.
Goodridge was also friends with the mother of a 13 year old boy, who lived in Harford County. Goodridge and the 13 year old boy spent time together alone. In May 2014, Goodridge used a camera phone to surreptitiously take a video of the boy, intending to capture images of the boy engaging in sexually explicit conduct. The video captured the boy changing clothes and in various states of undress, included fully naked, and his genitals.
In February 2015, law enforcement seized digital devices belonging to Goodridge from his former residence, including a laptop and hard drive, which contained more than 600 images and videos of minors engaged in sexually explicit conduct. Numerous files portrayed prepubescent children engaged in sex acts with adults. The hard drive also contained the images and videos Goodridge produced of the two boys.
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.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, Harford County Sheriff’s Office, Baltimore County Police Department, and the Harford County and Baltimore County State’s Attorney’s Offices for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who prosecuted the case.
Attorney General Loretta E. Lynch Statement on the U.S. Supreme Court Ruling in Fisher v. University of Texas at AustinRead the Press Release
Attorney General Loretta E. Lynch released the following statement today on the U.S. Supreme Court ruling in Fisher v. University of Texas at Austin:
“I am pleased that the Supreme Court has recognized our compelling interest in ensuring diversity in higher education.
“Diverse student enrollment is a vital part of America’s educational experience. It creates a positive forum for scholarship and discovery, offering the opportunity for young people to learn from, interact with, and work alongside individuals of different backgrounds. It promotes a stronger workforce, allowing employers and businesses to harness the wide range of experience and expertise they need to compete and win in today’s global economy. And it aligns with the most cherished values of our country: opportunity, inclusion, and the notion that out of many disparate backgrounds, we are joined together as one united community. Our country is stronger, more credible, and more effective when our educational institutions include highly-qualified individuals with roots, cultures, and traditions that reflect our nation’s rich diversity. Going forward, the Department of Justice will continue to stand up for these principles, and to work with colleges and universities to promote diversity in a way that is consistent with the law.”
Attorney General Loretta E. Lynch Announces Extradition of Five Defendants Charged in Connection with Mexican Sex Trafficking EnterpriseRead the Press Release
Charged Offenses Include Sex Trafficking, Interstate Prostitution, Alien Smuggling, Money Laundering, Racketeering and Racketeering Conspiracy in Connection with Scheme to Compel Mexican Women and Girls into Prostitution in the United States
Five defendants were arraigned in federal court today following their extradition from Mexico on charges of sex trafficking and related violations as the latest development resulting from coordinated bilateral human trafficking enforcement efforts.
Attorney General Loretta E. Lynch, Director Sarah R. Saldaña of U.S. Immigration and Customs Enforcement (ICE); Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Robert L. Capers of the Eastern District of New York made the announcement.
Jovan Rendon-Reyes, aka Jovani, 32; Guillermina Rendon-Reyes, 44; Jose Rendon-Garcia, aka Gusano, 32; Felix Rojas, 45; and Severiano Martinez-Rojas, 50, were arraigned before U.S. Magistrate Judge James Orenstein of the Eastern District of New York on a 27-count indictment following their extradition from Mexico. The indictment, which was unsealed on Nov. 19, 2015, charges eight defendants with racketeering and racketeering conspiracy involving predicate acts of sex trafficking by force, fraud and coercion; sex trafficking of minors; interstate prostitution; alien smuggling; money laundering and related offenses. Three co-defendants charged in the same indictment, Saul Rendon-Reyes, aka Satanico, 37; Francisco Rendon-Reyes, aka Pancho, 27; and Odilon Martinez-Rojas, aka Chino and Saul, 44, were arraigned in the Eastern District of New York on Nov. 19, 2015.
“Human trafficking is a heinous crime that preys upon the most vulnerable members of our society,” said Attorney General Lynch. “Today, as part of the Department of Justice’s ongoing efforts to end this appalling practice, we are proud to announce the extradition of five Mexican traffickers who smuggled women and girls into the United States as sex slaves. Our action would not be possible without the close cooperation of our partners in Mexican law enforcement, and I want to thank them for their ongoing commitment to working together to uphold the rule of law in both of our countries. Going forward, we will continue to stand with Mexico – and with all of our international partners – to end human trafficking and to bring all those who facilitate this crime to justice.”
“These five extraditions speak to the strong bilateral relationship and commitment between the United States and Mexico to holding those alleged to have engaged in the ruthless act of human trafficking accountable,” said Director Saldaña. “ICE Homeland Security Investigations (HSI) will continue leveraging all of its investigative capabilities to disrupt human trafficking syndicates no matter where in the world they operate.”
“Vindicating the rights of vulnerable individuals is among the highest priorities of the Department of Justice and the Civil Rights Division,” said Principal Deputy Assistant Attorney General Gupta. “The defendants are charged with operating a scheme across international borders to exploit young women and girls by prostituting them for the benefit of the defendants. We will work tirelessly to pursue justice for those held in modern-day slavery.”
“The extradition of these five defendants is an important step in our effort to bring some sense of closure to the victims of this terrible crime, and a testament to our resolve to end human trafficking,” said U.S. Attorney Capers. “Our commitment to prosecute sex traffickers and those who would enslave others is unwavering. We would like to extend our deep gratitude to the government of Mexico and our law enforcement partners who made it possible to bring these defendants to the United States so that we may seek justice for their victims.”
The indictment alleges that the defendants were members of an international criminal organization, identified in the indictment as the Rendon-Reyes Trafficking Organization, which engaged in sex trafficking and related criminal activity between December 2004 and June 2014 in Queens, New York; Atlanta; and Jemison, Alabama, among other locations. According to the allegations in the indictment, the defendants used force, threats of force, fraud and coercion to cause young women and girls from Mexico and Latin America to engage in prostitution in the United States.
Since 2009, the Department of Justice and HSI have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative aimed at strengthening high-impact prosecutions under both U.S. and Mexican law. The initiative is aimed at dismantling human trafficking networks operating across the U.S.-Mexico border, bringing human traffickers to justice, reuniting victims with their children and restoring the rights and dignity of human trafficking victims, held under the trafficking networks’ control. These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of more than 50 defendants in multiple cases in New York, Georgia, Florida and Texas since 2009, and numerous Mexican federal and state prosecutions of associated sex traffickers. The extraditions in this case are the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 65 defendants in sex trafficking cases and provided assistance to more than 130 victims, including 36 minors. In addition, through the Eastern District of New York’s anti-trafficking program, 18 children have been reunited with their victim-mothers.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
In announcing the extradition and arraignment, Attorney General Lynch, Director Saldaña, Principal Deputy Assistant Attorney General Gupta and U.S. Attorney Capers commended the HSI’s New York Office, the HSI Mexico Attaché Office, the Department of Justice’s Office of International Affairs, the State Department and the New York City Police Department for their assistance and praised the government of Mexico for its role in advancing bilateral anti-trafficking enforcement efforts.
The case is being prosecuted by Assistant U.S. Attorneys Taryn A. Merkl and Margaret Lee of the Eastern District of New York and Deputy Director Benjamin Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Rendon-Reyes et al Indictment
Arturo Puello of Queens, New York, Sentenced for Possessing Counterfeit United States CurrencyRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Arturo Puello, age 32, of Queens, New York, was sentenced on June 22, 2016 in the U.S. District Court in Brattleboro, Vermont, for possessing counterfeit United States currency. Judge J. Garvan Murtha sentenced Puello to five months imprisonment, followed by two years of supervised release. The Court based its sentence on an analysis of all the relevant sentencing factors, and Puello’s sentence of five months imprisonment was within the range recommended by the advisory federal sentencing guidelines.
The case began on May 16, 2015 when a Bellows Falls, Vermont police officer found Puello’s vehicle disabled on the side of Vermont Route 5. After speaking with Puello and other occupants of the disabled vehicle, police conducted a search of the vehicle, which resulted in the discovery of $15,000 in counterfeit United States currency in a compartment in the cargo area of the vehicle. Puello subsequently admitted to possessing the counterfeit notes and stated that he had received them from a man in New York and transported them to Vermont. Puello pled guilty in federal court to the charged offense on February 2, 2016.
The case against Puello was investigated by the United States Secret Service and the Bellows Falls Police Department.
The United States was represented in the case by Assistant United States Attorney Kunal Pasricha. Puello was represented by Assistant Federal Public Defendant David L. McColgin.
