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22 June 2016
New Jersey Brothers Sentenced to Prison for Shipping More Than $1.9 Million Worth of Stolen CarsRead the Press Release
CAMDEN, N.J. – Two New Jersey men were each sentenced to more than 16 years in prison for their roles in a large-scale conspiracy to ship stolen luxury cars to Hong Kong and elsewhere, U.S. Attorney Paul J. Fishman announced.
Andrew Clarke, 43 of Irvington, New Jersey, and Llewellyn Clarke, 42 of North Plainfield, New Jersey, were sentenced to 300 and 195 months in prison, respectively. Both were previously convicted on all four counts of a superseding indictment charging them each with one count of conspiracy to transport stolen motor vehicles and three counts of transportation of stolen motor vehicles in interstate and foreign commerce. They were convicted following a three-week trial before U.S. District Judge Robert B. Kugler, who imposed the sentences today in Camden federal court.
According to documents filed in in this case and evidence presented at trial:
The stolen car exportation ring was investigated by a multi-agency task force led by Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The investigation revealed that the Clarkes were purchasing stolen luxury cars from thieves operating in northern New Jersey and New York.
The Clarke brothers then recruited other conspirators to “re-tag” those cars, or have fraudulent vehicle identification numbers placed on the cars to mask the fact that they were stolen, and then had false title documents produced for those cars in New Jersey and Georgia. After the fake documents were created, the Clarkes shipped several of those stolen cars, valued between $1.9 and $2.1 million, from New Jersey to Hong Kong, while other cars were shipped to Georgia, Maryland and elsewhere. Once overseas or out-of-state, the stolen cars were then re-sold, some to unsuspecting buyers who later learned that their vehicles were in fact stolen.
In addition to the prison terms, Judge Kugler sentenced both defendants to three years of supervised release.
U.S. Attorney Fishman credited special agents of ICE HSI, under the leadership of Executive Associate Director Peter Edge and Acting Special Agent in Charge Terence S. Opiola, and the N.J. State Police, under the direction of Superintendent Col. Rick Fuentes, for the investigation leading to today’s sentences. He also thanked U.S. Customs and Border Protection; the Waterfront Commission of New York Harbor; Essex County Prosecutor Carolyn Murray, Middlesex County Prosecutor Andrew C. Carey, Hudson County Prosecutor Esther Suarez, and Union County Acting Prosecutor Grace H. Park, the Essex and Hudson County Sheriff’s Departments, the Newark Police Department, the U.S. Coast Guard Investigative Service, the Port Authority of New York and New Jersey, the New Jersey Motor Vehicle Commission, the Georgia Department of Revenue, and the Maryland State Police for their roles.
The government is represented by Assistant U.S. Attorney José R. Almonte and James M. Donnelly of the U.S. Attorney’s Office Criminal Division in Newark
Defense counsel:
Andrew Clarke: Brian O’Malley Esq., Haddon Heights, New Jersey
Llewellyn Clarke: Paul Sarmousakis Esq., Avalon, New Jersey
National Health Care Fraud Takedown Results in Charges against 301 Individuals for Approximately $900 Million in False BillingRead the Press Release
Most Defendants Charged and Largest Alleged Loss Amount in Strike Force History
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.
Attorney General Lynch and Secretary Burwell were joined in the announcement by Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, FBI Associate Deputy Director David Bowdich, Inspector General Daniel Levinson of the HHS Office of Inspector General (OIG), Acting Director Dermot O’Reilly of the Defense Criminal Investigative Service (DCIS), and Deputy Administrator and Director of CMS Center for Program Integrity Shantanu Agrawal M.D.
The defendants announced today are charged with various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and prescription drugs. More than 60 of the defendants arrested are charged with fraud related to the Medicare prescription drug benefit program known as Part D, which is the fastest-growing component of the Medicare program overall.
“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.”
“Millions of seniors depend on Medicare for essential health coverage, and our action shows that this administration remains committed to cracking down on individuals who try to defraud the program,” said Secretary Burwell. “We are continuing to put new tools and additional resources to work, including $350 million from the Affordable Care Act, for health care fraud prevention and enforcement efforts. Thanks to the hard work of the Medicare Fraud Strike Force, we are making progress in addressing and deterring fraud and delivering results to help ensure Medicare remains strong for years to come.”
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare and Medicaid for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, Medicare beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of approximately $900 million in fraudulent billing.
“The Medicare Fraud Strike Force is a model of 21st-Century data-driven law enforcement, and it has had a remarkable impact on health care fraud across the country,” said Assistant Attorney General Caldwell. “As the cases announced today demonstrate, the Strike Force’s strategic approach keeps us a step ahead of emerging fraud trends, including drug diversion, and fraud involving compounded medications and hospice care.”
“These criminals target the most vulnerable in our society by taking money away from the care of the elderly, children and disabled,” said Associate Deputy Director Bowdich. “The FBI is committed to working with our partners and the public to stop fraud and ensure that healthcare dollars are used to help the sick, and not line the pockets of criminals.”
“While it is impossible to accurately pinpoint the true cost of fraud in federal health care programs, fraud is a significant threat to the programs’ stability and endangers access to health care services for millions of Americans,” said Inspector General Levinson. “As members of the joint Strike Force, OIG will continue to play a vital role in tracking down these criminals and seeing that justice is done.”
“DCIS, in partnership with our fellow federal investigative agencies, will continue to uncompromisingly investigate and bring to justice the people who perpetrate these criminal acts,” said Acting Director O’Reilly. “Their actions threaten to cripple our vital national health care industry, and place our citizenry at risk. We will remain vigilant.”
“Taxpayers and Congress provided CMS with resources to adopt powerful monitoring systems that fight fraud, safeguard program dollars, and protect Medicare and Medicaid,” said Deputy Administrator and Center for Program Integrity Director Agrawal. “The diligent use of innovative data analytic systems has contributed or led directly to many of the law enforcement cases presented here today. CMS is committed to its collaboration with these agencies to keep federally-funded health care programs safe and strong for all Americans.”
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.
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For the Strike Force locations, in the Southern District of Florida, a total of 100 defendants were charged with offenses relating to their participation in various fraud schemes involving approximately $220 million in false billings for home health care, mental health services and pharmacy fraud. In one case, nine defendants have been charged with operating six different Miami-area home health companies for the purpose of submitting false and fraudulent claims to Medicare, including for services that were not medically necessary and that were based on bribes and kickbacks. In total, Medicare paid the six companies over $24 million as a result of the scheme.
In the Southern District of Texas, 24 individuals were charged in cases involving over $146 million in alleged fraud. One of these defendants is a physician with the highest number of referrals for home health services in the Southern District of Texas. This physician has been charged with participating in separate schemes to bill Medicare for medically unnecessary home health services that were often not provided. Numerous companies that submitted claims to Medicare using the fraudulent home health referrals from the physician were paid over $38 million by Medicare.
In the Northern District of Texas, 11 people were charged in cases involving over $47 million in alleged fraud. In one scheme, a physician allowed unlicensed individuals to perform physician services and then billed Medicare as if he performed them. Additionally, the physician certified patients for home health care that was often medically unnecessary. Home health companies submitted approximately $23.3 million in billings to Medicare based on the physician’s fraudulent certifications.
In the Central District of California, 22 defendants were charged for their roles in schemes to defraud Medicare of approximately $162 million. In one case, a doctor was charged with causing almost $12 million in losses to Medicare through his own fraudulent billing, including performing medically unnecessary vein ablation procedures on Medicare beneficiaries.
In the Eastern District of Michigan, 19 defendants face charges for their alleged roles in fraud, kickback, money laundering and drug distribution schemes involving approximately $114 million in false claims for services that were medically unnecessary or never rendered. Among these are owners of a physical therapy clinic who lured patients through the payment of cash kickbacks and medically unnecessary prescriptions for Schedule II medications for the purpose of stealing more than $36 million from Medicare.
In Tampa, Orlando and elsewhere in the Middle District of Florida, 15 individuals were charged with participating in a variety of schemes including compounding pharmacy fraud and intravenous prescription drug fraud involving $17 million in fraudulent billing. In one case, the owner of several infusion clinics allegedly defrauded the Medicare program of over $8 million through a scheme involving reimbursement claims for expensive intravenous prescription drugs that were never purchased and never administered to patients.
In the Northern District of Illinois, six individuals were charged in cases related to three different schemes involving bribery and false and fraudulent claims for home health services and disability benefits. The charged defendants include individuals who owned or co-owned the fraudulent providers and a medical doctor. In total, these schemes resulted in over $12 million being paid to the defendants and their companies.
In the Eastern District of New York, 10 individuals were charged in six different cases, including five individuals who were charged for their roles in a scheme involving over $86 million in physical and occupational therapy claims to Medicare and Medicaid. In that case, the defendants are alleged to have filled a network of Brooklyn clinics that they controlled with patients by paying bribes and kickbacks. Once at the clinics, these patients were subjected to medically unnecessary therapy. The defendants then laundered the proceeds of the fraud through over a dozen shell companies.
In the Eastern District of Louisiana, three defendants were charged in connection with a health care fraud and wire fraud conspiracy involving a defunct home health care provider. This scheme centered on the payment of kickbacks through patient recruiters in exchange for patients who oftentimes never received nor qualified for home health care as billed. Once admitted, patient medical records were routinely fabricated and altered to support false and fraudulent claims to Medicare.
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In addition to the Strike Force, today’s enforcement actions include cases brought by 26 U.S. Attorney’s Offices, including the unsealing of search warrants in investigations being conducted by the Eastern District of North Carolina, Southern District of Georgia, District of Columbia, Eastern District of Texas, Southern District of West Virginia, Middle District of Louisiana, District of Minnesota, and the Northern District of Alabama.
In the Northern District of Georgia, nine defendants were charged for their roles in two health care fraud schemes involving $7 million in fraudulent billings. Eight defendants were charged in a scheme where bribes and kickbacks were allegedly paid to a state of Georgia official in exchange for falsifying applications and licensing requirements and recommending the approval of unqualified mental health providers.
In the Middle District of Alabama, two defendants were charged for their roles in a mental health services scheme allegedly involving $246,000 in fraudulent billings.
In the Middle District of Tennessee, a doctor was charged for his role in an illegal kickback scheme under which he allegedly referred patients to a certain DME supplier in exchange for cash kickbacks.
In the Western District of Kentucky, a business entity was charged for its role in a health care fraud scheme.
In the Southern District of Ohio, two defendants were charged for their roles in a $7.5 million home healthcare fraud scheme.
In the Western and Eastern Districts of Pennsylvania, three defendants were charged for their roles in drug diversion and embezzlement schemes.
In the Southern District of New York, a pharmacist was charged for his role in a scheme involving over $51 million in fraudulent Medicare and Medicaid billings.
In the Districts of Maine, Alaska, Kansas, Connecticut and Vermont, five defendants were charged for their roles in Medicaid-related schemes.
In the Eastern District of Missouri, four defendants, including a doctor and pharmacist, were charged for their roles in schemes involving over $3 million in billings.
In the Southern District of California, eight individuals were charged in health care-related cases. In one case, five individuals, including a doctor and a pharmacist, were charged in a scheme to pay bribes and kickbacks to doctors in exchange for prescribing expensive durable medical equipment and compound pain creams that were not medically necessary. The indictment alleges that approximately $27 million in false and fraudulent claims were submitted to insurers.
In the District of New Mexico, two defendants were charged for their roles in a Medicaid fraud scheme.
In the Northern District of Iowa, a settlement agreement was reached with a corporate entity for its role in a health care fraud scheme in a juvenile residential treatment facility.
In the District of Oregon, one defendant was charged for his role in a $1.7 million optometry services scheme.
In the District of Puerto Rico, civil demand letters were issued to six individuals for their roles in a scheme to defraud the Medicaid program.
In addition, in the states of Florida, Iowa, South Dakota, Indiana, New York, Michigan, Oklahoma, Rhode Island, Louisiana, Pennsylvania, New Hampshire, Oregon, Kentucky and Alaska, 49 defendants have been charged in criminal and civil actions with defrauding the Medicaid program and 57 sites were searched, pursuant to search warrants. These cases were investigated by each state’s respective Medicaid Fraud Control Units.
The cases announced today are being prosecuted and investigated by U.S. Attorneys’ 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.
The Affordable Care Act has provided new tools and resources to fight fraud in federal health care programs. The law provides an additional $350 million for health care fraud prevention and enforcement efforts, which has allowed the department to hire more prosecutors and the Strike Force to expand from two cities to nine. The act also toughens sentencing for criminal activity, enhances provider and supplier screenings and enrollment requirements and encourages increased sharing of data across government.
In addition to providing new tools and resources to fight fraud, the Affordable Care Act clarified that for sentencing purposes, the loss is determined by the amount billed to Medicare and increased the sentencing guidelines for the billed amounts, which has provided a strong deterrent effect due to increased prison time, particularly in the most egregious cases.
Since January 2009, the Justice Department’s Civil Division, along with U.S. Attorney’s Offices around the country, has recovered a total of more than $29.9 billion through False Claims Act cases, with more than $18.3 billion of that amount recovered in cases involving fraud against federal health care programs.
Moscow Man Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
COEUR D'ALENE - James Dale Pressnall, 50, of Moscow, Idaho pleaded guilty yesterday to possession of sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Pressnall was indicted by a federal grand jury in Coeur d'Alene on November 17, 2015.
According to the plea agreement, between December 2013, and February 2014, a Department of Homeland Security agent downloaded thirty-five child pornography files from a computer located in Moscow, Idaho. The computer was making the files available on a peer to peer network open to the general public. An internet service provider complied with a subpoena and advised that the computer distributing these images was located at Pressnall’s residence in Moscow, Idaho.
