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Wednesday 13 April 2016
Former Part-Time Associate Pastor to Serve Nine Years in Federal Prison for Defrauding InvestorsRead the Press Release
Fort Smith, Arkansas – Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Thomas Edward James, age 34, of Phoenix, Arizona, formerly of Fort Smith, was sentenced to 108 months imprisonment and three years of supervised release on one count of Mail Fraud and 36 months imprisonment and one year of supervised release on one count of Making a False Tax Return; the sentences are to run concurrently with each other. He was also ordered to pay restitution in the amount of $524,203.46. The Honorable Chief Judge P.K. Holmes, III, presided over the sentencing hearing in the United States District Court in Fort Smith.
According to facts set forth in the plea agreement, the defendant, Thomas Edward James, was a part-time associate pastor at St. James Missionary Baptist Church in Fort Smith, Arkansas who fraudulently induced his victims, a majority of whom were retired and members of the St. James Missionary Baptist Church, to invest their funds in what he falsely represented to be U.S. Treasury Bonds with a rate of return of in excess of 20 percent when in fact James did not invest the funds but converted them to his personal use. James also admitted as part of his plea agreement that he filed false tax returns from 2008-2012, and that he owed the United States additional taxes in the amount of $205,566.46. James pleaded guilty to an Information that was filed on September 10, 2015.
“James used his position as a pastor, a position of trust, to prey on investors and steal their hard earned money,” stated Tracey D. Montaño, Special Agent in Charge, IRS-Criminal Investigation. “This case should be a reminder, no matter the source of income, all income is taxable. The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS' enforcement strategy. We are proud to work with our other law enforcement partners to bring this case to a successful resolution.”
“Today, justice was served as James was sentenced for his despicable participation in defrauding his trusting church members and falsifying his tax returns,” said Assistant Special Agent in Charge David Shepard of the Federal Bureau of Investigation in Little Rock. “We appreciate the efforts of the United States Attorney’s Office, the Internal Revenue Service, and the Fort Smith and Fayetteville Police Departments.”
This case was investigated by The Internal Revenue Service (IRS), the Federal Bureau of Investigation (FBI) and Financial Crimes Task Force officers from the Fort Smith and Fayetteville Police Departments. Assistant United States Attorney Mark Webb prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Former KC Attorney Pleads Guilty to $1.2 Million Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Kansas City, Mo., attorney pleaded guilty in federal court today to stealing more than $1.2 million from St. Luke’s Health System, a client of his former law firm.
Alan B. Gallas, 64, of Kansas City, waived his right to a grand jury and pleaded guilty before U.S. District Judge Beth Phillips to a federal information that charges him with mail fraud. Gallas was an attorney and partner in the law firm of Gallas & Shultz in Kansas City, Mo. He surrendered his license to practice law in Missouri and Kansas in November 2015.
By pleading guilty today, Gallas admitted that he engaged in a scheme from 2009 through July 2015 to defraud a client, St. Luke’s Health System, of monies collected by his law firm totaling $1,224,264. Under the terms of today’s plea agreement, Gallas must pay $1,224,264 in restitution to St. Luke’s.
Gallas was the attorney responsible for the St. Luke’s account at the law firm. After attempting to collect on patient accounts for a period of time, St. Luke’s would transfer its larger outstanding patient accounts to Gallas & Shultz for collection. As payments on patient accounts were received, the payments were logged into the case management system for the appropriate patient account. The monies were then deposited into the law firm’s trust account. On a periodic basis, often monthly, the firm would remit the patient payments collected to St. Luke’s.
Gallas admitted today that he caused personnel at the law firm to withhold money from payments made to St. Luke’s by placing thousands of payments on “hold” status, then directing those funds be transferred from the trust account to the firm’s operating account. The pattern of not remitting some payments to St. Luke’s escalated significantly from 2012 to 2015. According to court documents, Gallas withheld 601 payments totaling $211,391 in 2012. Gallas withheld 699 payments totaling $266,696 in 2013. Gallas withheld 625 payments totaling $227,892 in 2014. Through the month of July 2015, Gallas withheld 625 payments totaling $216,845.