Albuquerque Businessman Pleads Guilty to Federal Tax Evasion ChargeRead the Press Release
ALBUQUERQUE – James E. Coleman, Jr., the former president and owner of Sneakerz, Inc., a corporation that operated “Sneakerz Sports Bar” in Albuquerque, N.M., pleaded guilty this morning in federal court to a tax evasion charge, announced U.S. Attorney Damon P. Martinez and Ismael Nevarez Jr., Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
Coleman, 58, was charged in Nov. 2014, in a four-count indictment alleging tax evasion and subscribing false tax returns charges. Counts 1 and 2 charged Coleman with evading $166,320.00 in federal corporate taxes in calendar years 2008 and 2009 by filing false tax returns that underrepresented his corporation’s taxable income. Count 1 charged Coleman with evading $90,661.00 in federal taxes by falsely claiming that his corporation had $621,064.00 in taxable income in calendar year 2008 despite knowing that the corporation had $886,128 in taxable income for that year. Count 2 charged him with evading $75,659.00 in federal taxes by falsely claiming that his corporation had $731,581.00 in taxable income in calendar year 2009 despite knowing that the corporation had $932,235.00 in taxable income for that year. Counts 3 and 4 charged Coleman with filing individual tax returns for calendar years 2008 and 2009 that falsely reported that Coleman received no dividend income and no business income during those two calendar years.
During today’s proceedings, Coleman pled guilty to Count 1 of the indictment and admitted evading a total of $1,045,939.00 in federal corporate and personal taxes between calendar years 2002 and 2009. In his plea agreement, Coleman acknowledged underrepresenting Sneakerz’s gross receipts to the IRS with the intention of evading his corporate tax liability. He also admitted falsely underrepresenting the income he derived from Sneakerz on his personal tax returns.
At sentencing, Coleman faces a maximum statutory penalty of five years in federal prison. Coleman also will be subject to an order requiring that he pay restitution in an amount to be determined by the court.
This case was investigated by the Albuquerque office of IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Jeremy Peña.
22 June 2016
Working with ICE, USMS to Apprehend Criminal AliensRead the Press Release
Over the course of three days, INTERPOL Washington collaborated with Immigration and Customs Enforcement (ICE) and the United States Marshals Service (USMS) in a multi-agency enforcement operation, known as Operation: Project Red II. The goal of the operation was to identify, locate, arrest, and remove criminal fugitive aliens in the United States.
The second iteration of the three-day sweep, which first took place in 2015, targeted aliens who are 1) currently at-large, 2) removable under U.S. immigration law, and 3) wanted for criminal prosecution or convicted of a criminal offense abroad. The USNCB and USMS supported ICE Enforcement and Removal Operations (ERO) agents to remove these fugitives, many of whom were subjects of INTERPOL Red Notices, which act as provisional international arrest warrants in many countries.
For its role, the USNCB collected, organized, and disseminated the INTERPOL information crucial for ICE to identify the operation’s targets, which allowed the agents and deputies to locate criminals they otherwise might never have known existed.
Woman Pleads Guilty for Impersonating FBI Agent in Connection with Lottery Fraud Scheme Based in JamaicaRead the Press Release
A 30-year-old woman pleaded guilty for her role in a Jamaica-based lottery fraud scheme, the Department of Justice announced today.
Vania Lee Allen pleaded guilty in the Southern District of Georgia to one count of conspiracy to commit wire fraud and false impersonation of an employee of the United States. Allen faces a maximum statutory sentence of five years in prison. A sentencing date has not been scheduled.
“Lottery fraud schemes operating from Jamaica targeting Americans typically get help from at least one co-conspirator in the United States,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Impersonating an FBI agent is just one way fraudsters convince innocent victims that the international lottery is legitimate. It isn’t. The Justice Department will actively pursue and charge those who participate in such criminal activity.”
As part of her guilty plea, Allen acknowledged that she and a co-conspirator in Jamaica sought to unlawfully enrich themselves through a fraudulent lottery scheme targeting an elderly resident of Evans, Georgia.
An indictment charging Allen was filed on March 3. As alleged in the indictment, Allen’s co-conspirator falsely informed the victim that he had won money in a lottery and instructed the victim to make payments to various people in order to collect the purported lottery winnings. As part of her plea agreement, Allen acknowledged in order to induce the victim to continue to make payments as directed by her co-conspirator, Allen traveled from Jamaica to the United States to meet with the victim personally and falsely portrayed herself to the victim as an FBI agent. Allen also acknowledged that when she met the victim, she falsely portrayed herself as a FBI agent, provided the victim with a cell phone, and directed him to speak with the person on the line, who was Allen’s co-conspirator in Jamaica.
“This conviction shows the extraordinary lengths fraudsters will use to rip off someone in the United States,” said U.S. Attorney Edward J. Tarver of the Southern District of Georgia. “Such schemes will not be tolerated, and we will prosecute fraudsters whether they operate from inside or outside of the United States.”
“The Postal Inspection Service is dedicated to investigating and combating international lottery schemes, especially since they prey on elderly Americans,” said Inspector in Charge David W. Bosch of the U.S. Postal Inspection Service’s Philadelphia, Pennsylvania Division. “The Postal Inspection Service is committed to uncovering and pursuing individuals involved in international lottery fraud schemes targeted at victims in the United States.”
This prosecution is part of the Department of Justice’s effort to work with federal and local law enforcement to combat fraudulent lottery schemes in Jamaica that prey on U.S. citizens. According to the U.S. Postal Inspection Service, Americans have lost tens of millions of dollars to fraudulent foreign lotteries.
The case was prosecuted by Trial Attorney Clint Narver of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney C. Troy Clark of the Southern District of Georgia. The case was investigated by the U.S. Postal Inspection Service and the Columbia County Georgia Sherriff’s Office.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Southern District of Georgia, visit its website at http://www.justice.gov/usao-sdga.
Western Pennsylvania’s U.S. Attorney’s Office Participates in Largest National Medicare Fraud Takedown in HistoryRead the Press Release
PITTSBURGH – Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today an unprecedented nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-three state Medicaid Fraud Control Units also participated in today’s arrests. In addition, the HHS Centers for Medicare & Medicaid Services (CMS) is suspending payment to a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in history, both in terms of the number of defendants charged and loss amount.
“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – It is a serious crime,” said Attorney General Loretta Lynch. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people – many of them in need of significant medical care. They promise effective cures and therapies, but they provide none. Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends. The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”
“Protecting citizens from health care fraud schemes that can devastate lives, undermine the integrity of our health care system and drive up costs for all consumers is a worthy priority for our office,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania. “By working cooperatively with the FBI, Health and Human Services Office of Inspector General and Pennsylvania Office of the Attorney General, our office is making good on its promise to crack down on health care fraud wherever we find it.”
Following is a list of recent health care fraud prosecutions handled by the U.S. Attorney’s Office for the Western District of Pennsylvania. Only the first case is included in the nationwide sweep statistics.
June 21, 2016: An information was unsealed charging Elizabeth A. Rotto, 46, of Cranberry Township, Pa., with embezzlement related to health care. The information alleges that Rotto embezzled funds in excess of $100 that belonged to Askesis Development Group, a subsidiary of the University of Pittsburgh Medical Center. A plea hearing is scheduled for tomorrow, June 23, at 2 p.m. before U.S. District Judge David Cercone.
AUSA Robert Cessar; Federal Bureau of InvestigationJune 13, 2016: An indictment was unsealed charging Daniel Garner, a dentist who practices in Pittsburgh, Pa., with distribution of Oxycodone, a Schedule II controlled substance, outside the usual course of professional practice, and omitting material information from required reports, records and other documents. According to the seven-count indictment, from Feb. 13, 2014 through June 11, 2015, Garner distributed Oxycodone on six occasions, a Schedule II controlled substance, outside the usual course of professional practice. The indictment further alleges that on Jan. 14, 2016, Garner omitted material information from an application for a Drug Enforcement Agency registration number.
AUSA Cindy K. Chung; Federal Bureau of Investigation and the Drug Enforcement AdministrationJune 2, 2016: Mary Ann Stewart, former chief operations officer of Horizons Hospice, LLC, pleaded guilty to one count of health care fraud. Horizons Hospice LLC, located in Monroeville, provided end-of-life hospice care to eligible patients. A significant number of patients were eligible for Medicare and Medicaid. Stewart admitted orchestrating a scheme whereby she caused her staff to place non-qualifying patients into hospice care that were not appropriate, and then recertified the patients for continued hospice care. JudgeMcVerry scheduled sentencing for Sept. 9, 2016.