In March 2014, the Department of Homeland Security and the Moscow Police Department executed a federal search warrant at Pressnall’s residence. Pressnall was present during the search and admitted to using child pornography search terms to download child pornography over the internet. Several computers and computer storage devices were seized and the child pornography was located. The National Center for Missing and Exploited Children determined that Pressnall’s child pornography collection included images of minors from multiple states, including: Washington, Nebraska, Pennsylvania, California, Michigan, Connecticut, Delaware, Georgia, Florida, Vermont, Virginia, New York, and several foreign countries.
The charge of possession of sexually explicit images of minors is punishable by up to 10 years in prison, a maximum fine of $250,000.00, and up to lifetime supervised release.
Sentencing is set for September 7, 2016, before Chief United States District Judge B. Lynn Winmill at the federal courthouse in Coeur d'Alene.
The case was investigated through the collaborative effort of the Department of Homeland Security, Moscow Police Department, and Kootenai County Sheriff’s Office. These agencies 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.”
Montana Man Sentenced to Federal Prison for Sexual Exploitation of MinorsRead the Press Release
BISMARCK - US Attorney Christopher C. Myers announced that on June 22, 2016, Michael Leroy Simmons Sr., 55, Butte, Montana, was sentenced before US District Judge Daniel L Hovland to serve 25 years in federal prison. After pleading guilty to two counts of an indictment charging him with Sexual Exploitation of Minors, Simmons was also sentenced to serve a lifetime of supervised release and must pay a $200 special assessment to the Crime Victims Fund.
From on or about July 1, 2011, until about March 31, 2013, Simmons used a camera to take sexually explicit photographs and videos of minors under the age of ten. In many of the photographs, Simmons touched the minors in order to take the photographs. That camera belonging to Simmons was discovered by a relative while visiting him in Butte, Mt., and the camera was turned over to the Butte Montana Police Department. Simmons, who is a registered sex offender, pled guilty to sexual exploitation of a minor on March 24, 2016.
This case was investigated by the Federal Bureau of Investigation, Butte-Silver Bow Law Enforcement Department
Assistant US Attorney Brandi Russell prosecuted this case.
Monroe man sentenced to 77 months in prison for distribution of methamphetamineRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Monroe man was sentenced Monday to 77 months in prison for distributing methamphetamine.
Antonio D’Andre Holmes, 36, of Monroe, was sentenced by U.S. District Judge Robert G. James on one count of distribution of methamphetamine. He was also sentenced to three years of supervised release. According to the March 8, 2016 guilty plea, Holmes was recorded selling methamphetamine on August 13 and 25, 2015. A confidential informant picked up the illegal drugs at Holmes’ Monroe residence and paid a total of $3,180. The methamphetamine bought during the sales weighed a total of 47.8 grams.
The defendant was arrested as part of Organized Crime Drug Enforcement Task Force (OCDETF) Operation “River City Blues.” The DEA, the Louisiana State Police, and the Lufkin Police Department investigated the case. The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for targeting national and regional level drug trafficking organizations, coordinating the necessary law enforcement entities and resources to disrupt and dismantle the targeted criminal organization, and to seize its assets.
Assistant U.S. Attorney James G. Cowles Jr. prosecuted the case.
Med 1st of Evansville, P.C., Charged with Conspiracy to Commit Health Care Fraud, Conspiracy to Violate the Controlled Substance Act and Money LaunderingRead the Press Release
LOUISVILLE, Ky. – MED 1st of Evansville, P.C., located in Evansville, Indiana, was charged by Grand Jury Indictment today with conspiracy to commit health care fraud, health care fraud, and conspiracy to violate the Controlled Substance Act announced United States Attorney John E. Kuhn, Jr.
According to the four count indictment, beginning in January 2009, and continuing until at least May 2014, MED 1ST Of Evansville, P.C., conspired with others to commit health care fraud by causing the submission of false claims to Medicaid, Medicare, Anthem, and other insurance carriers.
Specifically, MED 1ST Of Evansville, P.C., knowingly and willfully executed a scheme to defraud health care benefit programs including Medicare, Medicaid, and Anthem, by directing staff members to provide medically unnecessary treatments to patients and fraudulently billing the health care benefit programs for the services. Claims were allegedly submitted for medically unnecessary facet block injections; conscious sedation, which was never performed; back braces, which were not medically necessary; and performing unnecessary tests for patients.
Further beginning on or about November 2011, and continuing until at least December 2012, MED 1ST Of Evansville, P.C., knowingly and intentionally conspired to distribute and dispense controlled substances in violation of the Controlled Substances Act. According to the indictment, Conspirator A, who was then a medical practitioner and Drug Enforcement Administration registrant, signed blank prescription pads and permitted individuals, acting at the direction of Conspirator B, who were not Drug Enforcement Administration registrants, to conduct evaluations of patients and to use these pre-signed prescription pads to prescribe medication to the patients.
Further, MED 1ST Of Evansville, P.C., conspired to commit money laundering by using the proceeds from a specified unlawful activity (health care fraud and unlawful distribution and dispensing of controlled substances) to promote and conceal that activity, and to engage in monetary transactions greater than $10,000 with proceeds derived from that specified unlawful activity.
Further, MED 1ST Of Evansville, P.C., is subject to forfeiture of any and all property constituting or derived from any proceeds the defendants obtained, directly or indirectly, as a result of the these violations, and any and all property used or intended to be used in any manner or part to commit and to facilitate the commission of these violations.
This case is being prosecuted by Assistant United States Attorneys Lettricea Jefferson-Webb and Jessica Malloy. This case is being investigated by the United States Drug Enforcement Administration, U.S. Department of Health and Human Services Office of Inspector General, Internal Revenue Service, Indiana Attorney General’s Office and Kentucky Attorney General’s Office.
McCracken County, Kentucky, Physician Charged with Fraudulent Possession of A Controlled Substance, Wire Fraud and Making False Statements Related to Health Care MattersRead the Press Release
PADUCAH, Ky. – A McCracken County, Kentucky, physician was charged by federal Information today with the fraudulent possession of a controlled substance, wire fraud and making false statements related to health care matters, announced United States Attorney John E. Kuhn, Jr.
According to the twelve-count federal Information, Sean P. McDonald, 46, devised a scheme to obtain prescription pain medication, while a treating physician at two Paducah, Kentucky, hospitals by falsely misrepresenting that he was removing medications for hospitalized patients, falsely possessing the controlled substances, and then falsely causing a request for payment to be sent from the two Paducah hospitals to the insurance carriers of the patients.
Specifically, it’s alleged that McDonald defrauded Lourdes Hospital and Western Baptist Hospital, by means of wire communication. From February 2009, through November 2010, McDonald caused a request for payment to be sent from Western Baptist Hospital and/or Lourdes Hospital, both located in Paducah, Kentucky, to patient’s insurance carriers.
During the same time period, McDonald made false and fraudulent statements to insurance carriers indicating that he had provided medication to patients when he had not.
Further, McDonald, as a prescribing physician with a DEA (Drug Enforcement Administration) registration number to issue prescriptions, wrote prescriptions for Dilauded, a Schedule II controlled substance, in violation of his DEA registration, to patients, when in fact he never provided the controlled substances to the patient.
If convicted at trial, McDonald would face a combined maximum term of imprisonment of 113 years, a combined maximum fine of $3,000,000 and a three year term of supervised release.
This case is being prosecuted by Assistant United States Attorneys Lettricea Jefferson-Webb and Seth Hancock and is being investigated by the United States Department of Health and Human Services Office of Inspector General, Kentucky Attorney General’s Office and Federal Bureau of Investigation.
The indictment of a person by a Federal Information is an accusation only and that person is presumed innocent until and unless proven guilty.
Marijuana Traffickers Plead Guilty to Federal ChargesRead the Press Release
AMARILLO, Texas — Two men from Moore County, Texas have pleaded guilty to federal offenses stemming from their respective roles in trafficking major quantities of marijuana, announced U.S. Attorney John Parker of the Northern District of Texas.
Late yesterday afternoon, Marco Saucedo, 44, of Cactus, Texas, pleaded guilty before U.S. District Judge Sidney A. Fitzwater to one count of unlawful use of a communications facility. Co-defendant Guadalupe Reyes, 49, of Etter, Texas, pleaded guilty last week before Judge Fitzwater to one count of conspiracy to distribute and possess with intent to distribute 1,000 kilograms or more of marijuana. Both defendants remain on bond.
Reyes faces a statutory penalty of not less than 10 years and up to life in federal prison and a $10 million fine. Saucedo faces a maximum statutory penalty of four years in federal prison and a $250,000 fine. Both defendants are scheduled to be sentenced by Judge Fitzwater on September 20, 2016.
According to documents filed in the case, in November 2014, officers with the Cactus Police Department responded to a weapon being discharged at a residence in Cactus that was owned by Guadalupe Reyes, and they determined that the individual who discharged the firearm was renting the property from Reyes. After obtaining consent to search, officers found more than $130,000 in cash inside the residence, which the resident advised was cash that he, at the direction of Reyes and Saucedo, brought back the previous week from Wichita and Topeka, Kansas.
The resident further disclosed he had been working for Reyes for several months, transporting large amounts of marijuana from Amarillo and Fritch, Texas, to other states, such as Kansas and Ohio. He would also transport large amounts of cash – proceeds from the sale of the marijuana – from those locations to the Cactus area, all at the direction of Reyes and Saucedo, who would pay him a set amount for each of the runs he made.
The resident indicated he had made approximately 10 trips to Wichita, Topeka, and Kansas City, Kansas, as well as to Toledo, Ohio, to deliver marijuana for Reyes, estimating that he had delivered approximately 8,000 pounds of marijuana while employed by Reyes. He further stated that on at least four occasions, he had returned with approximately $400,000 in cash for marijuana he had delivered. He further stated that Reyes instructed him to keep the money at the residence until it was retrieved by other, unnamed individuals. The individual also stated that both Reyes and Saucedo had directed him to only use pre-paid cell phones when communicating with them or the buyers.
In recorded conversations in November 2014, Reyes stated, among other things, that he was worried about law enforcement taking some of his properties. According to Reyes’ plea agreement, he agrees to not contest the forfeiture of several of his real estate holdings in Moore County, including two car lots and several residential properties.
The case is being investigated by the Federal Bureau of Investigation, the Texas Department of Public Safety, the Moore County Sheriff’s Office and the Cactus Police Department. Assistant U.S. Attorney Sean Long is in charge of the prosecution.
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Man Who Filed 26 False Tax Claims and Obstructed IRS Gets Significant SentenceRead the Press Release
HOUSTON – A federal judge has ordered Kenneth Robert Bruce to federal prison following his numerous convictions of willfully filing a false claim and impeding the IRS, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Rick Goss of IRS - Criminal Investigation (CI). A jury convicted Bruce on all counts as charged March 19, 2015, following a five-day trial and approximately 2.5 hours of deliberation.
Today, U.S. District Judge Nancy Atlas, who presided over the trial, handed Bruce a 15-year-sentence and further ordered he pay more than $3.3 million to the IRS. He must also serve three years of supervised release following completion of the prison term. In handing down the sentence, Judge Atlas noted Bruce’s sophisticated scheme and that his relevant conduct - his intended tax loss in the entire scheme - was between $65 million and $150 million.
During trial, the jury heard that Bruce prepared 26 false income tax returns or amended income tax returns claiming a total of more than $9 million in false income tax refunds. One return was for himself and 25 were for other taxpayers.
“Knowingly falsifying documents filed with the IRS is a serious crime,” said Goss. “This defendant not only created false income forms but used those forms to make fraudulent claims in excess of $9 million against the U.S. government. IRS-CI agents are committed to stopping this type of abuse of the tax system.”
Bruce attached false IRS forms 1099-OID (Original Issue Discount) to the tax returns, falsely reporting the taxpayers had received huge amounts of income from OID and had all or nearly all of the false amounts of income withheld for federal income taxes. The huge, false amounts of withholdings formed the bases for the claims for false claims for tax refunds.
The jury also convicted Bruce on one count of corruptly endeavoring to obstruct and impede the administration of the Internal Revenue Code.
Bruce was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The convictions were the result of an investigation by IRS - CI and the Treasury Inspector General for Tax Administration. Assistant U.S. Attorneys Charles J. Escher and Jim McAlister are prosecuting the case.
Lea County Woman Pleads Guilty to Federal Production of Child Pornography ChargeRead the Press Release
ALBUQUERQUE – Kyla Norby, 27, of Hobbs, N.M., pled guilty in federal court in Las Cruces, N.M., this afternoon to a production of child pornography charge. Under the terms of her plea agreement, Norby will be sentenced to 15 years in federal prison followed by 15 years of supervised release. Norby also will be required to register as a sex offender when she completes her prison sentence. The guilty plea was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, and Lea County Sheriff Steve Ackerman.
Norby was arrested on Jan. 8, 2016, on a criminal complaint alleging that Norby produced and distributed child pornography between May 1, 2015 and Dec. 30, 2015, in Lea County, N.M. According to the criminal complaint, the investigation into Norby was initiated after Homeland Security Investigations (HSI) agents from Laredo, Tex., arrested a man in Odessa, Tex., who revealed that Norby made a two-year old child sexually available to him. A search of the man’s smartphone revealed photos of Norby, including images consistent with child pornography, that Norby sent to the man from her smartphone.
During today’s proceedings, Norby pled guilty to a felony information charging her with production of child pornography. In her plea agreement, Norby admitted that on Oct. 25, 2015, she used a smartphone to take a sexually explicit photograph of a toddler with the intention of sharing the photograph with an individual in Texas.
This case was investigated by the Las Cruces office of HSI and the Lea Country Sheriff’s Office, both members of the New Mexico Internet Crimes Against Children (ICAC) Task Force, with assistance from HSI in Laredo, Texas. The case is being prosecuted by Assistant U.S. Attorney Marisa A. Lizarraga of the U.S. Attorney’s Las Cruces Branch Office.