Under federal statutes, Gallas is subject to a sentence of up to 20 years in federal prison without parole. 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. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the FBI.
Former Insurance Agency Owner Sentenced to More Than 6 Years in Federal Prison for $2 Million Fraud SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that EARL O’GARRO, JR., 33, formerly of Marlborough, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 78 months of imprisonment, followed by three years of supervised release, for defrauding a specialty lender, insurance carriers and the State of Connecticut.
On December 14, 2015, a jury found O’GARRO guilty of two counts of wire fraud and one count of mail fraud.
According to the evidence at trial, O’GARRO was the President, Chief Executive Officer and an owner of Hartford-based Hybrid Insurance Agency, LLC (“Hybrid”), a wholesale insurance brokerage specializing in placing excess and surplus line insurance products.
Beginning in approximately April 2013, O’GARRO defrauded Capital Premium Financing, Inc., a specialty lender that provides premium financing on behalf of insured entities. O’GARRO falsely represented to Capital Premium Financing that an insurance carrier, AmTrust E&S Insurance Services, Inc. (“AmTrust”), had issued insurance policies for four companies, that these companies were using Capital Premium Financing’s services to finance their premium payments, and that Hybrid had brokered the contracts and was entitled to collect the premiums on behalf of AmTrust. In fact, O’GARRO knew that AmTrust had not issued policies for any of these four companies. Relying on O’GARRO’s misrepresentations, Capital Premium Financing subsequently released $849,282.55 in premium payments to Hybrid on the purported insurance policies. O’GARRO converted the funds to his own use.
In July 2013, as part of an effort to prolong the scheme, O’GARRO created an email address and Internet domain name similar to that of AmTrust in order to assume a false identity as an AmTrust underwriter. Posing as an AmTrust underwriter, O’GARRO sent an email to Capital Premium Financing to falsely verify the existence of the four policies.
Hybrid also served as the wholesale broker for certain insurance policies held by the City of Hartford. In July 2013, O’GARRO directed the city to transfer $868,244 in premiums to Hybrid. After the City of Hartford wired Hybrid the funds, O’GARRO intentionally withheld $669,997 in premium payments from the appropriate excess insurance carries, Starr Indemnity & Liability Company, Inc. and National Casualty Company. Instead, O’GARRO converted the money to his own use. In fact, approximately 17 minutes after receiving the funds, O’GARRO wired $300,000 to Capitol Premium Financing as partial repayment for the monies he had been caught stealing from them. O’GARRO then falsely advised the city that the premium payments had been remitted to the insurers.
The evidence at trial also established that, in approximately July 2013, O’GARRO, on behalf of Hybrid, submitted a false application to the State of Connecticut Department of Economic and Community Development (“DECD”) for a $500,000 loan. In his application, O’GARRO provided false information concerning his and Hybrid’s financial condition. Based in part on these false statements, DECD approved Hybrid’s loan application and mailed a $250,000 check to Hybrid. O’GARRO used a substantial portion of these loan funds to make a payment on a million dollar condominium he had purchased in the Dominican Republic and to pay tuition at his children’s private school.
Through this scheme, O’GARRO stole more than $2.1 million from his victims and used the stolen funds on personal expenses and to prop up his failing business.
Judge Thompson ordered O’GARRO to pay restitution in the amount of $1,307,326.09, which reflects a partial repayment that O’GARRO made to one of his victims.
O’GARRO has been released on a $500,000 bond since his arrest on November 21, 2014. He was ordered to report to prison on May 13, 2016.
This matter was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Avi M. Perry and Michael J. Gustafson.
Former Health Care Clinic Consultant and Biller Sentenced to 135 Months in Miami for Role in $63 Million Medicare Fraud SchemeRead the Press Release
A former health care clinic consultant and Medicare biller was sentenced to 135 months in prison and ordered to pay a $100,000 fine for her role in laundering money in connection with a $63 million health care fraud scheme involving a now-defunct Miami health provider.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Nery Cowan, 53, of Miami, was sentenced yesterday by U.S. District Judge Beth Bloom of the Southern District of Florida. Cowan pleaded guilty to one count of conspiracy to commit money laundering on Jan. 14, 2016.