AUSAs Robert S. Cessar and Nelson P. Cohen; Federal Bureau of Investigation, Pennsylvania Attorney General’s Office; Health & Human Services - Office of the Inspector GeneralMay 31, 2016: Kari Richards of Latrobe pleaded guilty to charges of healthcare fraud and obtaining prescription drugs through fraud. Richards, while addicted to prescription pain killers, caused Highmark to pay more than $600,000 in connection with claims in which she sought treatment over a 16-month period from more than 100 hospitals in 11 states on more than 300 occasions. Through this behavior, Richards obtained approximately 190 prescriptions for pain medications, including prescriptions for Oxycodone-Acetaminophen, Hydrocodone-Acetaminophen, Hydrocodone, and Oxycodone. As part of the scheme, Richards falsely represented the circumstances of injuries, which were mainly shoulder dislocations. She also misrepresented the medications that she received and her medical history. Judge Cohill scheduled sentencing for Sept. 7, 2016.
AUSA Brendan T. Conway; Federal Bureau of InvestigationMay 17, 2016: Samirkumar J. Shah was indicted on health care fraud charges. The indictment alleges that Shah knowingly and willfully executed and attempted to execute a scheme to defraud health care benefit programs, such as, Medicare, Medicaid, Highmark, UPMC and Gateway, in connection with the delivery of and payment for health care benefits, items and services.
AUSA Nelson P. Cohen; Federal Bureau of Investigation and the Pennsylvania Attorney General’s OfficeThe Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations and since its inception in March 2007 has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion.
Including today’s enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings. Today’s announcement marks the second time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.
The cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide - including the U.S. Attorney’s Office for the Western District of Pennsylvania - along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG, Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.
A complaint, indictment or information is merely a charge, and all defendants are presumed innocent unless and until proven guilty.
West Virginia man sentenced for unlawful possession of stolen firearmsRead the Press Release
CLARKSBURG, WEST VIRGINIA – John Basile, 65, of Blacksville, West Virginia was sentenced today to twelve months and one day in prison for unlawful possession of stolen firearms, United States Attorney William J. Ihlenfeld, II, announced.
Basile previously pled guilty to “Possession of Stolen Firearms” for selling stolen guns in Marion and Monongalia County in 2014.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge Irene M. Keeley presided.
West Palm Beach Man Sentenced for Illegally Transporting Undocumented AliensRead the Press Release
Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell has sentenced Yohany Hernandez-Hernandez (38, West Palm Beach) to three years in federal prison for illegally transporting undocumented aliens. A federal jury found him guilty in March 2016.
According to evidence presented at trial, on May 7, 2015, Hernandez-Hernandez was stopped by deputies from the Lee County Sheriff’s Office for committing a traffic infraction on I-75. During the traffic stop, the deputies became aware that he was transporting six undocumented aliens. Law enforcement later learned that Hernandez-Hernandez and the undocumented aliens had travelled from a safe house in Houston, Texas to Lee County. They had driven for approximately 22 hours, with limited stops, in an attempt to avoid being detected by immigration officials. The investigation further revealed that two other undocumented aliens had previously been dropped off in other parts of Florida. The aliens had been transported to further their stay in the United States and for Hernandez-Hernandez’s financial gain.
This case was investigated by the Lee County Sheriff’s Office and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). It was prosecuted by Assistant United States Attorney Michael C. Baggé-Hernández.
Two North Suburban Doctors Charged as Part of Largest National Medicare Fraud Takedown in HistoryRead the Press Release
CHICAGO — Two north suburban doctors have been charged as part of the largest national Medicare fraud takedown in history, federal authorities announced today.
Attorney General Loretta E. Lynch and Department of Health and Human Services Secretary Sylvia Mathews Burwell announced the unprecedented nationwide sweep that resulted in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-three state Medicaid Fraud Control Units participated in the takedown. In addition, the HHS Centers for Medicare & Medicaid Services (CMS) is suspending payment to a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in history, both in terms of the number of defendants charged and the loss amount.
“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – it is a serious crime,” said Attorney General Lynch. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people – many of them in need of significant medical care. They promise effective cures and therapies, but they provide none. Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends. The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”
Two registered Illinois physicians were charged as part of the investigations, announced Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
DR. YEVGENY ODESSKY, a physician with an office in Buffalo Grove, took cash kickbacks in exchange for referring patients to a home health care agency in the north suburbs, according to a criminal complaint filed last week in federal court in Chicago. Unbeknownst to Dr. Odessky, the owner of the agency was cooperating with federal authorities and had agreed to secretly record meetings with Dr. Odessky, according to the complaint. In one recorded meeting in Dr. Odessky’s clinic on April 26, 2014, Dr. Odessky agreed to accept $300 for each Medicare beneficiary he referred to the agency, according to the complaint. Speaking in Russian, Dr. Odessky is heard on the recording laughing while telling the agency owner, “Public Aid will choke,” according to the complaint.
Dr. Odessky, 66, of Highland Park, is charged with one count of violating the federal Medicare and Medicaid Anti-Kickback Statute, which is punishable by up to five years in prison and a fine of up to $250,000. A preliminary hearing in federal court in Chicago is scheduled for July 11, 2016, at 1:00 p.m.
DR. ZOYA KOSMAN, a physician with an office in Skokie, allegedly caused the submission of false medical evidence to help a claimant obtain federal disability benefits to which the claimant was not entitled. Dr. Kosman knowingly lied about the claimant’s complaints, symptoms, and functional abilities in documentation submitted in support of the claimant’s application for benefits, according to an indictment returned yesterday in federal court in Chicago.
The indictment charges Dr. Kosman, 58, of Skokie, with one count of making false statements in an application for federal benefits. The charge carries a maximum sentence of ten years in prison and a fine of up to $250,000. An arraignment in federal court in Chicago has not yet been scheduled.
The cases announced today were investigated by the national Medicare Fraud Strike Force, whose operations are part of the Health Care Fraud Prevention & Enforcement Action Team. Since its inception in March 2007, the Strike Force has charged more than 2,900 defendants who collectively have falsely billed the Medicare program more than $8.9 billion.
The Illinois cases are being prosecuted by the U.S. Attorney’s Office for the Northern District of Illinois. The government in Dr. Odessky’s case is represented by Assistant U.S. Attorney Nathalina A. Hudson, and in Dr. Kosman’s case by Special Assistant U.S. Attorney Jared C. Jodrey.
The national cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with agents from the Federal Bureau of Investigation, HHS-OIG, Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.
The public is reminded that charges are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Two Charged in Dothan, Alabama as Part of Largest National Medicare Fraud Takedown in HistoryRead the Press Release
Montgomery, Alabama – U.S. Attorney George L. Beck Jr., Alabama Attorney General Luther Strange, United States Attorney General Loretta E. Lynch, and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell, announced today an unprecedented nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-three state Medicaid Fraud Control Units also participated in today’s arrests. In addition, the HHS Centers for Medicare & Medicaid Services (CMS) is suspending payment to a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in history, both in terms of the number of defendants charged and loss amount.
“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – It is a serious crime,” said Attorney General Lynch. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people – many of them in need of significant medical care. They promise effective cures and therapies, but they provide none. Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends. The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”
As a part of the nationwide takedown, U.S. Attorney Beck and Attorney General Strange announce the arrests of two Dothan, Alabama-area residents on charges of defrauding the Alabama Medicaid Agency and the federal government by billing for counseling services that were never provided.
Catrina R. Copeland, 43, of Dothan, was the owner of The Counseling Place, a Dothan company that contracted with the Alabama Medicaid Agency to provide counseling services to at risk youth. Stephanie Govan, 41, a resident of Glenwood, was employed by Copeland as a counselor. Both were arrested on June 21, 2016 by agents of the Alabama Attorney General’s Medicaid Fraud Control Unit and the HHS’s Office of Inspector General.
A federal grand jury indicted Copeland and Govan in April of 2016 following an investigation by the Alabama Attorney General’s Medicaid Fraud Control Unit. The grand jury charges include counts against each individual for conspiracy to commit healthcare fraud. This alleged fraud is based upon evidence that indicates Copeland and Govan billed the Medicaid Agency for counseling services that were never actually provided. If convicted, each could be sentenced for up to ten years in prison.