This case is being prosecuted as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 82 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the Office of the New Mexico Attorney General. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Lawrence Tax Preparer and Former School Teacher Sentenced for Filing False Claims for RefundRead the Press Release
BOSTON – A Lawrence tax preparer and former teacher in the Lawrence and Boston school systems was sentenced today in U.S. District Court in Boston in connection with his role in defrauding the IRS of hundreds of thousands of dollars by filing false tax returns.
Leonidas Nunez, 61, was sentenced by U.S. District Court Judge William G. Young to 20 months in prison, two years of supervised release and ordered to pay restitution of $221,964 to the IRS. In March 2015, he pleaded guilty to one count of conspiring to defraud the IRS and six counts of submitting false claims for tax refunds.
From October 2010 through April 2011, Nunez conspired with others to defraud the IRS by presenting false income tax returns to the IRS. The returns falsely alleged income earned by more than 100 Puerto Rican residents who had not had federal income tax withheld and who were not required to file income tax returns in the United States. Nunez and his co-conspirators further directed the IRS to deposit the resulting fraudulent refunds into bank accounts controlled by Nunez and his co-conspirators. Together, they filed over 100 fraudulent returns with the IRS for tax year 2010, resulting in over $550,000 in fraudulent claims and over $220,000 in refunds.
United States Attorney Carmen M. Ortiz and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorney William F. Bloomer of Ortiz’s Public Corruption Unit.
Large-quantity drug bust results in meth dealer pleading guilty to Federal crimeRead the Press Release
CHARLESTON, W.Va. – A Montgomery man caught with substantial amounts of methamphetamine, heroin, and marijuana pleaded guilty today to a federal drug charge, announced Acting United States Attorney Carol Casto. Bryan Lee Palmer, 43, entered his guilty plea to possession with intent to distribute methamphetamine.
Palmer admitted that on February 26, 2016, he made arrangements for a drug deal to take place at a hotel in South Charleston. When Palmer arrived at the hotel, he was met by law enforcement. The officers obtained a search warrant for a duffel bag and backpack that was in Palmer’s possession. When officers searched the bags, they found over 1,500 grams of methamphetamine, approximately 700 grams of heroin, over a half a kilogram of marijuana, a loaded .45 caliber semi-automatic pistol, and over $30,000 in cash. Palmer further admitted that it was his intent to distribute the drugs in the Charleston area. Law enforcement estimated the street value of the seized drugs to be approximately $466,000.
Palmer faces up to 20 years in federal prison when he is sentenced on October 12, 2016.
The case against Palmer was investigated by the Kanawha County Sheriff’s Office and members of its Sheriff’s Tactical Operations Patrol (STOP) team. Assistant United States Attorney Timothy D. Boggess is in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs, including methamphetamine and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Kevin Michael Pippin Sentenced to 124 Months in Federal Prison for Child Pornography OffensesRead the Press Release
KNOXVILLE, Tenn.- On June 22, 2016, Kevin Michael Pippin, 41, of Knoxville, Tenn., was sentenced by the Honorable R. Leon Jordan, Senior U.S. District Judge, to serve 124 months in prison for distributing and possessing child pornography. Following his release from prison, he will be supervised by the U.S. Probation Office for 15 years and required to register with the sex offender registry in any state in which he resides, works, or attends school.
Pippin pleaded guilty in July 2015 to federal charges stemming from an undercover investigation into distribution of child pornography via peer-to-peer file sharing software on the Internet. After undercover investigators downloaded child pornography from Pippin’s computer, a federal search warrant was executed at his residence. A forensic examination of his computer equipment revealed that he had collected thousands of images and 82 videos of child pornography. A large assortment of the depictions of child abuse collected by Pippin was available for download by others from his computer through the use of the peer-to-peer software.
During the sentencing hearing, Judge Jordan remarked that the “staggering” number of images of child pornography the defendant had collected justified, in part, the length of the of the prison sentence.
This investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Matthew Morris represented the United States.
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 U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Kearney Man Sentenced for Possession of Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Sean Peterson, 32, of Kearney, Nebraska, was sentenced on June 17, in Lincoln, Nebraska, to four years, 96 months in prison by United States District Judge John M. Gerrard, for possession of child pornography. After his release from prison, Peterson will be required to serve a 15-year term of supervised release and be registered as a sex offender.
In September of 2014, Xoom.com, an online international money transfer service, notified Yahoo! that a number of Yahoo! accounts were engaged in the sale of child exploitation material. Investigation determined that several email accounts, operating overseas, were believed to be selling images, video and live-streamed sexual abuse. One of these individuals was communicating with Peterson about having sex with minors. Peterson also sent the person images of child pornography through web based messenger accounts.
On July 7, 2015, a search warrant was issued on Peterson’s residence and he admitted to accessing child pornography web sites using the Internet. The forensic investigation of the computer equipment found at Peterson’s residence revealed approximately 1,000 images of child pornography, including visual depictions of prepubescent minors engaged in sexually explicit conduct.
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 Federal Bureau of Investigation.
Justice Department Settles Immigration-Related Discrimination Claim Against Macy’sRead the Press Release
The Justice Department reached an agreement today with Macy’s over allegations that the large national retailer violated the Immigration and Nationality Act (INA) by discriminating against work-authorized non-U.S. citizens at its Glendale, California, location.
The department’s investigation was based on a charge filed by a lawful permanent resident whose hiring was delayed in October 2015. The charging party alleged, and the investigation found, that she was not able to begin working at Macy’s even though she showed sufficient proof of her work authorization because a Macy’s hiring official incorrectly believed that lawful permanent residents were required to produce unexpired permanent resident cards. The investigation also found that other human resource employees in Macy’s Glendale location were imposing the same unnecessary requirement on four other lawful permanent residents. In contrast, U.S. citizens were permitted to choose whichever valid documents they wanted to present to prove their work authorization. Under the INA, lawful permanent residents do not have to show their permanent resident cards when they start working. Instead, like all workers, they can choose whichever documentation the would like to present, such as a driver’s license and unrestricted social security card, from the lists of acceptable documents.
Under the settlement agreement, Macy’s will, among other things, provide additional training to its employees and assess its employees’ understanding of applicable rules. Macy’s will also pay an $8,700 civil penalty and periodically produce Form I-9 information to the department for review.
“Macy’s did the right thing by immediately resolving the charging party’s delayed hiring and by giving her full back pay,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department's Civil Rights Division. “All employers should take care not to impose unlawful burdens on employees because of their citizenship or immigration status and address issues promptly when they make mistakes.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. The law prohibits, among other things, citizenship, immigration status and national origin discrimination in hiring, firing, recruitment or referral for a fee; unfair documentary practices in employment eligibility verification; retaliation and intimidation.
To learn more about the protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected] or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they have been subjected to: different documentary requirements based on their citizenship, immigration status or national origin; or discrimination based on their citizenship, immigration status or national origin in hiring, firing or recruitment or referral, should contact OSC’s worker hotline for assistance.
Macy's Settlement Agreement
Jena man arrested for illegal possession of silencersRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Jena man pleaded guilty Monday to possessing unregistered silencers, which he also constructed and sold.
Robert E. Durham, 34, of Jena, La., pleaded guilty before U.S. Magistrate Judge Karen L. Hayes to one count of possession of an unregistered firearm. It will become final once accepted by U.S. District Judge Robert G. James. According to the guilty plea, the defendant was recorded setting up a sale of silencers with an undercover ATF agent. They met on May 10, 2016 in Winnfield, La., and the undercover agent purchased three silencers. Law enforcement agents then searched Durham’s home on May 19, 2016. They found and seized silencers, homemade firearm suppressors, ammunition, tools and a drill press to make silencers, silencer parts, and packaged “solvent trap kits,” which are also used to make silencers. The silencers and silencer parts and kits are defined as firearms according to federal law and are required to be registered in the National Firearms Registration and Transfer Record. The illegal silencers Durham possessed were not registered.
Durham faces up to 10 years in prison, three years of supervised release and a $10,000 fine. A sentencing date of October 5, 2016 was set.
The ATF and the Louisiana State Police conducted the investigation. Assistant U.S. Attorney James G. Cowles Jr. is prosecuting the case.
Iowa Businessman Pleads Guilty to Failing to Pay Employment TaxesRead the Press Release
A Forest City, Iowa, businessman pleaded guilty today in federal court to failing to pay employment taxes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kevin W. Techau of the Northern District of Iowa.
Darrell Smith, 60, was charged in an indictment in January 2016 with multiple counts of willfully failing to collect, truthfully account for and pay federal employment taxes that were withheld from the wages of employees of Permeate Refining Inc., an ethanol-production business in Hopkinton, Iowa.
“Today’s plea reaffirms our commitment to prosecuting employers who willfully fail to comply with their employment tax obligations,” said Acting Assistant Attorney General Ciraolo. “Working with our law enforcement partners in the Internal Revenue Service (IRS), the Department of Justice will continue to vigorously investigate and prosecute those who seek to cheat the U.S. Treasury and gain an unfair advantage over their competitors.”
“Mr. Smith’s attempt to dodge his legal obligation to account for and pay employment taxes did not go unchecked, and he will now be held accountable for his criminal conduct,” said U.S. Attorney Techau.
At his guilty plea hearing, Smith admitted that he collected and willfully failed to account for and pay over to the IRS $85,267 for the second quarter of 2012. A sentencing date has not yet been set. Smith faces a statutory maximum sentence of five years in prison as well as a term of supervised release and monetary penalties. Smith’s co-defendant Randy Less pleaded guilty on June 14 to failing to pay employment taxes and violating the Clean Water Act.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Techau thanked special agents of IRS-Criminal Investigation, the FBI, the U.S. Postal Inspection Service and the U.S. Environmental Protection Agency, who investigated the case and Assistant U.S. Attorney Tim Vavricek of the Northern District of Iowa and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s Employment Tax Enforcement efforts may be found here.
Iowa Businessman Pleads Guilty to Failing to Pay Employment TaxesRead the Press Release
CEDAR RAPIDS, IA—A Forest City, Iowa, businessman pleaded guilty today in federal court to failing to pay employment taxes, announced U.S. Attorney Kevin W. Techau of the Northern District of Iowa and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Darrell Smith, 60, was charged in an indictment in January 2016 with multiple counts of willfully failing to collect, truthfully account for and pay federal employment taxes that were withheld from the wages of employees of Permeate Refining Inc., an ethanol-production business in Hopkinton, Iowa.
“Mr. Smith’s attempt to dodge his legal obligation to account for and pay employment taxes did not go unchecked, and he will now be held accountable for his criminal conduct,” said U.S. Attorney Techau.
“Today’s plea reaffirms commitment to prosecuting employers who willfully fail to comply with their employment tax obligations,” said Acting Assistant Attorney General Ciraolo. “Working with our law enforcement partners in the Internal Revenue Service (IRS), the Department of Justice will continue to vigorously investigate and prosecute those who seek to cheat the U.S. Treasury and gain an unfair advantage over their competitors.”
At his guilty plea hearing, Smith admitted that he collected and willfully failed to account for and pay over to the IRS $85,267 for the second quarter of 2012. A sentencing date has not yet been set. Smith faces a statutory maximum sentence of five years in prison as well as a term of supervised release and monetary penalties. Smith’s co-defendant Randy Less pleaded guilty on June 14 to failing to pay employment taxes and violating the Clean Water Act.
A sentencing date has not yet been set. Smith faces a statutory maximum sentence of five years in prison as well as a term of supervised release and monetary penalties.
U.S. Attorney Techau and Acting Assistant Attorney General Ciraolo thanked special agents of IRS Criminal Investigation, the FBI, the U.S. Postal Inspection Service and the U.S. Environmental Protection Agency, who investigated the case and Assistant U.S. Attorney Tim Vavricek of the Northern District of Iowa and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s Employment Tax Enforcement efforts may be found here.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-2002-LTS.
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Husband and Wife Owners of First Mutual Bancorp of Illinois Indicted in Scheme to Hide Millions of Dollars in Cash and Assets from CreditorsRead the Press Release
CHICAGO — An Oak Brook couple who owned First Mutual Bancorp of Illinois and other financial entities intentionally hid cash and assets from creditors after defaulting on $40 million in personal and corporate loans, according to an indictment returned in federal court in Chicago.
PETHINAIDU VELUCHAMY and his wife, PARAMESWARI VELUCHAMY, were the principal shareholders of First Mutual Bancorp of Illinois Inc., a holding company for Mutual Bank. In June 2009, according to the indictment, the couple defaulted on personal and corporate loans totaling $40 million. The following month, Mutual Bank was shut down by federal regulators. Prior to the shutdown and continuing until at least November 2015, the couple hid millions of dollars in assets by falsifying documents, moving money into domestic and foreign bank accounts, and directing employees to destroy financial records, the indictment states. The couple also transferred cash to their two adult children, with nearly $8.5 million going to one and more than $10.1 million to the other, according to the indictment.
The 12-count indictment was returned yesterday in U.S. District Court in Chicago. It charges Pethinaidu Veluchamy, 70, with four counts of bank fraud, two counts of destroying records to obstruct a bankruptcy proceeding, two counts of making a false statement under oath in a bankruptcy proceeding, and one count of making a false statement in an application for a U.S. passport. Parameswari Veluchamy, 65, is charged with four counts of bank fraud, two counts of destroying records to obstruct a bankruptcy proceeding, one count of making a false statement under oath in a bankruptcy proceeding, and one count of making a false statement in an application for a U.S. passport.
Arraignments in federal court in Chicago have not yet been scheduled.