As part of her guilty plea, Cowan admitted to serving as a consultant and Medicare biller for Greater Miami Behavioral Healthcare Center Inc. (Greater Miami), a partial hospitalization program (PHP) located in Miami, which purported to provide intensive treatment for the severely mentally ill. During the course of the scheme, Cowan directed and authorized the payment of kickbacks and bribes to patient brokers and others in exchange for Medicare beneficiary referrals, she admitted. Cowan also admitted that Greater Miami personnel routinely falsified medical records affiliated with these recruited Medicare beneficiaries to support false and fraudulent claims to Medicare. Cowan received a percentage of the Medicare reimbursement from Greater Miami’s PHP as compensation, she admitted.
Cowan also admitted that she, along with co-defendants Dean Butler and Irina Mora, took great lengths to conceal kickback payments to shell companies owned by “patient brokers” who, on behalf of Greater Miami, solicited Medicare beneficiaries from assisted living facilities, halfway houses and drug courts located throughout the Southern District of Florida. According to her plea, Cowan, Butler and Mora disguised these monthly kickbacks as “outreach” or “marketing” payments through HNB-Stell Care Inc., a sham staffing company.
On Nov. 30, 2015, Judge Bloom sentenced Butler and Mora to 16 years and nine years in prison, respectively, following their guilty pleas.
According to court documents, from 2006 through 2014, Greater Miami billed Medicare approximately $63 million for purported mental health services.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. Assistant Chief Allan J. Medina and Trial Attorney Elizabeth Young of the Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Health Care Clinic Consultant and Biller Sentenced to 135 Months in Miami for Role in $63 Million Medicare Fraud SchemeRead the Press Release
A former health care clinic consultant and Medicare biller was sentenced to 135 months in prison and ordered to pay a $100,000 fine for her role in laundering money in connection with a $63 million health care fraud scheme involving a now-defunct Miami health provider.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Nery Cowan, 53, of Miami, was sentenced yesterday by U.S. District Judge Beth Bloom of the Southern District of Florida. Cowan pleaded guilty to one count of conspiracy to commit money laundering on Jan. 14, 2016.
As part of her guilty plea, Cowan admitted to serving as a consultant and Medicare biller for Greater Miami Behavioral Healthcare Center Inc. (Greater Miami), a partial hospitalization program (PHP) located in Miami, which purported to provide intensive treatment for the severely mentally ill. During the course of the scheme, Cowan directed and authorized the payment of kickbacks and bribes to patient brokers and others in exchange for Medicare beneficiary referrals, she admitted. Cowan also admitted that Greater Miami personnel routinely falsified medical records affiliated with these recruited Medicare beneficiaries to support false and fraudulent claims to Medicare. Cowan received a percentage of the Medicare reimbursement from Greater Miami’s PHP as compensation, she admitted.
Cowan also admitted that she, along with co-defendants Dean Butler and Irina Mora, took great lengths to conceal kickback payments to shell companies owned by “patient brokers” who, on behalf of Greater Miami, solicited Medicare beneficiaries from assisted living facilities, halfway houses and drug courts located throughout the Southern District of Florida. According to her plea, Cowan, Butler and Mora disguised these monthly kickbacks as “outreach” or “marketing” payments through HNB-Stell Care Inc., a sham staffing company.
On Nov. 30, 2015, Judge Bloom sentenced Butler and Mora to 16 years and nine years in prison, respectively, following their guilty pleas.
According to court documents, from 2006 through 2014, Greater Miami billed Medicare approximately $63 million for purported mental health services.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. Assistant Chief Allan J. Medina and Trial Attorney Elizabeth Young of the Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Fox40 Web Producer Sentenced to Prison for Attack on Media SitesRead the Press Release
SACRAMENTO, Calif. — Matthew Keys, 29, former web producer and network site administrator for KTXL FOX40, a Sacramento television station, was sentenced today to two years in prison for inciting, assisting, and conducting a weeks-long campaign of online attacks against FOX40 and The Los Angeles Times, United States Attorney Benjamin B. Wagner and FBI Special Agent in Charge Monica M. Miller announced.