An indictment merely alleges that crimes have been committed. The defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The Dothan, Alabama case was investigated by the Alabama Attorney General’s Medicaid Fraud Control Unit and the HHS’s Office of Inspector General. Assistant U.S. Attorney Jonathan S. Ross and Assistant Attorney General Bruce Lieberman are prosecuting the case.
“Health care fraud robs all of us by resulting in increased medical costs, health insurance premiums, and eventually, higher taxes,” stated U.S. Attorney Beck. “Medical providers need to know there is no ‘safe harbor’ from lying and cheating.”
“Those who choose to commit heath care fraud do so at the expense of the most vulnerable of our society who are dependent upon these programs,” said Attorney General Strange. “Protecting taxpayer resources is a high priority of my office and I am pleased to join the U.S. Attorney George Beck in targeting costly Medicaid fraud.”
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations and since its inception in March 2007 has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion.
Including today’s enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings. Today’s announcement marks the second time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.
The cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG, Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.
The court documents for each case will posted online, as they become available, here: https://www.justice.gov/opa/documents-and-resources-june-22-2016-medicare-fraud-strike-force-press-conference
Two Buffalo Men Sentenced on Crack Cocaine ChargesRead 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 Morrell Buster, 43, and William Jefferson, 46, both of Buffalo, NY, who were convicted of possession with intent to distribute, and distribution of crack cocaine, were sentenced to 51 months and 37 months in prison respectively by Senior U.S. District William M. Skretny.
Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that between June 2013 and February 25, 2014, the defendants purchased and then distributed crack cocaine. On January 17, 2014, Buster was found in possession of three grams of crack cocaine while at the Niagara Outlet Mall in Niagara County, NY.
The sentencings are the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen and the Lackawanna Police Department, under the direction of Chief James Michel.
Two Brothers Charged with Distributing Heroin Involved in OverdosesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration for New England, today announced that an investigation into a recent drug overdose death of a man in Monroe and a non-fatal overdose of a man in Bridgeport has resulted in federal heroin distribution charges against two brothers. The charges stem from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
ERICK DELGADO, 39, and his brother, ANORIS DELGADO, also known as “Alex,” 28, both of Bridgeport, were arrested yesterday on federal criminal complaints charging each with possession with intent to distribute, and distribution of, heroin, and conspiracy to distribute heroin. They appeared today before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and are detained. A detention hearing is scheduled for July 6.
As alleged in court documents, in the morning of April 25, 2016, Bridgeport Police and medical personnel responded to a location on Washington Avenue on a report of a possible drug overdose. The overdose victim was revived with two doses of Narcan and was transported to the hospital. A friend of the victim, who was with the victim at the time and contacted medical professionals after the overdose, told investigators that he and the victim purchased heroin from and individual he knew as “Eric” in the area of Brooks Street and Ogden Street in Bridgeport. The victim subsequently identified ERICK DELGADO as the source of the heroin he used.
It is also alleged that in the evening of April 25, 2016, Monroe Police and emergency medical personnel responded to a report of an unresponsive 48-year-old male at residence in Monroe. The victim was pronounced dead at the scene. A subsequent interview with an acquaintance of the victim revealed that, on April 25, the victim and his acquaintance traveled to the area of Brooks Street and Ogden Street where the victim purchased heroin from ERICK DELGADO.
It is further alleged that on May 3, 2016, an individual working with law enforcement contacted ERICK DELGADO to arrange the purchase of heroin. When the individual and an undercover officer arrived in the area of Brooks Street and Ogden Street, they were met by ANORIS DELGADO who subsequently provided them with 20 bags of heroin. The undercover officer purchased another 20 bags of heroin from ANORIS DELGADO on May 20.
U.S. Attorney Daly stressed that a complaint is only a charge and 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 matter is being investigated by the Drug Enforcement Administration’s New Haven Tactical Diversion Squad, and the Monroe and Bridgeport Police Departments. The Task Force includes participants from the New Haven, Hamden, Greenwich, Shelton, Bristol, Vernon, Wilton, Milford, Monroe, Fairfield and Middlebury Police Departments, and the Connecticut State Police. The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
Twelve Charged in Dallas as Part of Largest National Medicare Fraud Takedown in HistoryRead the Press Release
DALLAS – Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today an unprecedented nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-three state Medicaid Fraud Control Units also participated in today’s arrests. In addition, the HHS Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in the history of the Medicare Fraud Strike Force, both in terms of the number of defendants charged and loss amount.
“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – It is a serious crime,” said Attorney General Loretta Lynch. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people – many of them in need of significant medical care. They promise effective cures and therapies, but they provide none. Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends. The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”
“The charges announced today in Dallas are an example of the outstanding investigative work by this district’s Medicare Fraud Strike Force that has been in operation since 2011,” said U.S. Attorney John Parker of the Northern District of Texas. “Medicare and Medicaid fraud not only increases health care costs, but it victimizes the elderly and those who may be vulnerable. This office and its Strike Force will continue to aggressively target, investigate and prosecute anyone trying to defraud these crucial programs.”
Nine of the 12 defendants charged in north Texas were charged in connection with three separate home health care schemes. The other three defendants were charged in another indictment related to hearing-related health care services.
One indictment charges three employees of Elder Home Health Services (ElderCare) with conspiracy to commit health care fraud. Celestine Okwilagwe, aka “Tony Okwilagwe, 48, the owner, and Paul Emordi, 50, a supervisor, allegedly operated ElderCare, a Medicare and Medicaid provider in Garland, Texas, when both were previously excluded from participating in any federal health care benefit program. Adetutu Etti, 58, an administrator for ElderCare, allegedly concealed Okwilagwe and Emordi’s exclusions from Medicare and Medicaid. According to the indictment, from approximately January 2013 through May 2016, Okwilagwe billed Medicare and Medicaid more than $3.4 million for claim reimbursements to which it was not entitled.
In a superseding indictment, the physician owner of Molina Medical Housecall Services, PA, dba U.S. Medical Housecall Services, PA, Hector Molina, 51, of Irving, Texas, and four others are each charged with one count of conspiracy to commit health care fraud. In addition to Dr. Molina, others charged in the conspiracy include Blanca Mata, 47, of Forney, Texas; Lidia Antonio, 56, also of Irving; Ivan Castilleja, 38, of Dallas; and George Richard Rivaux, 43, of San Antonio, Texas. Molina is also charged with 11 counts of health care fraud and one count of aggravated identity theft. Housecall Services employees Mata, Antonio and Rivaux are also each charged with two counts of health care fraud. According to the indictment, from approximately January 2010 through April 2015, Molina and others caused Medicare to be falsely billed $28.6 million for care plan oversight.
In the last home health scheme, physician assistant Shawn Chamberlain of Collin County, Texas, is charged in an information with one count of conspiracy to commit health care fraud. Chamberlain, who was also part-owner of Boomer House Calls (Boomer), hired a physician to apply for a Medicare number to allow him to bill Medicare for physician home visits and to sign false physician certifications for home health care. Chamberlain provided these false physician certifications for home health to Timely Home Health Services, Inc. in Dallas from approximately August 2013 through September 2015. Chamberlain and his co-conspirators caused Medicare to be billed approximately $1.6 million for false certifications, unnecessary home health services and unnecessary physician home visits.
In the remaining indictment, three family members from Garland, Harlan R. Hill, 52; his wife Latecia P. Hill, 50; and her mother, Pearle L. Madere, 71; were each charged with one count of conspiracy to commit health care fraud and 14 counts of health care fraud. Harlan Hill owned and operated Total Senior Ear Care (TSEC); Latecia Hill served as its administrator; and Pearle Madere ran day-to-day operations. TSEC, whose offices were located in Dallas, provided hearing-related services to Medicare beneficiaries living in nursing homes. These hearing services, however, were not provided and were fraudulently billed to Medicare for reimbursement. In fact, this fraudulent business, created by Harlan and Latecia Hill and Pearle Madere caused Medicare to pay TSEC more than $5.1 million for services never rendered or necessary. The indictment also includes a forfeiture allegation that would require Harlan and Latecia Hill, upon conviction, to forfeit their home in Garland, as well as a Mercedes-Benz and a Maserati Quattraporte.