According to the charges, Pethinaidu Veluchamy caused his relatives to obtain legal judgments against him for loans for which he knew he was not personally liable, so that he could later assert those liens as superior to a bank creditor’s anticipated judgments. In a 2011 deposition in a separate court case, Pethinaidu Veluchamy fraudulently claimed that certain funds transferred to his adult children represented indemnity obligations for their investments in First Mutual Bancorp, according to the indictment. He produced a document to support this claim, but when questioned about the timing of the creation of the document, Pethinaidu Veluchamy claimed the computer he had used to create it crashed in a snowstorm, according to the indictment.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Each count of bank fraud is punishable by up to 30 years in prison and a $1 million fine. Destroying records to obstruct a bankruptcy proceeding carries a maximum sentence of 20 years. The maximum sentence for making a false statement under oath in a bankruptcy proceeding is five years, while making a false statement in an application for a U.S. passport is punishable by up to ten years.
The public is reminded that an indictment is 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. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Bethany Biesenthal and Special Assistant U.S. Attorney Jeffrey Snell.
Indictment
Hartford Man Sentenced to 70 Months in Federal Prison for Selling Crack and HeroinRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that EDGARDO TORRES, also known as “Eggy,” 37, of Hartford, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 70 months of imprisonment, followed by four years of supervised release, for distributing crack cocaine and heroin.
This matter stems from Project Longevity, a comprehensive initiative to reduce gun violence in Connecticut’s major cities. Through Project Longevity, community members and law enforcement directly engage with members of groups that are prone to commit violence. A critical component of the Project Longevity strategy is the “call-in,” a face-to-face meeting where Project Longevity partners engage group members and deliver a community message against violence, a law enforcement message about the consequences of further violence and an offer of help for those who want it. Members of Los Solidos attended call-ins that were held in April 2014 and August 2014, but after a spate of shootings involving Los Solidos members and associates, law enforcement directed its coordinated attention to the group.
According to court documents and statements made in court, in September 2014, the FBI’s Northern Connecticut Violent Crimes Task Force and Hartford Police Department initiated an investigation into narcotics distribution, firearms trafficking and acts of violence carried out by members and associates Los Solidos in Hartford’s South End. The investigation, which culminated in June 2015 with the indictment of more than 30 defendants, included the use of court-authorized wiretaps, controlled purchases of heroin, crack cocaine and firearms, and the execution of more than 15 searches. These law enforcement efforts resulted in the seizure of 24 firearms, approximately $74,000, two kilograms of crack cocaine, two kilograms of powder cocaine, one kilogram of heroin, 7,000 bags of packaged heroin, and four vehicles.
Between September 2014 and February 2015, the FBI’s Task Force and Hartford Police Department conducted 14 controlled purchases of heroin and/or crack cocaine from TORRES.
TORRES has been detained since his arrest on June 15, 2015. On March 17, 2016, he pleaded guilty to one count of possession with intent to distribute and distribution of cocaine base (“crack”) and heroin.
This case is being prosecuted by Assistant U.S. Attorneys Michael J. Gustafson and Gabriel J. Vidoni.
Harrisburg Man Indicted for Possession of Crack and Possession of A Firearm in Furtherance of Drug TraffickingRead 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 indicted Jwane Johnson for possession with intent to distribute crack, possession of a handgun by a convicted felon, and possession of a firearm in furtherance of drug trafficking.
According to U.S. Attorney Peter Smith, Johnson, a 28 year old resident of Harrisburg, allegedly attempted to distribute crack near the Allison Hill section of Harrisburg on December 8, 2015. When the sale was interrupted by Harrisburg Police, he allegedly fled leaving behind a handgun. Johnson was arrested on January 2, 2016 by Harrisburg Police.
The matter was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives with the Harrisburg Police Department. The case is being prosecuted by Assistant U.S. Attorney Scott R. Ford.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes.
Indictments 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 this offense is up to life in prison, 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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Harrisburg Man Indicted Federally for Unlawful Firearm Possession ChargeRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Harrisburg man was indicted by a federal grand jury in Harrisburg for being a convicted felon in possession of a firearm.
According to United States Attorney Peter Smith, Hassan Ward, age 32, allegedly possessed a loaded 9 mm handgun after having been convicted of at least three previous violent felonies or serious drug offenses. Ward was initially arrested by Harrisburg Police on April 1, 2016.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Harrisburg Bureau of Police and is being prosecuted by Assistant United States Attorney Daryl F. Bloom.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a districtwide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes.
Indictments 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 life imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. This offense carries a mandatory term of imprisonment of 15 years. 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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Harrisburg Man Charged with Unlawful Possession of A FirearmRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Brian Acosta, age 21, a resident of Harrisburg, was indicted by a grand jury in Harrisburg and charged with possession of a firearm by a convicted felon.
According to U.S. Attorney Peter Smith, on December 27, 2015, Harrisburg police officers allegedly observed Acosta walking in the 1500 block of Vernon Street at approximately 8:30 p.m., brandishing a firearm. Acosta threw the gun away and fled. He was apprehended and the firearm was recovered.
This investigation is being conducted by the Federal Bureau of Investigation and the Harrisburg Bureau of Police and is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
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 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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Guyana citizen charged with falsifying an application for a U.S. passportRead the Press Release
ELKINS, WEST VIRGINIA – A federal grand jury returned an indictment charging Joseph Fedrick, 42, of Guyana, with falsifying an application for a United States passport, U.S. Attorney William J. Ihlenfeld, II, announced.
Fedrick executed an application for a United States passport in Berkeley County, West Virginia. Within the application, Fedrick attempted to use a false social security number with the intent to secure the passport fraudulently.
Fedrick is charged with one count of “False Statement in Application for Passport.” He faces up to ten years in prison and up to $250,000 in fines. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn M. Adkins is prosecuting the case on behalf of the government. The Department of the State Diplomatic Security Service and the United States Department of Homeland Security are investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Georgia Resident Sentenced for Laundering Proceeds from a Stolen Identity Refund Fraud SchemeRead the Press Release
Defendant Used Stolen Identification Information to Access “Get Transcript” Database and File False Returns
An Austell, Georgia, resident was sentenced today to 15 months in prison for his role in laundering proceeds from a stolen identity refund fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney John A. Horn of the Northern District of Georgia.
Rapheal Atebefia pleaded guilty to one count of money laundering on March 25. According to court documents, Atebefia and his co-conspirators obtained the means of identification of actual individuals, including their names and social security numbers, and used this information to access the Internal Revenue Service’s (IRS) “Get Transcript” database. The stolen names and the information obtained from Get Transcript were used to file false income tax returns. Atebefia’s co-conspirators obtained prepaid debit cards from stores located in multiple states and registered the cards in the names of the stolen identities. These debit cards were used to receive the income tax refunds requested on the false tax returns. To conceal this fraudulent scheme, the prepaid debit cards were then used to purchase money orders. Atebefia deposited the money orders into his bank accounts and then structured cash withdrawals of the proceeds in order to prevent the bank from filing Currency Transaction Reports.
In addition to the prison term, Atebefia was ordered to serve three years of supervised release and to pay restitution in the amount of $52,621 to the IRS. Atebefia’s co-defendants, Anthony and Sonia Alika, are scheduled to be sentenced on July 27.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Horn commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case and Trial Attorneys Michael C. Boteler and Charles M. Edgar Jr. of the Tax Division and Assistant U.S. Attorney Brian Pearce, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Georgia Dentist Indicted for Medicaid Fraud and Money LaunderingRead the Press Release
ATLANTA – A federal grand jury has indicted Oluwatoyin Solarin for filing false Medicaid claims, money laundering, and seeking to evade banking reporting requirements.
“Medicaid funds should benefit truly deserving members of society,” said U. S. Attorney John Horn. “When medical practitioners allegedly steal Medicaid funds for their own selfish benefit, this diverts scarce resources away from those who need them most.”
“Fighting Medicaid fraud is a top priority for my office,” said Georgia Attorney General Sam Olens. “Those that steal these funds will be prosecuted.”
“The OIG is committed to investigating all allegations of individuals who target the vulnerable and unsuspecting refugee community,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.
“The integrity of the medical profession must be protected from people like Dr. Solarin, who allegedly seek to illegally profit by pretending to provide legitimate medical services,” stated Veronica Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “Health care fraud diverts funds from individuals who legitimately need care. Through joint investigations such as this, we intend to continue to aggressively pursue those who steal from taxpayers and receive money that they are not entitled to.”
According to U.S. Attorney Horn, the indictment, a civil forfeiture complaint, and other information presented in court: Solarin was a dentist who ran “Care Dental,” a small dental franchise with offices in Doraville and Duluth, Georgia. Over a period of at least four years, Solarin allegedly submitted numerous false bills to the Georgia Medicaid Program that falsely claimed Solarin had performed dental procedures on Medicaid recipients.
The indictment alleges that on various dates that Solarin claimed she was treating Medicaid recipients, she was not even in the state of Georgia, and was sometimes overseas. Patients were seen at times by another dentist at Care Dental who Solarin knew was not permitted to file Medicaid claims. At other points, Solarin allegedly directed at least one employee to falsify service dates on Medicaid claims so that it would appear dental work was being done on dates that the patient was eligible for Medicaid.
Solarin also allegedly paid individuals to recruit Nepalese refugee children to come to Care Dental for dental services. Parents were not always consulted when these children were seen at Care Dental.
The indictment further alleges that Oluwatoyin Solarin, 45, Atlanta, Georgia, tried to mask financial transactions and also used the fraudulent proceeds for her own benefit. On various occasions during the course of this fraud scheme, Solarin made cash deposits into a bank account directly under $10,000, with the purpose of evading banking reporting requirements. Solarin used the proceeds of this scheme to purchase rental properties throughout the Atlanta area. In a separate civil forfeiture action, the government is seeking to forfeit Solarin’s interest in over a dozen real properties located throughout the state of Georgia.
Members of the public are reminded that the indictment contains only allegations. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the U.S. Department of Health and Human Services, Office of the Inspector General, investigators from the Georgia Medicaid Fraud Control Unit, and Internal Revenue Service Criminal Investigation.
Assistant United States Attorney Thomas J. Krepp and Georgia Assistant Attorney General Lyndie M. Freeman are prosecuting the case.
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.
Fresh Start Reentry Program Invites Former Offenders to Attend Information and Resource SeminarRead the Press Release
TULSA, Okla.—The Fresh Start Reentry Program will host an information and resource seminar for individuals with prior felony convictions on Thursday, June 23, announced United States Attorney Danny C. Williams Sr. of the Northern District of Oklahoma. The seminar will be held from 6:00 to 7:00 p.m., in the Auditorium of the Robert S. Kerr Building, 440 S. Houston Ave. in Tulsa.
United States Attorney Williams said, “The Fresh Start Reentry Program is committed to preparing those who have paid their debt to society for opportunities after incarceration. Removing reentry barriers helps individuals successfully reenter society and become contributing members to their communities. I encourage individuals to attend and to take advantage of this opportunity.”
At the seminar, DePorres Hopkins, of Oklahoma City, will be the Success Speaker, a person who was formerly incarcerated and is now a contributing member of society. Mr. Hopkins served his prison sentence in El Reno Federal Correction Institution and Jess Dunn Correctional Center in Taft, Okla. for drug trafficking. While incarcerated he earned college credit hours, learned three trades and became the Resident Barber. He currently owns Hopkins Haircare & Enterprises and UpScale Real Estate Development & Construction. Additionally, he is on the advisory board for Mid Del Vo-Tech and Metro Tech Vo-Tech, and serves on the NE Renaissance Steering Committee that is revitalizing North East Oklahoma City.
To register for this event, contact Reentry Coordinator Loretta Radford at (918) 382-2700.
The Fresh Start Reentry Program is dedicated to reducing criminal recidivism in the Northern District by helping individuals with felony convictions gain access to resources and to provide the necessary motivation for success when reintegrating into the community. The Fresh Start Reentry Program is in coordination with the United States Probation Office, the Tulsa County District Attorney’s Office, the Oklahoma Department of Corrections, and the Oklahoma Department of CareerTech Education. For more information about the Fresh Start Reentry Program, please visit www.justice.gov/usao-ndok.
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Fort Hall Man Sentenced to 33 months for Assault on an OfficerRead the Press Release
POCATELLO – Lyle Plentywounds, Sr., 60, of Fort Hall, Idaho, was sentenced today to a total of 33 months in prison for assault on an officer and for a violation of his supervised release on a previous case, which also involved an assault on an officer, U.S. Attorney Wendy J. Olson announced. Plentywounds received a 21 month sentence for the new assault on officer case and an additional 12 month consecutive sentence for the supervised release violation on the previous case. Chief U.S. District Judge B. Lynn Winmill also ordered Plentywounds to serve three years of supervised release. Plentywounds pleaded guilty to the new charge of assault on an officer on April 11, 2016.
On June 23, 2015, officers from the Fort Hall Police Department responded to a residence on the Fort Hall Indian Reservation on a report that the Plentywounds was causing a disturbance at that location. Officers arrived at the location and found Plentywounds to be intoxicated, which is a violation of Tribal law. Officers took Plentywounds into custody. While officers were taking him to the patrol car, Plentywounds struggled with the officers and kicked an officer in the leg. Under the specific federal law that Plentywounds pled guilty to violating, Fort Hall police officers are considered “federal officers.”
The case was investigated by the Fort Hall Police Department and the Federal Bureau of Investigation.
Former Swiss Banker Pleads Guilty to Conspiring with U.S. Taxpayers and Other Swiss Bankers to Defraud the United StatesRead the Press Release
A former Credit Suisse AG banker, who has been a fugitive since 2011, pleaded guilty today in U.S. District Court in the Eastern District of Virginia to charges related to aiding and assisting U.S. taxpayers in evading their income taxes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
Michele Bergantino, 48, a citizen of Italy and a resident of Switzerland, pleaded guilty before U.S. District Judge Gerald Bruce Lee to conspiring to defraud the United States by assisting U.S. taxpayers to conceal foreign accounts and evade U.S. tax during his employment as a banker working for Credit Suisse AG on its North American desk.