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations and since its inception in March 2007 has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion.
Including today’s enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings. Today’s announcement marks the second time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 40 defendants charged in this takedown.
An indictment/information is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, however, each count of conspiracy to commit health care fraud and substantive health care fraud count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.
The cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG, Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.
Assistant U.S. Attorneys Kate Pfeifle and Adrienne Frazior of the Northern District of Texas and Trial Attorney Jason Knutson of the Criminal Division’s Fraud Section are prosecuting the cases filed in the Northern District of Texas.
The court documents for each case will posted online, as they become available, here: https://www.justice.gov/opa/documents-and-resources-june-22-2016-medicare-fraud-strike-force-press-conference.
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Tonawanda Man Pleads Guilty to Production of Child PornographyRead 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 Jason M. Smith, 35, of Tonawanda, NY, pleaded guilty to production of child pornography before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 60 years in prison, a fine of $250,000, or both.
“This case vividly demonstrates the dangers faced by children in both the real and virtual worlds,” said U.S. Attorney Hochul. “At the same time, let today’s conviction and likely lengthy jail sentence be a warning to sexual predators, whether online or on the street, that this Office will find you and prosecute you to the fullest extent of the law.”
Assistant U.S. Attorney Scott S. Allen, Jr., who is handling the case, stated that on April 11, 2014, the Lancaster Police Department executed a search warrant at Smith’s residence on Byron Avenue in Tonawanda. During the search, officers seized external hard drives. Subsequent examination by the Western New York Regional Forensic Laboratory determined that the defendant was producing child pornography at his residence.
The investigation determined that between 2010 and 2012, Smith coerced Victim 1, who was less than 12 years old, to engage in sexually explicit conduct and produced a visual depiction of the conduct. The defendant was a friend of Victim 1’s father.
In addition, between July 2011 and September 2013, Smith coerced Victim 2, a 15 year old girl he met on MeetMe.com, to engage in sexual intercourse and took pictures of the conduct.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the Lancaster Police Department, under the direction of Chief Gerald J. Gill, Jr., and the Cheektowaga Police Department, under the direction of Chief David Zack.
Sentencing is scheduled for October 19, 2016 at 2:00 p.m. before Judge Skretny.
Texas Man Admits Trying to Coerce a Minor to Have Sex with HimRead the Press Release
PITTSBURGH - A resident of Arlington, Texas, pleaded guilty in federal court to a charge of attempted coercion and enticement of a minor to engage in illegal sexual activity, United States Attorney David J. Hickton announced today.
Ray Wickliffe Howland, 56, of Arlington, Texas, pleaded guilty before Senior United States District Judge Gustave Diamond.
In connection with the guilty plea, on or about June 25, 2015, Howland used facilities and means of interstate and foreign commerce, specifically a computer, an iPad, the Internet and the telephone, to knowingly attempt to persuade, induce, entice, and coerce a minor to engage in sexual activity.
Senior United States District Judge Gustave Diamond scheduled the sentencing for Oct. 19, 2016, at 11 a.m. The law provides for a mandatory minimum sentence of 10 years, a maximum total sentence of life in prison, a fine of $750,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Office of the Pennsylvania Attorney General and the Federal Bureau of Investigation conducted the investigation that led to the prosecution of Howland.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Tennessee Couple Indicted for $86,511 Veterans’ Unemployment Compensation Benefit FraudRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Tennessee couple have been indicted for fraudulently obtaining $86,511 in veterans’ unemployment compensation benefits.
According to United States Attorney Peter Smith, Earl Lafayete Hall, III, age 35, and his wife, Renita Blunt, age 31, both of Arlington, Tennessee, are charged in a Superseding Indictment with mail fraud, money laundering, aggravated identity theft, and conspiracy to commit mail fraud.
According to the Superseding Indictment, with Blunt’s assistance, Hall allegedly applied for veteran’s unemployment compensation benefits under the false name and identity of 8 individuals. The bogus applications were submitted via the internet to the Pennsylvania Department of Labor & Industry in Harrisburg and the Hawaii Department of Labor & Industrial Relations in Honolulu between January 2013 and July 2014.
Hall and Blunt allegedly received the benefits under the Unemployment Compensation for Ex-Service Members Program, commonly known as “The UCX Program,” a federally-funded U.S. Department of Labor program administered by the individual states. Under this federal-state partnership, the states pay out unemployment insurance benefits to the veterans based on the claimed residence of the veteran, and are subsequently reimbursed by branches of the military. Benefits are based upon the military wages and pay grade of the serviceman at the time of his or her separation from military service. There is no payroll deduction for UCX unemployment insurance protection.
The Indictment alleges that Hall and Blunt caused 12 Pennsylvania benefit checks to be mailed to two addresses in western Pennsylvania (Sarver and New Kensington, Pa) and to another address in Joliet, Illinois. The Indictment also alleges that $43,224 of the fraudulently obtained benefits was deposited into a bank account Hall controlled in Illinois, and that $4,900 in cash was subsequently removed from the account via multiple ATM transactions. The cash withdrawals form the basis of the money laundering counts in the Indictment.
Hall was previously indicted by a Middle District of PA grand jury on March 2, 2016 on charges involving the same scheme. Following his arrest in Tennessee on March 7, 2016, and following an appearance in Harrisburg before US Magistrate Court Judge Martin C. Carlson on March 15, 2016, Hall was released to home detention. Today’s Superseding Indictment adds Blunt as a codefendant and eight new charges (six counts of Aggravated Identity Theft and one count of Conspiracy to commit Mail Fraud). No hearing date has yet been set for either Hall or Blunt on the charges.
The investigation is being conducted by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering & Fraud Investigations, U.S. Defense Criminal Investigative Service, U.S. Postal Inspection Service with assistance from Pennsylvania Department of Labor and Industry, Internal Audits Division, Pennsylvania Department of Labor and Industry, Office of Unemployment Compensation Benefits and Policy, and the Pennsylvania Department of the Treasury, Office of Unemployment Compensation Disbursements. The case is being prosecuted by Assistant U.S. Attorney Kim Douglas Daniel.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty for each count under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Tampa Man Pleads Guilty to Role in Stolen Identity Tax Refund SchemeRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Cedric Clark (35, Tampa) has pleaded guilty to one count of mail fraud, one count of conspiracy, and one count of aggravated identity theft. He faces a maximum penalty of 20 years in federal prison on the mail fraud count, up to 5 years’ imprisonment on the conspiracy count, and a mandatory consecutive term of 2 years for the aggravated identity theft charge.
According to the plea agreement, between October 2010 and June 2013, Clark engaged in a fraud scheme with individuals who had obtained the Personal Identification Information (PII) of more than 1,158 individuals and then had filed false and fraudulent income tax returns in their names, seeking large tax refunds. Clark controlled a post office box where many of the refund checks were mailed. He also controlled numerous bank accounts at various financial institutions where the IRS had wired the tax refunds requested in those fraudulent tax returns. The IRS paid a total of $637,621.62 to accounts that Clark controlled. The scheme involved the filing of many more returns that the IRS did not accept.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the U.S. Postal Inspection Service. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.
Syracuse Area Physician to Pay Civil Penalty for Violating the Controlled Substances ActRead the Press Release
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian announced that his office reached a $30,000 civil settlement with Dr. Anthony A. Ascioti, a Fayetteville, New York anesthesiologist. The settlement was in connection with violations of the Controlled Substances Act. Dr. Ascioti’s Drug Enforcement Administration (DEA) number, which enabled him to prescribe controlled substances, has expired and he has not sought to renew it.
In 2015, the New York State Police (NYSP) and the New York State Bureau of Narcotic Enforcement (BNE) received information that an individual was receiving significant amounts of Adderall[1] using prescriptions signed by Dr. Ascioti on prescription pads from the Anesthesiology Department at St. Joseph’s Hospital. A subsequent investigation revealed that the individual to whom the prescriptions were given was not a patient of St. Joseph’s Hospital and that Dr. Ascioti was not working at that hospital at the time. Dr. Ascioti had also previously worked in the Anesthesiology Department at Auburn Memorial Hospital, but he had not worked there for six years. The individual receiving the prescriptions was also not a patient at Auburn Memorial Hospital. Moreover, the Adderall prescriptions were not related to anesthesiology services.
The investigation revealed that from January 20, 2012 to October 24, 2014, Dr. Ascioti issued 38 controlled substance prescriptions for the individual which were outside the scope of his usual course of professional practice. In addition, Dr. Ascioti failed to maintain records or a patient file for the individual in connection with these prescriptions.
Pursuant to federal regulations, a prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by a practitioner acting in the usual course of his or her professional practice. When Dr. Ascioti issued these prescriptions he did not meet these requirements since he did not prescribe this individual Adderall in connection with his practice as an anesthesiologist at either St. Joseph’s Hospital or Auburn Memorial Hospital.
The Controlled Substances Act was enacted to ensure that controlled substances are properly regulated and to help prevent drug diversion. Prescription drug abuse is a significant nationwide issue. According to U.S. Attorney Hartunian, his office will aggressively pursue those who engage in drug diversion, especially if they are healthcare providers. “It simply is unacceptable for medical professionals to act irresponsibly when handling controlled substances. The potential for these substances to end up in the wrong hands is something we are not willing to risk, and we will use whatever tools are available to prevent this from happening.”
The case was investigated by the NYSP, BNE and the DEA’s Diversion Unit in Syracuse, New York. The United States was represented by Assistant U.S. Attorney Thomas Spina Jr.
[1] Adderall is commonly prescribed to treat attention deficit hyperactivity disorder and narcolepsy. It is also used to enhance cognitive functions, promote athletic performance, to produce feelings of euphoria and as an aphrodisiac.
Steuben Man Pleads Guilty to Possession of a Firearm by a FelonRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Aaron C. Robinson, 51, of Steuben, Maine pleaded guilty today in U.S. District Court to being a felon in possession of a firearm.
Court records show that on November 16, 2015, the Maine Warden Service (MWS) found the defendant with a Savage .308 rifle hunting dear with bait from a tree stand in Steuben. The defendant had prior Maine state court felony convictions for terrorizing, violations of conditions of release, possession of a firearm by a felon, burglary and aggravated criminal mischief.
Robinson faces up to 10 years in prison and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the MWS and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Stamford Woman Charged with Operating Health Care Fraud SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that ELENA ILIZAROV, 43, of Stamford, was arrested yesterday on a federal criminal complaint alleging that she used stolen identity information to operate a health care fraud scheme. ILIZAROV owned and operated Advanced Dentistry, a dental practice located in Stamford.
ILIZAROV appeared before U.S. Magistrate Judge Sarah A.L. Merriam in New Haven and was released on a $500,000 bond, with the requirement that ILIZAROV wear a GPS monitoring device.
The complaint alleges that, beginning in approximately 2005, ILIZAROV fraudulently obtained the personal identifying information of a retired dentist and used that information to bill insurance companies through Advanced Dentistry for dental care allegedly performed by the retired dentist.
The alleged scheme resulted in losses of more than $1.1 million to the various health insurance companies.
The charge of wire fraud carries a maximum term of imprisonment of 20 years.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Department of Health and Human Services – Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Sarala V. Nagala and David J. Sheldon.
“This alleged scheme victimized a retired dentist who had his identity stolen, as well as multiple insurance companies that paid more than a million dollars in fraudulent claims,” said U.S. Attorney Daly. “Health care insurance fraud schemes ultimately increase health care costs for all of us, and the U.S. Attorney’s Office and our federal and state investigative partners are committed to uncovering all of them to ensure that justice is done.”
U.S. Attorney Daly noted that this announcement is made as part of a national health care fraud takedown.
Earlier today, Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced an unprecedented nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against 300 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-two state Medicaid Fraud Control Units also participated in today’s arrests. In addition, the HHS Centers for Medicare & Medicaid Services (CMS) is suspending payment to a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in history, both in terms of the number of defendants charged and loss amount.
“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – It is a serious crime,” said Attorney General Loretta Lynch. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people – many of them in need of significant medical care. They promise effective cures and therapies, but they provide none. Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends. The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations and since its inception in March 2007 has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion.
Including today’s enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings. Today’s announcement marks the second time that districts outside of Strike Force locations – including the District of Connecticut – participated in a national takedown, and they accounted for 82 defendants charged in this takedown.
U.S. Attorney Daly encourages individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at (203) 777-6311 or 1-800-HHS-TIPS.
Southport Man Sentenced to Prison for Failing to Pay Taxes on Money He Stole from BenefactorRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ORVAL FURLONG, 73, of Southport, was sentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to five months of imprisonment, followed by one year of supervised release, for failing to pay taxes on money he stole from a benefactor. FURLONG also was ordered to perform 200 hours of community service.
According to court documents and statements made in court, FURLONG was a life-long friend of a wealthy benefactor and, over the years, the benefactor paid some of FURLONG’s debts. During the last years of the benefactor’s life, FURLONG hired home health aides to care for the benefactor. During this time, the benefactor provided FURLONG with a stipend of approximately $8,000 to $10,000 per month. The benefactor also employed the services of an attorney who acted as the benefactor’s power of attorney and oversaw the benefactor’s finances. FURLONG provided the attorney with a detailed itemization of the hours worked by the home health aides, the hourly rates for their services, and the total funds needed to pay them for the services provided. The attorney then issued FURLONG checks from one of the benefactor’s bank accounts to pay the health aides.
From at least 2009 to 2011, FURLONG routinely inflated the applicable hourly rate paid to the home health aides. FURLONG then paid the home health aides in cash or by check in an amount significantly lower than FURLONG had represented to the attorney. FURLONG kept the difference and used the funds for his personal expenditures.
On February 22, 2016, FURLONG pleaded guilty to one count of tax evasion and admitted that he failed to report more than $500,000 in stolen income on his 2009 through 2011 federal tax returns.
FURLONG has paid $105,693 in back taxes.
This case was investigated by the Internal Revenue Service – Criminal Investigation Division and was prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
South Williamsport Woman Charged with Embezzling Money from Post OfficeRead the Press Release
WILLIAMSPORT – The United States Attorney’s Office for the Middle District of Pennsylvania announced the filing of a Criminal Information yesterday charging Lori Regel-Childs with misappropriation of funds from the U.S. Post Office in South Williamsport, Pennsylvania.
According U.S. Attorney Peter Smith, Regel-Childs, age 52, allegedly took approximately $11,611 from the South Williamsport Post Office while working there as the lead sales and service associate from October 2014 through December 2015. Regel-Childs allegedly took the proceeds of cash postage stamp sales, funds from her cash drawer, and money from the unit cash reserve at the Post Office. She also removed cash from her assigned cash drawer and the cash reserve to pay her personal bills and expenses. Regel-Childs is a resident of South Williamsport.
Under the terms of a plea agreement filed with the criminal information, Regel-Childs has agreed to enter a guilty plea and pay restitution. The plea agreement is subject to the approval of the court.
This matter was investigated by the Office of Inspector General, United States Postal Service. Assistant U.S. Attorney George J. Rocktashel has been assigned to the prosecution of this matter.
Criminal informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Shippensburg Man Sentenced to Federal Prison on Heroin Trafficking ChargesRead the Press Release
HARRISBURG –The United States Attorney’s Office for the Middle District of Pennsylvania announced that Jonathan Santana, age 35, of Shippensburg man was sentenced today to 14 years imprisonment by U.S. District Court Judge Sylvia H. Rambo in Harrisburg.
According to United States Attorney Peter Smith, Santana pleaded guilty on January 13, 2016 to distributing more than 100 grams of heroin and criminal conspiracy. Co-defendants Angelo Harrison and Dorothy Washington, also of Shippensburg, have also pled guilty in federal court before Judge Rambo and are both awaiting sentencing.
The investigation was conducted by the Drug Enforcement Administration Offices in Harrisburg and Hagerstown, Maryland, the Pennsylvania State Police, and the Cumberland and Franklin County Drug Task Forces. The case was prosecuted by Assistant United States Attorney William A. Behe.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines. The Judge is required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs.
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Seven Charged in Puerto Rico as part of Largest National Medicare Fraud Takedown in HistoryRead the Press Release
SAN JUAN, Puerto Rico – Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today an unprecedented nationwide sweep led by the Medicare Fraud Strike Force in 36 federal districts, resulting in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-three state Medicaid Fraud Control Units also participated in today’s arrests. In addition, the HHS Centers for Medicare & Medicaid Services (CMS) is suspending payment to a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in history, both in terms of the number of defendants charged and loss amount.