“Mr. Bergantino is now the third fugitive to come to the United States and plead guilty to charges in this case,” said Acting Assistant Attorney General Ciraolo. “To those who have actively assisted U.S. taxpayers in using offshore accounts to evade taxes, the message is clear: staying outside the United States will provide little comfort. We will investigate and charge you, and will work relentlessly to hold you to account for your actions.”
“Hiding assets and creating secret accounts in an attempt to evade income taxes is a losing game,” said U.S. Attorney Boente. “Today’s plea shows that we will continue to prosecute bankers and U.S. citizens who engage in this criminal activity. I want to thank our law enforcement partners and prosecutors for their work on this important case.”
Bergantino admitted that from 2002 to 2009, while working as a relationship manager for Credit Suisse in Switzerland, he participated in a wide-ranging conspiracy to aid and assist U.S. taxpayers in evading their income taxes by concealing assets and income in secret Swiss bank accounts. Bergantino oversaw a portfolio of accounts, largely owned by U.S. taxpayers residing on the West Coast, which grew to approximately $700 million of assets under management. Bergantino admitted that the tax loss associated with his criminal conduct was more than $1.5 million but less than or equal to $3.5 million.
During his time as a relationship manager, Bergantino assisted many U.S. clients in utilizing their Credit Suisse accounts to evade their U.S. income taxes and to facilitate concealment of the U.S clients’ undeclared financial accounts from the U.S. Treasury Department and the Internal Revenue Service (IRS). Among the steps taken by Bergantino to assist clients in hiding their Swiss accounts were the following: assuring them that Swiss bank secrecy laws would prevent Credit Suisse from disclosing their undeclared accounts to U.S. law enforcement; discussing business with clients only when they traveled to Zurich to meet him; structuring withdrawals from their undeclared accounts by sending multiple checks, each in amounts below $10,000, to clients in the United States; facilitating the withdrawal of large sums of cash by U.S. customers from their Credit Suisse accounts at Credit Suisse offices in the Bahamas, in Switzerland, particularly the Credit Suisse branch at the Zurich airport and at a financial institution in the United Kingdom; holding clients’ mail from delivery to the United States; issuing withdrawal checks from Credit Suisse’s correspondent bank in the United States; and taking actions to remove evidence of a U.S. client’s control over an account because the U.S. client intended to file a false and fraudulent income tax return. Moreover, Bergantino understood that a number of his U.S. clients concealed their ownership and control of foreign financial accounts by holding those accounts in the names of nominee tax haven entities, or structures, which were frequently created in the form of foreign partnerships, trusts, corporations or foundations.
“Today’s plea of Michele Bergantino is another example of IRS-Criminal Investigation’s (CI) dedication to bringing individuals to justice who engage in helping U.S. taxpayers evade their tax obligations,” said IRS-CI Chief Richard Weber. “We will continue our global efforts to vigorously pursue both U.S. taxpayers who avoid paying their fair share and the unscrupulous professionals who facilitate their actions. For those hiding cash or assets offshore, the time to come clean is now.”
Bergantino also admitted traveling to the United States approximately one to two times a year to meet with clients, taking careful steps to conceal the purpose of his visits from U.S. law enforcement. He used private couriers to send clients’ account statements to the U.S. hotels where he stayed, so that he would not be caught traveling with clients’ statements in his possession. In addition, Bergantino obtained “travel” account statements for each client he intended to visit which were devoid of Credit Suisse’s logo and account or customer identification information and used business cards that Credit Suisse provided that contained only his name and office number and did not carry the Credit Suisse name or logo. On entering the United States, Bergantino provided misleading information regarding the nature and purpose of his visit to U.S. Customs and Border Protection authorities.
In addition to assisting customers in evading their U.S. taxes, Bergantino also provided illegal advice to U.S. customers regarding investments in U.S. securities. Neither Bergantino nor Credit Suisse were registered with the U.S. Securities and Exchange Commission and both U.S. law and Credit Suisse policy prohibited Bergantino and other Credit Suisse employees from providing investment advice in the United States. Nevertheless, Credit Suisse management pressured its employees, including Bergantino, to make sales in the United States.
Two of Bergantino’s co-defendants, Andreas Bachmann and Josef Dörig, pleaded guilty to the superseding indictment in 2014 and were sentenced on March 27, 2015. Credit Suisse pleaded guilty in May 2014 for conspiring to aid and assist taxpayers in filing false returns and was sentenced in November 2014 to pay $2.6 billion in fines and restitution.
Bergantino faces a statutory maximum sentence of five years in prison. He also faces monetary penalties and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Boente commended special agents of IRS-Criminal Investigation, who investigated the case and Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Mark Lytle of the Eastern District of Virginia, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former Swiss Banker Pleads Guilty to Tax FraudRead the Press Release
ALEXANDRIA, Va. – Michele Bergantino, 48, a citizen of Italy and a resident of Switzerland, pleaded guilty today to charges related to the aiding and assisting U.S. taxpayers in evading their income taxes during his employment as a banker working for Credit Suisse AG on its North American desk.
“Hiding assets and creating secret accounts in an attempt to evade income taxes is a losing game,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Today’s plea shows that we will continue to prosecute bankers and U.S. citizens who engage in this criminal activity. I want to thank our law enforcement partners and prosecutors for their work on this important case.”
According to the statement of facts filed with the plea agreement, Bergantino admitted that from 2002 to 2009, while working as a relationship manager for Credit Suisse in Switzerland, he participated in a wide-ranging conspiracy to aid and assist U.S. taxpayers in evading their income taxes by concealing assets and income in secret Swiss bank accounts. Bergantino oversaw a portfolio of accounts, largely owned by U.S. taxpayers residing on the West Coast, which grew to approximately $700 million of assets under management. Bergantino admitted that the tax loss associated with his criminal conduct was more than $1.5 million but less than or equal to $3.5 million.
“Mr. Bergantino is now the third fugitive to come to the United States and plead guilty to charges in this case,” said Caroline D. Ciraolo, Acting Assistant Attorney General of the Justice Department’s Tax Division. “To those who have actively assisted U.S. taxpayers in using offshore accounts to evade taxes, the message is clear: staying outside the United States will provide little comfort. We will investigate and charge you, and will work relentlessly to hold you to account for your actions.”
During his time as a relationship manager, Bergantino assisted many U.S. clients in utilizing their Credit Suisse accounts to evade their U.S. income taxes and to facilitate concealment of the U.S clients’ undeclared financial accounts from the U.S. Treasury Department and the Internal Revenue Service (IRS). Among the steps taken by Bergantino to assist clients in hiding their Swiss accounts were the following: assuring them that Swiss bank secrecy laws would prevent Credit Suisse from disclosing their undeclared accounts to U.S. law enforcement; by discussing business with clients only when they traveled to Zurich to meet him; structuring withdrawals from their undeclared accounts by sending multiple checks, each in amounts below $10,000, to clients in the United States; facilitating the withdrawal of large sums of cash by U.S. customers from their Credit Suisse accounts at Credit Suisse offices in the Bahamas, in Switzerland, particularly the Credit Suisse branch at the Zurich airport and at a financial institution in the United Kingdom; holding clients’ mail from delivery to the United States; issuing withdrawal checks from Credit Suisse’s correspondent bank in the United States; and taking actions to remove evidence of a U.S. client’s control over an account because the U.S. client intended to file a false and fraudulent income tax return. Moreover, Bergantino understood that a number of his U.S. clients concealed their ownership and control of foreign financial accounts by holding those accounts in the names of nominee tax haven entities, or structures, which were frequently created in the form of foreign partnerships, trusts, corporations or foundations.
“Today’s plea of Michele Bergantino is another example of IRS-Criminal Investigation’s (CI) dedication to bringing individuals to justice who engage in helping U.S. taxpayers evade their tax obligations,” said Richard Weber, Chief of IRS-Criminal Investigation. “We will continue our global efforts to vigorously pursue both U.S. taxpayers who avoid paying their fair share and the unscrupulous professionals who facilitate their actions. For those hiding cash or assets offshore, the time to come clean is now.”
Bergantino also admitted to traveling to the United States approximately one to two times per year to meet with clients, taking careful steps to conceal the purpose of his visits from U.S. law enforcement. He used private couriers to send clients’ account statements to the U.S. hotels where he stayed, so that he would not be caught traveling with clients’ statements in his possession. In addition, Bergantino obtained “travel” account statements for each client he intended to visit which were devoid of Credit Suisse’s logo and account or customer identification information and used business cards that Credit Suisse provided that contained only his name and office number and did not carry the Credit Suisse name or logo. On entering the United States, Bergantino provided misleading information regarding the nature and purpose of his visit to U.S. Customs and Border Protection authorities.
In addition to assisting customers in evading their U.S. taxes, Bergantino also provided illegal advice to U.S. customers regarding investments in U.S. securities. Neither Bergantino nor Credit Suisse were registered with the U.S. Securities and Exchange Commission and both U.S. law and Credit Suisse policy prohibited Bergantino and other Credit Suisse employees from providing investment advice in the United States. Nevertheless, Credit Suisse management pressured its employees, including Bergantino, to make sales in the United States.
Two of Bergantino’s co-defendants, Andreas Bachmann and Josef Dörig, pleaded guilty to the superseding indictment in 2014 and were sentenced on March 27, 2015. Credit Suisse pleaded guilty in May 2014 for conspiring to aid and assist taxpayers in filing false returns and was sentenced in November 2014 to pay $2.6 billion in fines and restitution.
Bergantino faces a maximum penalty of five years in prison when sentenced on September 23. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Caroline D. Ciraolo, Acting Assistant Attorney General of the Justice Department’s Tax Division, and Richard Weber, Chief of IRS-Criminal Investigation, made the announcement after the plea was accepted by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorney Mark Lytle and Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:11-cr-95.
Former Nurse Sentenced to 82 Months for Stealing and Tampering with Patient MedicationsRead the Press Release
ALBANY, NEW YORK – Nathan Baum, age 31, of East Greenbush, New York, was sentenced today to serve 82 months in prison after admitting to stealing pain medication intended for hospice patients.
The announcement was made by United States Attorney Richard S. Hartunian; Special Agent in Charge Jeffrey G. Hughes of the U.S. Department of Veterans Affairs Office of Inspector General, Northeast Field Office; and Acting Special Agent in Charge Russell J. Hermann of the U.S. Food and Drug Administration Office of Criminal Investigations, New York Field Office.
Senior United States District Judge Lawrence E. Kahn also imposed a three-year term of supervised release, to begin after Baum’s release from prison, and a $2,000 fine.
Baum pled guilty in February to tampering with a consumer product and obtaining controlled substances by deception and subterfuge. Baum, a licensed practical nurse who worked at the hospice ward of the Veterans Affairs Medical Center, in Albany, improperly accessed syringes that contained oxycodone hydrochloride. These syringes were stored in locked containers that Baum was able to access using his individually assigned password. Between April 8, 2014 and May 16, 2014, Baum removed the oxycodone hydrochloride from at least 25 syringes and replaced it with haloperidol.
Oxycodone hydrochloride, a Schedule II controlled substance, is a highly addictive narcotic analgesic used to treat moderate to severe pain. Haloperidol, often marketed as Haldol, is an anti-psychotic medication used to treat certain mental/mood disorders and to treat uncontrolled movements or agitation.
Family members of some of the hospice patients attended today’s sentencing, and several gave statements detailing the pain and suffering that Baum inflicted on dying hospice patients and their families.
U.S. Attorney Richard S. Hartunian stated: “The victims in this case were military veterans, including veterans of World War II and the Korean War. They fought for and served our country, and eventually became hospice patients who trusted Nathan Baum to give them the medication they needed in the final moments of their lives. Baum violated that trust by stealing their medication and replacing it with anti-psychotic medicine that would not have eased his patients’ pain. This was a terrible crime, and Baum has received a sentence reflecting his betrayal of the nursing profession and the Department of Veterans Affairs.”
Jeffrey G. Hughes, Special Agent in Charge of the VA Office of Inspector General’s Northeast Field Office, said: “The VA OIG is committed to pursuing those who would do harm to our deserving veterans and bringing those individuals to justice. We will continue to diligently pursue fraud, waste and abuse in every form as it so negatively affects our nation’s heroes. We would also like to commend the Stratton VA Medical Center for its prompt actions and notification to our office.”
Russell J. Hermann, Acting Special Agent in Charge of the FDA Office of Criminal Investigations’ New York Field Office, said: “Our office will continue to pursue those who prey on our most vulnerable patients, those in hospice, by removing their needed medications. We will continue our efforts to protect the public health and bring to justice those would compromise patients’ health and comfort in this manner.”
Baum’s tampering was discovered in late May 2014, when his supervisor noticed that he was slurring his speech and his pupils were pinpoint – signs of controlled substance abuse. When federal agents inspected the locked container Baum was allowed to access, they found that three sets of oxycodone hydrochloride syringes had been tampered with. Baum admitted to agents that he was addicted to painkillers; that he used oxycodone hydrochloride that was intended for veterans; and that he replaced the oxycodone hydrochloride in some syringes with Haldol.
This case was investigated by the U.S. Department of Veterans Affairs Office of Inspector General and the Food and Drug Administration Office of Criminal Investigations, and was prosecuted by Assistant U.S. Attorney Elizabeth R. Rabe.
Former Manchester Tax Preparer Sentenced for Filing False Tax ReturnsRead the Press Release
CONCORD, N.H. – Okello Odongo, 36, of Snellville, Georgia, was sentenced to 18 months in prison and ordered to pay $34,822 in restitution to the IRS for filing 19 false tax returns and fraudulently obtaining tax refunds reports United States Attorney Emily Gray Rice.
Odongo is a former resident of Manchester, New Hampshire, where he operated a tax return preparation business called Tax Smart Solutions Co. As a tax preparer, Odongo was authorized by the IRS to file tax returns electronically for his customers. One of the forms he filed electronically was an Allocation of Refund Form that instructed the IRS to directly deposit refunds into specified bank accounts. The form allowed a refund to be allocated to two or more bank accounts.
In 2011 and 2012 Odongo filed false tax returns on behalf of some of his customers that fraudulently overstated the amounts of the tax refunds they were entitled to claim. Odongo also filed Allocation of Refund Forms that directed the IRS to electronically deposit the fraudulent portions of the refunds to bank accounts Odongo held or had access to. None of Odongo’s customers knew that he used their doctored tax returns as a vehicle to defraud the IRS.
This case was investigated by the Internal Revenue Service, Criminal Investigations. It was prosecuted by Assistant United States Attorney Mark S. Zuckerman.
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Former MCC Construction Company Officer and Owner Pleads Guilty to Conspiring to Obstruct Government ProceedingRead the Press Release
Thomas Harper, a former officer and owner of MCC Construction Company (MCC), pleaded guilty today to conspiring to obstruct justice before the Small Business Administration (SBA). Harper also agreed to pay restitution in the amount of $165,711, the Department of Justice announced today.
The plea was announced by Principal Deputy Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division; U.S. Attorney Channing D. Phillips of the U.S. Attorney’s Office for the District of Columbia; Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office; Inspector General Peggy E. Gustafson of the Small Business Administration (SBA); Inspector General Carol Fortine Ochoa of the U.S. General Services Administration (GSA); Special Agent in Charge Brian J. Reihms of the Central Field Office of the Defense Criminal Investigative Service (DCIS), and Director Frank Robey of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
“Today's guilty plea ensures that the defendant does not profit from his crimes,” said Principal Deputy Assistant Attorney General Hesse. “The Antitrust Division will continue to work with our colleagues at the US Attorney's Office and in law enforcement to expose and punish schemes like this that defraud taxpayers and legitimate small business owners.”
“This prosecution and the broader investigation that led to these charges demonstrate the resolve of law enforcement to protect the integrity of federal contracting rules meant to assist small, disadvantaged businesses,” said U.S. Attorney Phillips. “We are committed to ensuring that the benefits of this important government program go only to those companies that truly are socially and economically disadvantaged and deserving of the work.”
“The FBI will aggressively investigate those who seek to profit by fraudulently competing for government contracts intended for small businesses,” said Assistant Director in Charge Abbate. “I want to thank the dedicated FBI special agents and analysts, as well as our partner agencies, for their hard work in protecting fair federal contracting opportunities for socially and economically disadvantaged businesses in our community.”
“Fraudulently passing work through eligible small businesses to a large business does not provide taxpayers the best value and certainly does not support the role of small businesses as engines of economic development and job creation,” said SBA Inspector General Gustafson. “In fact, it subverts the purpose of SBA’s preferential contracting programs and harms the small businesses the programs are designed to assist. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their leadership and dedication to serving justice.”
“This fraudulent scheme deceived taxpayers and deprived legitimate small businesses of lucrative contracts,” said GSA Inspector General Ochoa. “We are committed to rooting out such exploitative conduct.”
“The Defense Criminal Investigative Service is committed to working with our partner agencies to combat fraud impacting the Department of Defense's vital programs and operations and maintain the integrity of the procurement system,” said Special Agent in Charge Reihms.
“There is an absolute need and purpose to assist small and disadvantaged businesses in the contracting process,” said Director Robey. “Special Agents from Army CID will continue to work closely with our law enforcement partners to make every contribution possible to bring persons to justice who violate that purpose.”
Harper, 46, of Colchester, Connecticut, was charged in a criminal information on June 6, 2016, in the U.S. District Court for the District of Columbia, with one count of conspiring to obstruct proceedings before a department or agency. He waived the requirement of being charged by way of federal indictment, agreed to the filing of the information, and accepted responsibility for his criminal conduct. The charge carries a statutory maximum of five years in prison and potential financial penalties. According to the government’s calculations, Harper could face a potential range of 10 to 16 months in prison under federal sentencing guidelines. The Honorable Ketanji Brown Jackson scheduled a status hearing in the case for Sept. 20, 2016.
According to court documents, MCC and others conspired with two companies that were eligible to receive federal government contracts set asides for small, disadvantaged businesses with the understanding that MCC would, illegally, perform all of the work. In so doing, MCC was able to win 27 government contracts worth over $70 million from 2008 to 2011. The scope and duration of the scheme resulted in a significant number of opportunities lost to legitimate small and disadvantaged businesses.
Court documents state that in one of these contracts, the GSA contracting officer filed a protest with the SBA, claiming that one of the companies was other than a small business because of its relationship with MCC. The SBA opened a proceeding to determine whether MCC’s bid on behalf of one of the companies violated SBA rules and regulations. Harper and others took steps to corruptly influence, impede, and obstruct the SBA size determination protest by willfully and knowingly making false statements to the SBA about the extent and nature of the relationship between MCC and one of the companies.
Court documents also state that MCC violated the provisions of the SBA 8(a) program. The SBA 8(a) development program is designed to award contracts to businesses that are owned by “one or more socially and economically disadvantaged individuals.” To qualify for the 8(a) program, a business must be at least 51 percent owned and controlled by a U.S. citizen (or citizens) of good character who meet the SBA’s definition of socially and economically disadvantaged. The firm must also be a small business (as defined by the SBA) and show a reasonable potential for success. Participants in the 8(a) program are subject to regulatory and contractual limits. Also, under the program, the disadvantaged business is required to perform a certain percentage of the work. For the types of contracts under investigation here, the SBA 8(a)-certified companies were required to perform 15 percent or more of the work with its own employees.
Earlier this year, MCC pleaded guilty to conspiring to commit fraud on the United States by illegally obtaining government contracts that were intended for small, disadvantaged businesses and agreed to pay $1,769,924 in criminal penalties and forfeiture.
The investigation is being conducted by the FBI’s Washington Field Office, the Inspector General for the Small Business Administration (SBA), the Inspector General of the U.S. General Services Administration (GSA), the Central Field Office of the Defense Criminal Investigative Service (DCIS), and the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
The prosecution is being handled by Assistant U.S. Attorney Matt Graves and John Marston of the U.S. Attorney’s Office for the District of Columbia and Assistant Chief Craig Y. Lee and Trial Attorneys Kevin B. Hart and Justin P. Murphy of the Antitrust Division.
Former MCC Construction Company Officer and Owner Pleads Guilty to Conspiring to Obstruct Government ProceedingRead the Press Release
WASHINGTON – Thomas Harper, a former officer and owner of MCC Construction Company (MCC), pled guilty today to conspiring to obstruct justice before the Small Business Administration (SBA). Harper also agreed to pay restitution in the amount of $165,711.
The plea was announced by U.S. Attorney Channing D. Phillips of the U.S. Attorney’s Office for the District of Columbia; Principal Deputy Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Peggy E. Gustafson, Inspector General for the Small Business Administration (SBA); Carol Fortine Ochoa, Inspector General of the U.S. General Services Administration (GSA); Brian J. Reihms, Special Agent in Charge of the Central Field Office of the Defense Criminal Investigative Service (DCIS), and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
“This prosecution and the broader investigation that led to these charges demonstrate the resolve of law enforcement to protect the integrity of federal contracting rules meant to assist small, disadvantaged businesses,” said U.S. Attorney Phillips. “We are committed to ensuring that the benefits of this important government program go only to those companies that truly are socially and economically disadvantaged and deserving of the work.”
“Today's guilty plea ensures that the defendant does not profit from his crimes,” said Principal Deputy Assistant Attorney General Hesse. “The Antitrust Division will continue to work with our colleagues at the U.S. Attorney’s Office and in law enforcement to expose and punish schemes like this that defraud taxpayers and legitimate small business owners.”
“The FBI will aggressively investigate those who seek to profit by fraudulently competing for government contracts intended for small businesses,” said Assistant Director in Charge Abbate. “I want to thank the dedicated FBI special agents and analysts, as well as our partner agencies, for their hard work in protecting fair federal contracting opportunities for socially and economically disadvantaged businesses in our community.”
“Fraudulently passing work through eligible small businesses to a large business does not provide taxpayers the best value and certainly does not support the role of small businesses as engines of economic development and job creation. In fact, it subverts the purpose of SBA’s preferential contracting programs and harms the small businesses the programs are designed to assist,” said SBA Inspector General Gustafson. “I want to thank the U.S. Attorney’s Office and our law enforcement partners for their leadership and dedication to serving justice.”
“This fraudulent scheme deceived taxpayers and deprived legitimate small businesses of lucrative contracts,” said GSA Inspector General Ochoa. “We are committed to rooting out such exploitative conduct.”
“The Defense Criminal Investigative Service is committed to working with our partner agencies to combat fraud impacting the Department of Defense's vital programs and operations and maintain the integrity of the procurement system," said Special Agent in Charge Reihms.
“There is an absolute need and purpose to assist small and disadvantaged businesses in the contracting process," said Director Robey, "Special Agents from Army CID will continue to work closely with our law enforcement partners to make every contribution possible to bring persons to justice who violate that purpose."
Harper, 46, of Colchester, Conn., was charged in a criminal information on June 6, 2016, in the U.S. District Court for the District of Columbia, with one count of conspiring to obstruct proceedings before a department or agency. He waived the requirement of being charged by way of federal indictment, agreed to the filing of the information, and accepted responsibility for his criminal conduct. The charge carries a statutory maximum of five years in prison and potential financial penalties. According to the government’s calculations, Harper could face a potential range of 10 to 16 months in prison under federal sentencing guidelines. The Honorable Ketanji Brown Jackson scheduled a status hearing in the case for Sept. 20, 2016.
According to court documents, MCC and others conspired with two companies that were eligible to receive federal government contracts set asides for small, disadvantaged businesses with the understanding that MCC would, illegally, perform all of the work. In so doing, MCC was able to win 27 government contracts worth over $70 million from 2008 to 2011. The scope and duration of the scheme resulted in a significant number of opportunities lost to legitimate small and disadvantaged businesses.
Court documents state that in one of these contracts, the GSA contracting officer filed a protest with the SBA, claiming that one of the companies was other than a small business because of its relationship with MCC. The SBA opened a proceeding to determine whether MCC’s bid on behalf of one of the companies violated SBA rules and regulations. Harper and others took steps to corruptly influence, impede, and obstruct the SBA size determination protest by willfully and knowingly making false statements to the SBA about the extent and nature of the relationship between MCC and one of the companies.
Court documents also state that MCC violated the provisions of the SBA 8(a) program. The SBA 8(a) development program is designed to award contracts to businesses that are owned by “one or more socially and economically disadvantaged individuals.” To qualify for the 8(a) program, a business must be at least 51% owned and controlled by a U.S. citizen (or citizens) of good character who meet the SBA’s definition of socially and economically disadvantaged. The firm must also be a small business (as defined by the SBA) and show a reasonable potential for success. Participants in the 8(a) program are subject to regulatory and contractual limits. Also, under the program, the disadvantaged business is required to perform a certain percentage of the work. For the types of contracts under investigation here, the SBA 8(a)-certified companies were required to perform 15 percent or more of the work with its own employees.
Earlier this year, MCC pleaded guilty to conspiring to commit fraud on the United States by illegally obtaining government contracts that were intended for small, disadvantaged businesses and agreed to pay $1,769,924 in criminal penalties and forfeiture.
The investigation is being conducted by the FBI’s Washington Field Office, the Inspector General for the Small Business Administration (SBA), the Inspector General of the U.S. General Services Administration (GSA), the Central Field Office of the Defense Criminal Investigative Service (DCIS), and the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
The prosecution is being handled by Assistant U.S. Attorney Matt Graves and John Marston of the U.S. Attorney’s Office for the District of Columbia and Assistant Chief Craig Y. Lee and Trial Attorneys Kevin B. Hart and Justin P. Murphy of the Antitrust Division.
Former Hancock County, West Virginia, sheriff deputy charged with use of excessive forceRead the Press Release
WHEELING, WEST VIRGINIA – A former Hancock County, West Virginia, Sheriff’s Deputy has been charged with using excessive force against an arrestee, United States Attorney William J. Ihlenfeld, II, announced.
Mark A. Cowden, 51, of Weirton, WV, was indicted by a federal grand jury on one count of “Deprivation of Rights” and one count of “Obstruction of Justice – Falsification of Document.” Cowden is alleged to have used excessive force during an arrest in January of 2015 and to have falsified a document in an attempt to justify his use of force.
Cowden faces up to ten years in prison and a fine up to $250,000 for the deprivation of rights charge and up to twenty years in prison and a fine up to $250,000 for the obstruction charge.
Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Jarod J. Douglas and Department of Justice Civil Rights Trial Attorney Nicholas Murphy are handling the case on behalf of the government. The Federal Bureau of Investigation is investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.Former Fugitive Sentenced to 96 Months in Prison for Embezzling $8.7 Million from EmployerRead the Press Release
CINCINNATI – James T. Hammes, 54, formerly of Lexington, Kentucky, was sentenced in U.S. District Court today to 96 months in prison. Hammes pleaded guilty in October 2015 to one count of wire fraud and agreed to pay nearly $7.7 million in restitution, specifically, approximately $6.7 million to G & J Pepsi-Cola Bottlers, Inc. and $1 million to Cincinnati Insurance Company.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down today by U.S. District Judge Susan J. Dlott.