“As this takedown should make clear, health care fraud is not an abstract violation or benign offense – It is a serious crime,” said Attorney General Loretta Lynch. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people – many of them in need of significant medical care. They promise effective cures and therapies, but they provide none. Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends. The Department of Justice is determined to continue working to ensure that the American people know that their health care system works for them – and them alone.”
“The defendants charged today received moneys from services that were not rendered or care that wasn’t needed,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “Our office will continue to work with our federal, state and local law enforcement partners and focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives.”
On June 15, 2016, a Federal grand jury returned an indictment charging Arlene Carlo-Montalvo with 48 counts of theft or embezzlement in connection with health care, 48 counts of wire fraud, two counts of misuse of social security number, and two counts of aggravated identity theft.
The charges stem from Carlo-Montalvo’s role in a scheme or artifice to defraud Medical Card System Inc., also known as MCS, in the amount of $219,508.56, by means of fraudulent pretenses and using social security numbers assigned to other persons. Carlo-Montalvo, as an employee of MCS, created a fictitious vendor and would manipulate the system to submit false invoices for services not rendered. The agencies in charge of the investigation are Social Security Administration- Office of Inspector General and Homeland Security Investigations.
Another six individuals are facing civil actions for fraudulently obtaining the benefits with the submission of false information and with salaries that exceeded $50,000.00. Specifically, during 2015, the individuals fraudulently enrolled in the Medicaid health care benefit program, by providing false statements and representations regarding eligibility criteria, such as income, among others. By misrepresenting core eligibility requirements during the enrollment process they were able to fraudulently obtain health care services for which they would otherwise be ineligible, and causing several unique premium payments to be submitted as false claims.
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations and since its inception in March 2007 has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion.
Including today’s enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings. Today’s announcement marks the second time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.
The cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG, Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.
A complaint or indictment is merely a charge, and all defendants are presumed innocent unless and until proven guilty.
The court documents for each case will posted online, as they become available, here: https://www.justice.gov/opa/documents-and-resources-june-22-2016-medicare-fraud-strike-force-press-conference.
Senior Auction Official at Beverly Hills Auction House Sentenced to Prison for Wildlife TraffickingRead the Press Release
Joseph Chait, 38, of Beverly Hills, California, the senior auction administrator of I.M. Chait Gallery, located in Beverly Hills, was sentenced today to one year and one day in prison and a $10,000 fine for conspiring to smuggle wildlife products made from rhinoceros horn, elephant ivory and coral with a market value of at least $1 million, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney Preet Bharara for the Southern District of New York and Director Dan Ashe for the U.S. Fish and Wildlife Service (FWS). On March 9, Chait pleaded guilty to a two-count Information before U.S. District Judge J. Paul Oetken for the Southern District of New York, who imposed today’s sentence.
“Conspiring in the trafficking endangered wildlife is a serious crime, and those involved in the auction industry should take note that facilitating this trade can result in prison,” said Assistant Attorney General Cruden. “The African Elephant, the rhinoceros, and coral are all deeply threatened species that have undergone dramatic losses in recent decades as the trade in them has become highly lucrative. We must stop this trade, and we will vigorously investigate and prosecute those engaged in it.”
“By illegally trafficking in wildlife, including rhinoceros horns, Joseph Chait and his co-conspirators have fueled the illegal trade in endangered wildlife,” said U.S. Attorney Bharara. “Chait’s conduct, a federal crime for which he will now spend time in prison, threatened the already precarious existence of certain endangered species of animals.”
“As this investigation by U.S. Fish and Wildlife Service Special Agents demonstrates, United States citizens and businesses continue to be involved in international wildlife trafficking – facilitating and magnifying consumer demand for rhino horn, elephant ivory and other illegal products that is driving the slaughter of imperiled species in the wild,” said Director Ashe. “The stiff sentence and fines imposed today on Joseph Chait for his crimes serves notice to those engaged in similar criminal activity that their day of reckoning in court is coming.”
According to allegations contained in the Information and statements made in court filings and proceedings:
Chait and his co-conspirators engaged in illegal trafficking of wildlife with a market value of at least $1 million. Chait personally falsified customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood or plastic. For example, during Asia Week in New York City, New York, in or about March 2011, Chait was approached by an undercover special agent with FWS about the potential sale of a carving of Guanyin, an East Asian spiritual figure made from rhinoceros horn (the Rhino Carving). Despite knowing that it was not a genuine antique, Chait and his co-conspirators accepted the Rhino Carving for consignment, advertised the sale to foreign clients in China and put the Rhino Carving on the cover of I.M. Chait Gallery’s catalogue in connection with an auction of Asian art and antiques. After the Rhino Carving sold at auction for $230,000 to another undercover agent, Chait offered to make a false document for the buyer to help the buyer smuggle the item out of the country. The fake invoice falsely stated that the item cost $108.75 and was made of plastic.
Chait also sold rhinoceros ivory carvings to another customer and provided those carvings to that customer’s courier, even after learning that the customer had been arrested in China for smuggling ivory purchased from Chait’s auction house.
In addition to falsifying customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood or plastic, Chait and his co-conspirators conducted their wildlife smuggling using a variety of methods:
- Wildlife items were shipped to or picked up by third party shippers, who then re-shipped the items out of the country without the required declaration or permits.
- Members of the conspiracy provided packing materials to foreign wildlife buyers to assist them in hand carrying the wildlife out of the country.
- Foreign wildlife buyers were sold protected wildlife items without being assessed a state sales tax if they showed a foreign passport and itinerary for an international flight as proof the item would be leaving the country.
- Protected wildlife was smuggled into the United States without declaration or permits and then sold at auction by members of the conspiracy.
As a result of a recent Presidential Executive Order, trade in protected wildlife such as rhinoceros horn and elephant ivory has been significantly restricted in the last two years, except for those instances where sellers can prove that the item is a genuine antique that is more than 100 years old.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under U.S. and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.
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In addition to the term of prison, Chait was sentenced to three years of supervised release and was ordered to pay a $10,000 fine.
Assistant Attorney General Cruden and U.S. Attorney Bharara praised the efforts of FWS for its outstanding work in this investigation.
This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit and the Environmental Crimes Section of the Department of Justice. Assistant U.S. Attorneys Jennifer Gachiri and Elizabeth Hanft and Senior Litigation Counsel Richard A. Udell with the Environmental Crimes Section of the Department of Justice are in charge of the prosecution.
Senior Auction Official at Beverly Hills Auction House Sentenced to Prison for Wildlife TraffickingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and John C. Cruden, the Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, announced that JOSEPH CHAIT, the senior auction administrator of I.M. Chait Gallery, located in Beverly Hills, California, was sentenced today to one year and one day in prison and a $10,000 fine for conspiring to smuggle wildlife products made from rhinoceros horn, elephant ivory, and coral with a market value of at least $1 million. On March 9, 2016, CHAIT pled guilty to a two-count Information before U.S. District Judge J. Paul Oetken, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara stated: “By illegally trafficking in wildlife, including rhinoceros horns, Joseph Chait and his co-conspirators have fueled the illegal trade in endangered wildlife. Chait’s conduct, a federal crime for which he will now spend time in prison, threatened the already precarious existence of certain endangered species of animals.”
Assistant Attorney General John C. Cruden stated: “Conspiring in the trafficking of endangered wildlife is a serious crime, and those involved in the auction industry should take note that facilitating this trade can result in prison. The African Elephant, the rhinoceros, and coral are all deeply threatened species that have undergone dramatic losses in recent decades as the trade in them has become highly lucrative. We must stop this trade, and we will vigorously investigate and prosecute those engaged in it.”
According to allegations contained in the Information and statements made in court filings and proceedings:
CHAIT and his co-conspirators engaged in illegal trafficking of wildlife with a market value of at least $1 million. CHAIT personally falsified customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood, or plastic. For example, during Asia Week in New York City in or about March 2011, CHAIT was approached by an undercover special agent with the U.S. Fish & Wildlife Service about the potential sale of a carving of Guanyin, an East Asian spiritual figure, made from rhinoceros horn (the “Rhino Carving”). Despite knowing that it was not a genuine antique, CHAIT and his co-conspirators accepted the Rhino Carving for consignment, advertised the sale to foreign clients in China, and put the Rhino Carving on the cover of I.M. Chait Gallery’s catalogue in connection with an auction of Asian art and antiques. After the Rhino Carving sold at auction for $230,000 to another undercover agent, CHAIT offered to make a false document for the buyer to help the buyer smuggle the item out of the country. The fake invoice falsely stated that the item cost $108.75 and was made of plastic.