According to court documents, from about 1998 through February 2009, Hammes embezzled more than $8.7 million from his employer, G & J Pepsi-Cola Bottlers, Inc., a large, privately held manufacturer and distributor of Pepsi products that is headquartered in Cincinnati.
Hammes served as a controller for the company, and was responsible for all financial accounting and internal controls for his division, including supervising accounts payable to vendors for services provided to the company’s division.
The defendant set up phantom vendor accounts and manipulated monthly accounting reports, using a miscellaneous account to charge off fraudulent checks and then manipulating legitimate accounts to offset the amounts carried in the miscellaneous account.
The stolen money that Hammes invested and traded generated IRS 1099 forms. Hammes voluntarily made estimated tax payments to the IRS totaling at least $2.7 million using the funds that he stole from his employer. Despite making the estimated tax payments, he failed to file tax returns for multiple tax years.
Hammes was questioned about the issuance of possible fraudulent checks in February 2009, at which time he fled and spent the majority of six years as a fugitive hiking the Appalachian Trail and living under an alias, which belonged to a real person. Federal criminal charges were filed against Hammes and he was arrested in Virginia in May 2015, following a tip from a hiker who had seen the defendant’s story on television.
“Hammes embezzled a lot of money over a long period of time,” Acting U.S. Attorney Glassman said. “As the district court recognized, his scheme was sophisticated; he abused the trust that his employer had placed in him; and sheer greed motivated him. Hammes followed up his crime by coldly abandoning his family without explanation or warning and running from the law for six years under someone else's name. But no one can run from justice forever, and today his lies were punished. Hammes more than earned every minute of the term of imprisonment that the district court imposed today.”
Acting U.S. Attorney Glassman commended the cooperative investigation by the FBI Cincinnati Division, with assistance from FBI- Richmond Division, FBI- Indianapolis Division, Internal Revenue Service – Criminal Investigation, and the U.S. Marshal’s Service, as well as Deputy Criminal Chief Emily N. Glatfelter and Criminal Chief Kenneth L. Parker, who are prosecuting the case.
Former Employee of Environmental Consulting Firm Sentenced for Bank FraudRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that EILEEN JOANNE CRUZ QUITUGUA, age 31, was sentenced today by Chief Judge Frances Tydingco-Gatewood of the District Court of Guam to serve 30 months in federal prison, and five years of supervised release, and to pay $159,735.76 in restitution and a $400 special assessment fee. Defendant QUITUGUA pled guilty on December 3, 2015, to four counts of bank fraud in violation of Title 18, United States Code, Section 1344.
In her plea agreement, QUITUGUA admitted that from October 2011 to January 2014, she embezzled $159,735.76 from her employer Allied Pacific Environmental Consulting (APEC). APEC hired her as its bookkeeper and she was responsible for preparing checks drawn on the company’s checking accounts maintained at First Hawaiian Bank. QUITUGUA forged the signatures of the company owner and other authorized personnel on 221 company checks that totaled $159,735.76. She wrote payroll checks for herself and checks ostensibly for petty cash, and used the stolen funds for her personal benefit.
U.S. Attorney Limtiaco stated “The U.S. Attorney’s Office and its law enforcement partners are committed to investigating and prosecuting those who victimize and perpetrate fraud against members of our community, including businesses and financial institutions.”
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Marivic David.
Five Columbus, Ohio residents charged with transporting stolen goodsRead the Press Release
WHEELING, WEST VIRGINIA – A federal grand jury returned an indictment charging Maurice L. Whyte, II, 23, Kasie A. Morgan, 24, Kionte K. Whatley, 19, Marilyn Whatley, 37, and Jolisha McDonald, 25, all of Columbus, Ohio, with transporting stolen goods, United States Attorney William J. Ihlenfeld, II, announced.
From January 2014 through June 2015, all five individuals allegedly conspired with one another to steal primarily smart phones, tablets, head phones, games stations, and computers from Walmart, Target, and Meijer stores in eight different states, including West Virginia and Ohio. The value of the stolen goods are estimated to be in excess of $500,000.
Whyte, Morgan, Kionte Whatley, Marilyn Whatley, and McDonald are each charged with one count of “Conspiracy to Transport Stolen Goods in Interstates Commerce.” Whyte, Morgan, Marilyn Whatley, and McDonald are also each charged with two counts of “Interstate Transportation of Stolen Property.” They face up to five years in prison and a fine up to $250,000 for the conspiracy charge and up to ten years in prison and a fine up to $250,000 for each of the interstate transportation of stolen property charges. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Robert H. McWilliams, Jr. is prosecuting the case on behalf of the government. The Federal Bureau of Investigation and the Columbus, Ohio Police Department are investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Fifteen Charged in Middle District as Part of Largest National Health Care Fraud Takedown in HistoryRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III, 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 our nation’s health care programs is a top priority of our Office,” said U.S. Attorney Bentley. “We are committed to prosecuting all those who submit false claims to these important programs, whether they be health care providers or dishonest individuals seeking benefits to which they are not entitled. Every tax dollar appropriated by Congress for health care should be spent on deserving patients in need.”
In the Middle District of Florida, 15 individuals were charged with participating in a variety of schemes, including compound pharmacy fraud and intravenous prescription drug fraud involving millions in fraudulent billing. Among those charged are business owners, a registered nurse, a pharmacist, and a physician’s assistant.
“Health care providers and patients are key to protecting the Medicare and Medicaid programs, but when they instead choose to commit fraud or to lie in order to obtain government benefits they are not entitled to, they steal precious tax dollars and corrupt the integrity of our health care system,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health & Human Services Office of Inspector General (HHS OIG). "This takedown reflects the dedication of OIG and our law enforcement partners to bring such fraudsters to justice."
“The Social Security Office of the Inspector General is committed to pursuing those who violate the public’s trust by stealing SSA benefits. We are pleased with the aggressive action by the U.S. Attorney’s Office and our law enforcement partners’ joint efforts in identifying and prosecuting those who commit fraud, as one of our many efforts to protect the integrity of Social Security and Medicare programs for those who rely on them now and into the future,” stated Special Agent-in-Charge Margaret Moore-Jackson, SSA/Office of the Inspector General.
"These arrests highlight the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense (DoD) health care program-Tricare," said Special Agent in Charge John F. Khin, Southeast Field Office. "DCIS aggressively investigates health care providers that defraud the DoD, to preserve American taxpayer dollars intended to care for our Warfighters, their family members, and military retirees."
“Despite recent challenging events occurring in our territory, FBI Tampa remained devoted to dedicating resources to the National Health Care Fraud initiative,” stated FBI Special Agent in Charge Paul Wysopal. “Agents will continue to identify and investigate individuals who seek to personally benefit from the medical needs of a very vulnerable population.”
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 agents from the FBI, HHS-OIG, Drug Enforcement Administration, DCIS, SSA-OIG, 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.
Middle District of Florida Cases
Yosbel Marimon (39, Winter Park), owner of several Orlando-area infusion clinics, was indicted on one charge of conspiracy to commit health care fraud and wire fraud, six counts of health care fraud, and one count of conspiracy to commit money laundering. The charges stem from her role in a scheme to defraud Medicare by billing for more than $11.1 million in expensive intravenous prescription drugs that the clinics never purchased, never administered, and were not medically necessary. As a result of the scheme, Medicare paid over $8.6 million in fraudulent claims.
Greggory Jackson (40, Eagle Lake), Dustin “Drey” Chennells (40. Mount Dora), Michael Ayotunde (53, Ocala), Tashima Kenny (32, Davenport), Iris Ayala (54, Clermont), and Nalita Rajkumar (28, Lake Park) were indicted on a charge of conspiracy to commit health care fraud and wire fraud. Jackson also was indicted on two charges of receiving illegal kickbacks, two charges of paying illegal kickbacks, and two counts of money laundering. Kenny was also indicted on one count of money laundering. Jackson, Chennells, Kenny, and others managed and operated a telemarketing call center known as DMA Logistics d/b/a Nation Wide Meds located inside Life Worth Living Pharmacy. Ayotunde, a licensed pharmacist, is the owner and operator of Life Worth Living Pharmacy. Ayala is a licensed physician, and Rajkumar is a licensed physician assistant. The charges stem from these individuals’ roles in a compounding pharmacy fraud scheme that victimized the TRICARE program. Based on false and fraudulent claims, TRICARE made more than $5.7 million in reimbursement payments to Life Worth Living Pharmacy.
Belinda Jalloh (60, New Port Richey), a registered nurse, has been charged with one count of theft of government services stemming from her violation of an order from the Department of Health and Human Services excluding her from participating in the Medicare program. The order prohibited her from treating Medicare beneficiaries. Despite the exclusion, she applied for, and obtained, employment at a facility that billed Medicare for her treatment of Medicare beneficiaries.
Robert Lee Lanier (57, Jacksonville) has been charged with one count of theft of government property and one count of making a false statement. Lanier provided false information regarding his employment to the Social Security Administration. Between 2007 and January 2016, Lanier collected more than $236,682 in Social Security and Medicare benefits to which he was not entitled.
Maria Lugo (65, Marion County) was indicted for theft of government funds stemming from her concealment of her living arrangements while simultaneously collecting disability benefit payments from the Social Security Administration. Lugo falsely claimed a separation from her husband, whose income rendered her ineligible to receive disability benefits and Medicaid. From June 2000 through May 2016, Lugo obtained $118,346.12 in SSA benefit payments and $99,483.62 in Medicaid utilization that she was not entitled to receive.
Janice and Thurman Hammock (66 and 62, Citrus County) were indicted for theft of government funds stemming from their concealment of their living arrangements while Janice Hammock collected disability benefit payments from the Social Security Administration. Both spouses falsely claimed to be separated from one another, causing the wife to receive substantially more federal benefits than otherwise permitted. She illegally obtained $75,048.89 in SSA benefit payments and $101,465.07 in Medicaid utilization from January 2004 through May 2016.
Louis William Rimondi, IV (47, Marco Island) was indicted on two charges of theft of government money stemming from his alleged concealment from the Social Security Administration and Medicare of his return to gainful employment while continuing to collect disability benefits and Medicare benefits. From January 2010 through February 2016, Rimondi fraudulently collected $101,466 in SSA disability benefits to which he was not entitled. From January 2011 through February 2016, he also fraudulently received $20,467 in Medicare benefits to which he was not entitled.
Douglas Thompson (51, Jacksonville) was indicted on one count of theft of government property, one count of making a false statement, and three counts of wire fraud stemming from his role in a scheme to fraudulently receive approximately $108,834 in benefits under the Federal Medicaid Health Care Benefit Program and the Supplemental Security Income Program. For more than five years, Thompson collected benefits by falsely claiming he was unemployed and had no income when, in fact, he operated a business, Douglas Thompson Industries Inc. (or DTI Inc.), which brokered the sale of trucking equipment. When questioned about DTI Inc., Thompson provided a written statement to the Social Security Administration that falsely stated that he had never heard of DTI Inc. and was not working.
Craig DeMange, Sr. (62, Oviedo) was indicted on one count of making a false statement to the Social Security Administration concerning his employment, which hindered the agency’s efforts to determine his continued eligibility for disability benefits. As a result of DeMange’s false statement, he defrauded the SSA and the United States Department of Health and Human Services of approximately $25,000 in disability and Medicare benefits.
These cases will be prosecuted by Middle District of Florida Assistant United States Attorneys Yolande G. Viacava, Emily C.L. Chang, William S. Hamilton, Michael J. Coolican, Mac Heavener, and Department of Justice Trial Attorneys Timothy Loper and Christopher Hunter of the Criminal Division’s Fraud Section.
Maximum Penalties per charge:
Theft of Government Money: 10 years in federal prison.
Conspiracy to Commit Healthcare Fraud and Fraud: 20 years in federal prison.
Healthcare Fraud: 10 years in federal prison.
Conspiracy to Commit Money Laundering: 20 years in federal prison.
Money Laundering: 10 years in federal prison.
False Statement: 5 years in federal prison.
Wire Fraud: 20 years in federal prison.
Federal Court Prohibits Florida Tax Preparer from Preparing Tax Returns for OthersRead the Press Release
A federal court in Tampa, Florida, has permanently barred a Bradenton, Florida, man from preparing federal tax returns for others, the Justice Department announced today.
In April, the United States filed a civil complaint against Guy Riston Paul, individually and doing business as G7 Financial Enterprises & More, G7 Accounting and Tax Services and Voltaire Multi-Services. Paul, who is currently serving a three-year prison term for engaging in the preparation of false tax returns and for failing to report income he earned from his tax preparation business, consented to entry of the injunction, but he did not admit the allegations in the United States’ complaint.
According to the civil complaint, Paul prepared federal income tax returns for customers that overstated his customers’ refunds by taking the identities of dependents from customers who were not U.S. citizens and claiming them on the tax returns of his U.S. citizen customers. Paul used this scheme to claim improper Earned Income Tax Credits and Child Tax Credits, the complaint alleges. Paul also allegedly claimed other false credits, such as the education tax credit, on his customers’ returns.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Fairmont man pleads guilty to federal firearm chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Joshua Cline, 23, of Fairmont, WV, pled guilty to a federal firearm charge today, United States Attorney William J. Ihlenfeld, II, announced.
Cline was found in possession of a 9mm caliber pistol in Marion County, West Virginia. Cline used that firearm in furtherance of his marijuana distribution operation.He pled guilty today to one count of “Possession of Firearm in Furtherance of Drug Trafficking Crime.” He faces up to five years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Three Rivers Drug Task Force investigated.U.S. District Judge Irene M. Keeley presided.
Executive Director Charged with Embezzling from Charity to Fund Home Renovations and Personal ExpensesRead the Press Release
Earlier today, a federal grand jury sitting in Brooklyn returned an indictment charging Yolanda Vitulli, the executive director of a charity that provides services to individuals with developmental disabilities, with embezzling approximately $100,000 from the charity for her personal use.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and New York State Inspector General Catherine Leahy Scott.