CHAIT also sold rhinoceros ivory carvings to another customer, and provided those carvings to that customer’s courier, even after learning that the customer had been arrested in China for smuggling ivory purchased from CHAIT’s auction house.
In addition to falsifying customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood, or plastic, CHAIT and his co-conspirators conducted their wildlife smuggling using a variety of methods:
-
Wildlife items were shipped to or picked up by third party shippers, who then re-shipped the items out of the country without the required declaration or permits.
-
Members of the conspiracy provided packing materials to foreign wildlife buyers to assist them in hand carrying the wildlife out of the country.
-
Foreign wildlife buyers were sold protected wildlife items without being assessed a state sales tax if they showed a foreign passport and itinerary for an international flight as proof the item would be leaving the country.
-
Protected wildlife was smuggled into the United States without declaration or permits, and then sold at auction by members of the conspiracy.
As a result of a recent Presidential Executive Order, trade in protected wildlife such as rhinoceros horn and elephant ivory has been significantly restricted in the last two years, except for those instances where sellers can prove that the item is a genuine antique that is more than 100 years old.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under U.S. and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (“CITES”), a treaty signed by over 170 countries around the world to protect fish, wildlife, and plants that are or may become imperiled due to the demands of international markets.
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In addition to the term of prison, CHAIT, 38, of Beverly Hills, California, was sentenced to three years of supervised release and was ordered to pay a $10,000 fine.
Mr. Bharara praised the efforts of the U.S. Fish and Wildlife Service for its outstanding work in this investigation.
This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit and the Environmental Crimes Section of the Department of Justice. Assistant United States Attorneys Jennifer Gachiri and Elizabeth Hanft, and Senior Litigation Counsel Richard A. Udell with the Environmental Crimes Section of the Department of Justice, are in charge of the prosecution.
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Prior Felon from Valencia County Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Johnny Sanchez, 39, of Los Lunas, N.M., pled guilty today in federal court in Albuquerque, N.M., to being a felon in possession of a firearm. Under the terms of his plea agreement, Sanchez will be sentenced to 72 months in federal prison followed by a term of supervised release to be determined by the court.
Sanchez was arrested on Sept. 9, 2014, on a federal indictment charging him with being a felon in possession of a firearm and possession of a stolen firearm. The indictment alleged that the crimes took place on May 29, 2013, in Valencia County, N.M.
During today’s proceedings, Sanchez pled guilty to the felon in possession of a firearm charge. In entering the guilty plea, Sanchez admitted that he was prohibited from possessing firearms on May 29, 2013, because of his previous felony convictions for aggravated battery with a deadly weapon and being a felon in possession of a firearm. Sanchez remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Los Lunas Police Department with assistance from the 13th Judicial District Attorney’s Office. Assistant U.S. Attorney Rumaldo R. Armijo is prosecuting the case.
Philadelphia Man Indicted on Gun ChargeRead the Press Release
Vernon Jones, 24, of Philadelphia, Pennsylvania was charged today by Indictment with possession of a firearm by a convicted felon, announced United States Attorney Zane David Memeger. According to the indictment, on or about April 12, 2016, in Philadelphia, Jones possessed a Beretta, Model BU9 Nano, 9mm pistol, and empty magazine that fit the pistol, and 14 spent 9mm cartridge casings, which had been ejected immediately outside of the residence from where the pistol was recovered.
If convicted the defendant faces a mandatory minimum sentence of 15 years in prison.
The case was investigated by the Philadelphia Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives and is being prosecuted by Assistant United States Attorney Yvonne Osirim.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Omaha Man Sentenced to Five Years for Child PornographyRead the Press Release
Andrew Soverns, 32, was sentenced in federal court for receiving child pornography. The Honorable Joseph F. Bataillon imposed a sentence of sixty (60) months’ imprisonment. There is no parole in the federal system. After his release from prison, Soverns will serve an additional five years of supervised release. Soverns was further ordered to pay $2,000 in restitution to each of two victims depicted in his collection of child pornography.
On August 19, 2015, a federal search warrant was served on Soverns’s residence in Omaha. Images of child pornography were located on three devices in the home. The children depicted in the images ranged from pre-teen to early teens. A total of 41 videos and 46 single images of child pornography were recovered.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Omaha FBI's Cyber Crime Task Force (CCTF).
North Carolina Man Charged with Possession with Intent to Distribute HeroinRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal Grand Jury in Harrisburg has returned an indictment charging Alshaqah Tariq Powell, age 43, with possession with intent to distribute heroin.
According to the United States Attorney Peter Smith, Powell, a resident of North Carolina, was traveling to Dauphin County on Interstate 81 when he was involved in a traffic stop leading to his arrest and discovery of the alleged heroin on November 3, 2015.
This matter was investigated by the Pennsylvania State Police and the Drug Enforcement Agency. Prosecution has been assigned to Assistant U.S. Attorney Chelsea Schinnour.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is forty years, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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New York City Pharmacy Owner Arrested for $8.5 Million Fraud as Part of Largest National Medicare Fraud Takedown in HistoryRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Scott J. Lampert, the Special Agent-in-Charge of the New York Office of the Department of Health and Human Services, announced today that SAJID JAVED was charged with participating in a health care fraud scheme that used nine pharmacies in Brooklyn and Queens, New York, through which JAVED submitted more than $8.5 million in fraudulent claims to Medicaid and Medicare. JAVED’s arrest is part of an unprecedented nationwide sweep led by the Medicare Fraud Strike Force, resulting in criminal and civil charges against 301 individuals, including 61 doctors, nurses, or other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. Twenty-three state Medicaid Fraud Control Units also participated in today’s arrests. In addition, the HHS Centers for Medicare & Medicaid Services (“CMS”) also suspended a number of providers using its suspension authority provided in the Affordable Care Act. This coordinated takedown is the largest in the history of the Medicare Fraud Strike Force, both in terms of the number of defendants charged and loss amount.
JAVED was arrested earlier today and is expected to be presented in Manhattan federal court later this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Sajid Javed induced others to forego their prescription medications for a kickback, and then fraudulently billed Medicare and Medicaid more than $8 million for the drugs that were never actually dispensed. This alleged scheme not only put patients at risk, it also contributed to the multibillion-dollar pillaging of federally funded public health care subsidies.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “These alleged criminals arrested around the country today and here in New York City are stealing money meant to help people seeking medical assistance. It’s not a visible theft in public view, but the victims of the crime suffer greatly when they can’t get the assistance they need. We are asking anyone who sees this sort of crime and fraud taking place to be vigilant, and report it to us at 1-800-CALL-FBI.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Prescription drug scams, such as the one alleged in this case, work to undermine our nation's health care system. Today’s arrests coordinated with our law enforcement partners serve as a stern warning to those who attempt to plunder government health programs meant to care for our most vulnerable citizens.”
As alleged in the Complaint and in other documents filed in Manhattan federal court[1]:
While owning and operating nine different pharmacies located in Brooklyn and Queens, SAJID JAVED conducted a multimillion-dollar scheme to defraud Medicare and Medicaid programs by seeking reimbursement for prescription drugs that were not distributed to customers. Specifically, from January 2013 through December 2014, JAVED obtained more than $8.5 million in reimbursements from Medicare and Medicaid for prescription drugs that his pharmacies never actually dispensed. JAVED defrauded Medicare and Medicaid into providing him with these reimbursements by obtaining prescriptions from other individuals, who were willing to forego delivery of the medications in exchange for a share of the reimbursed proceeds, in the form of kickbacks. JAVED offered to pay, and did actually pay, kickbacks in furtherance of this scheme.
Including today’s enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings. Today’s announcement marks the second time that districts outside Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (“HEAT”), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations and since its inception in March 2007 has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion.
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JAVED, 45, of Fresh Meadows, Queens, is charged with one count of health care fraud, which carries a maximum sentence of 10 years in prison, and one count of illegal remuneration in connection with a federal health care program, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and HHS-OIG.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Christopher DiMase and Sarah Paul are in charge of the prosecution.
The charges in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.