As is alleged in the indictment, between January 2001 and May 2016, Vitulli served as the Executive Director of Tender Care Human Services Inc. (Tender Care), a not-for-profit social service provider based in Queens, New York, that provided services to individuals with autism and other development disabilities throughout the New York City metropolitan area. Tender Care received approximately $3 million in federal and New York State Medicaid funding each year to provide the services.
The government’s investigation revealed that between 2009 and May 2014, Vitulli embezzled Tender Care funds to pay housekeepers to clean her residence, do laundry, and provide childcare. Additionally, between January 2012 and November 2013, Vitulli used Tender Care funds to hire a contractor to perform work at her residence, including purchasing and installing a hot tub, fence, furniture, and security cameras.
“The embezzlement of public funds meant to benefit members of our communities most in need of assistance is a serious crime,” stated United States Attorney Capers. “With this indictment, we serve notice that those who engage in such conduct will be vigorously investigated and prosecuted by this Office.” Mr. Capers extended his grateful appreciation to the United States Department of Labor, Office of the Inspector General, for its assistance.
“The very definition of charity is to give to those in need. Instead, the subject in this case decided the $100,000 she’s accused of stealing would be better spent making her life easier. Theft is a crime, but to take from those who are in need of help makes this case more egregious,” stated FBI Assistant Director-in-Charge Rodriguez.”
“The defendant allegedly stole public funds meant for the developmentally disabled in order to subsidize her own life of luxury,” said New York State Inspector General Leahy Scott. “This indictment should serve as warning to any officers and agents of charitable providers who exploit taxpayer funds intended for critical public services; they will be identified, apprehended, and prosecuted to the fullest extent of the law. I will continue to work closely with my state and federal law enforcement partners to pursue and hold accountable anyone who attempts to defraud the public welfare system and the people it serves.”
The charge in the indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted of embezzling public funds, the defendant faces a maximum sentence of ten years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Robert Polemeni and Nathan Reilly.
The Defendant:
YOLANDA VITULLI
Age: 52
Mohnton, PennsylvaniaE.D.N.Y. Docket No. 16-CR-344
Egegik Man Indicted by Federal Grand Jury for Drug TraffickingRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a Egegik man has been charged with possessing with the intent to distribute over 500 grams or more of methamphetamine.
Jason Corey Vincent Alto, 20, of Egegik, Alaska, was charged with possessing nearly three pounds of methamphetamine while traveling on the Alaska Marine Highway System M/V Kennicott. Alto was traveling from Washington to Whittier, Alaska, when he was contacted in Ketchikan and a search of his luggage revealed methamphetamine. Alto was subsequently arrested on State charges and is currently in custody in Ketchikan.
According to Assistant U.S. Attorney Jack S. Schmidt, who presented the case to the grand jury, the law provides for a mandatory minimum sentence of 10 years to a maximum of up to life in prison, a fine of up to $10,000,000.
The United States Coast Guard Investigative Service and the Alaska State Troopers Drug Unit conducted the investigation leading to the indictment in this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Eagle Butte Man Sentenced for LarcenyRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of larceny was sentenced on June 20, 2016, by U.S. District Judge Roberto A. Lange.
Sage Nelson, age 29, was sentenced to time served, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Nelson was indicted for Larceny by a federal grand jury on December 8, 2015. He pled guilty on March 29, 2016.
The conviction stems from a June 19, 2015, incident when Nelson stole a pickup truck that was parked in front of the Eagle Bar in Eagle Butte. The owner had left the keys in the vehicle while he went inside to visit with his brother. Acting on a report from Nelson’s girlfriend, law enforcement located the vehicle and a Corson County deputy conducted a felony (high-risk) traffic stop about 76 miles from where the vehicle was stolen. Nelson was the driver and lone occupant of the vehicle. His BAC was .156 and several open containers were recovered from the interior of the vehicle.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services, the Corson County Sheriff’s Department, the Mobridge City Police Department, the Walworth County Sheriff’s Department, the Bureau of Indian Affairs, Standing Rock Agency, and the Federal Bureau of Investigation. Assistant U.S. Attorney Jay Miller prosecuted the case.
Downtown Newark Heroin and Oxycodone Dealer Pleads Guilty to Drug Distribution Conspiracy, Firearms OffenseRead the Press Release
NEWARK, N.J. – A Newark man today admitted distributing large quantities of heroin and oxycodone in and around downtown Newark, U.S. Attorney Paul J. Fishman announced today.
Lamont Vaughn a/k/a “Mont,” a/k/a “True V,” 33, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to Count One and Count Fourteen of an indictment charging him with conspiracy to distribute 100 grams or more of heroin and oxycodone and being a felon in possession of a firearm.
According to documents filed in this case and statements made in court:
Between August 2012 and August 7, 2013, Vaughn conspired with others to distribute large quantities of heroin and oxycodone out of a downtown Newark clothing store called Ballas Boutique. Over the course of the conspiracy, Vaughn and others sold drugs out of Ballas Boutique to a confidential source more than 35 times. The majority of the sales were audio and video recorded.
Additionally, law enforcement intercepted conversations of Vaughn and his conspirators pursuant to court orders. The intercepted conversations revealed that Vaughn had multiple employees who sold drugs for him at Ballas Boutique. The intercepted conversations further revealed that Vaughn had multiple, established sources of supply for heroin and oxycodone.
On Aug. 7, 2013, law enforcement officers executed arrest and search warrants at Ballas Boutique and at Vaughn’s home in Newark. Among the items recovered from Vaughn’s bedroom were dozens of oxycodone pills, two firearms, and a large amount of cash.
Under the terms of today’s plea agreement – which has been accepted by the court – Vaughn will be sentenced to 65 months in prison and up to five years of supervised release. Sentencing is scheduled for Oct 5, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, as well as the N.J. State Police Street Gangs North Unit with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys Margaret Ann Mahoney and Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Lamont Vaughn, Pro SeDisbarred Atlantic Beach Attorney Sentenced for EmbezzlementRead the Press Release
Jacksonville, Florida – Senior United States District Judge Henry Lee Adams, Jr. has sentenced William Reid Penuel (38, Ponte Vedra Beach) to six months in federal prison, followed by three years of supervised release, for embezzlement from a bankruptcy estate. While on supervised release, Penuel must serve six months of home detention, and participate in ongoing drug testing and treatment. He was also ordered to pay $151,239 in restitution.
On March 15, 2016, Penuel pleaded guilty to embezzlement. According to the Florida Bar, in April 2016, he was disbarred from practicing law.
According to court records, between March 2015 and July 2015, Penuel was serving as the Chapter 7 Trustee in a pending business bankruptcy case in Tallahassee when he embezzled estate funds held in a bank account in Duval County. At the time, he was a licensed attorney whose office was located in Atlantic Beach. After becoming the Chapter 7 Trustee for the debtor, Penuel assumed responsibility for approximately $909,000 in estate funds, which he deposited into his bank account. Penuel began diverting estate funds, which had been authorized by the bankruptcy court to pay certain expenses, to his own use. As the authorized signor on the estate bank account, Penuel made withdrawals and then re-deposited the monies into other accounts that he controlled. Once the funds were placed into his operating account, Penuel withdrew the funds. The scheme involved approximately 20 withdrawals from the estate bank account, totaling approximately $151,239.
This case was investigated by the Federal Bureau of Investigation - Jacksonville Office. It was prosecuted by Assistant United States Attorney Dale Campion.
Delaware County Podiatrist Charged with $5 Million Health Care Fraud SchemeRead the Press Release
PHILADELPHIA – Stephen A. Monaco, D.P.M., 59, of Broomall PA was charged by criminal information, unsealed today, in connection with a $5 million scheme to defraud Medicare, Medicaid and four private victim insurance companies, announced United States Attorney Zane David Memeger. The information alleges that Dr. Monaco committed the fraud through his practice, A Foot Above Podiatry, Inc. (“A Foot Above”), located in Havertown PA.
According to the information, between January 2008 and October 31, 2014, Dr. Monaco submitted fraudulent claims to Medicare, Medicaid and four private victim insurance companies for podiatric procedures that were not provided, and podiatric procedures that were not performed, including injections, debridement (removal of dead, infected or foreign material to promote wound healing) and nail avulsions (removal of the entire or partial nail plate). In addition, according to the information, Dr. Monaco submitted fraudulent claims to Medicare, Medicaid and four private victim insurance companies for medically unnecessary procedures and services that were not reimbursable by Medicare or the other insurance carriers. In total, it is alleged that the defendant caused the submission of fraudulent claims to Medicare, Medicaid and the four private victim insurance companies that resulted in payments by the victim insurers to the defendant’s practice totaling approximately $5 million.
If convicted, defendant Monaco faces up to 10 years in prison, $5 million restitution, substantial fines, and criminal forfeiture.
The case was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services Office of the Inspector General, the Drug Enforcement Administration, the Office of Personnel Management Office of the Inspector General, and the United States Railroad Retirement Board Office of Inspector General. It is being prosecuted by Assistant United States Attorneys M. Beth Leahy and Jennifer B. Jordan.
Cuban National Pleads Guilty to Wire Fraud ChargeRead 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 Yasser Carrillo Chartrand, 24, a citizen of Cuba legally present in the United States, pleaded guilty before U.S. District Court Judge Richard J. Arcara, to conspiracy to commit wire fraud. The charge carries a maximum penalty of 20 years in prison, and a fine of $250,000.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who is handling the case, stated that Chartrand is one of six defendants arrested in a credit card scheme. Eduardo Hernandez Quinones, Claudia Diaz Diaz, Yaily Santurio Milian, Jose Valdivia Quinones and Misael Toledo Rios have all been convicted and sentenced for their involvement in the scheme.
The six defendants conspired to obtain the credit/debit card numbers of actual people and then encoded counterfeit cards with the information. The defendants then used the counterfeit cards to purchase merchandise at retail stores including a Tops Market in Amherst, NY and a CVS Pharmacy in Buffalo, NY, and gas stations throughout Western New York. The gasoline that was purchased with counterfeit credit cards was re-sold for cash.
Today’s plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, the U.S. Secret Service, under the direction of Special Agent in Charge C. Todd Laster, and the New York State Police, under the direction of Major Steven Nigrelli.
Sentencing is scheduled for September 28, 2016 at 12:30 p.m. before Arcara.Crawford County Woman to Federal Prison for Meth ConspiracyRead the Press Release
A woman who conspired to distribute methamphetamine was sentenced June 21, 2016, to five years in federal prison.
Katja Bails, 36, from Kiron, Iowa, received the prison term after a July 17, 2015, guilty plea to conspiracy to distribute methamphetamine.
At the guilty plea, Bails admitted that from about 2012 and continuing through November 2014 she was involved in a conspiracy that distributed more than 5,000 grams of actual (pure) methamphetamine. Bails traveled periodically from the Denison, Iowa, area to Omaha, Nebraska to obtain large quantities of methamphetamine which she then distributed in the Denison and Ida Grove, Iowa areas.
Bails was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Bails was sentenced to 60 months’ imprisonment. A special assessment of $100 was imposed. She must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
Bails is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by the Iowa Division of Narcotics Enforcement, Ida County Sheriff’s Office, Denison Police Department, and Iowa Division of Criminal Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 14-4086.
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Couple Agree to Plead Guilty to more than $1 Million in Health Care FraudRead the Press Release
COLUMBUS, Ohio – Riyad Altallaa, 51, and Muna Alnoubani, 49, both of Hilliard, each agreed to plead guilty in U.S. District Court to conspiracy to commit health care fraud.
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 300 individuals, including 61 doctors, nurses and other 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.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, Lamont Pugh, Special Agent in Charge, Department of Health and Human Services Office of Inspector General, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Ohio Attorney General Mike DeWine and Kathy Enstrom, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, announced the pleas filed today.
According to court documents, Altallaa and Alnoubani were owners of Columbus Home Health Care Services, LLC. The couple executed a fraud scheme in order to minimize expenses and maximize profits by fabricating aide training records to avoid the time and expense of training and to give the appearance that aides had completed the required training and were prepared to provide home health services to Medicare and Medicaid beneficiaries.
The defendants also had aides and nurses submit blank time sheets and nursing notes that the defendants completed with falsely inflated hours of service.
Finally, they had aides and nurses “split” their shifts on their timesheets and nursing notes to make it appear that services were provided in multiple shifts rather than one shift. Under Medicaid’s reimbursement policy, the initial hour of each shift is reimbursed at a rate that is approximately double the rate of subsequent hours.
Altallaa and Alnoubani each agreed to plead guilty to one count of conspiracy to commit health care fraud. Altallaa also agreed to plead guilty to one count of money laundering. Each crime carries a potential maximum sentence of 10 years in prison.
The couple used the fraud money to build a luxurious, $1 million home in Hilliard. As part of the plea agreements, they will forfeit that home.
“The detection, investigation and prosecution of individuals and entities who engage in committing criminal acts of fraud in the home health care arena, whether it be the Medicare or Medicaid program, is a top priority for the OIG” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “The OIG will continue to work with our law enforcement partners to protect taxpayer dollars and ensure that perpetrators of these fraud schemes are held accountable.”
Including today’s enforcement actions, nearly 1,200 individuals have been charged in national 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 sweep, and they accounted for 82 defendants charged in this effort.
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 Ohio, 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.
Acting U.S. Attorney Glassman commended the investigation of this case by the FBI, HHS-OIG Ohio Attorney General’s Medicaid Fraud Control Unit and IRS Criminal Investigation, as well as Assistant United States Attorney Kenneth Affeldt and Special Assistant United States Attorney Maritsa Flaherty, who are representing the United States in this case.