On October 7, 2015, following an eight-day trial, a jury found Keys guilty of one count of conspiracy to make unauthorized changes to the Tribune Company’s websites and damage its computer systems, one count of transmitting malicious code, and one count of attempted transmission of malicious code.
At sentencing, United States District Judge Kimberly J. Mueller stated: “Ultimately, his downfall came from playing his former employer against Anonymous, while holding himself out as a professional journalist. … The mask that Mr. Keys put on appeared to allow a heartless character to utter lines that are unbecoming a journalist.” Judge Mueller ordered Keys to begin serving his sentence on June 15, 2016.
“Although this case has drawn attention because of Matthew Keys’ employment in the news media, this was simply a case about a disgruntled employee who used his technical skills to taunt and torment his former employer,” said U.S. Attorney Wagner. “Although he did no lasting damage, Keys did interfere with the business of news organizations, and caused the Tribune Company to spend thousands of dollars protecting its servers. Those who use the Internet to carry out personal vendettas against former employers should know that there are consequences for such conduct.”
“Matthew Keys will spend the next two years in prison,” said Assistant Special Agent in Charge Tom F. Osborne. “This sentence serves as a warning that those who engage in this type of behavior face harsh penalties.”
According to evidence produced at trial, Keys was a site administrator for FOX40’s access to Tribune Company’s content management system (CMS). Tribune Company’s various broadcast and print media properties all used the CMS to publish their news content on the Internet. Keys had an argument with his supervisor on October 28, 2010, after which time FOX40 terminated Keys’ CMS user account, and Keys never returned to work. Secretly, Keys had maintained an unauthorized access point through a set of unauthorized “super user” credentials.
In his own words, Keys later admitted that he was “angry” and “hurt.” Initially, he refused to relinquish control over the station’s Twitter and Facebook accounts. On November 3 and November 22, 2010, Keys used his unauthorized CMS access to download the email list of FOX40 viewers who had given the station their personal information as part of a rewards program. Then, beginning on December 1, 2010, Keys used that list to send anonymous emails denigrating the station and implying that viewer information was not secure. Simultaneously, Keys sent anonymous emails to his former supervisor at FOX40 taunting him that Tribune Company’s CMS was not secure and that corporate information security cannot defend against an insider who decides to “go rogue.” During this time, Keys also used his unauthorized network access to repeatedly deactivate the credentials of the person who took over his duties at FOX40.
According to the evidence at trial, on December 8, 2010, Keys, using the moniker “AESCracked,” appeared in chatrooms used by Anonymous. This was during the time of “Operation Payback,” when Anonymous initiated attacks on various entities that had acted against the interests of WikiLeaks. In the Anonymous chatroom, Keys posted super user credentials to the Tribune Company CMS and exhorted those present to “go f--- s--- up.” He instructed those present on what Tribune Company’s “bread and butter assets” were and what media organizations should be targeted for the “largest impact.” Keys also tutored Anonymous members on how to navigate the CMS and create super user credentials that blended in more easily on the network.
Anonymous did not immediately use the credentials for malicious purposes, and Keys spent the next few days advocating an attack on Tribune media properties. When one member said he was researching the network, Keys responded, “I did not give you those passwords for research. I want you to f--- s--- up.” On December 9, 2010, Keys posted a link to a Los Angeles Times story critical of WikiLeaks and characterized it as “yet another reason why the Times must be demolished.” On December 10, 2010, when a member of Anonymous stated opposition to attacking a media site, Keys replied, “FOX News is not media, it’s ‘infotainment’ for inbreds. I say we target them.”
At the same time that he was instigating an attack against Tribune Company and the Los Angeles Times, Keys sought credit as a journalist for predicting it. On December 12, 2010, in an email and a recorded telephone conversation, Keys declared that he had acquired “documents pertaining to future operations,” including “operations” against The Los Angeles Times.
On December 14, 2010, an Anonymous member who used the moniker “Sharpie” used backdoor credentials to deface a story on the website of the Los Angeles Times. What readers noticed on the front side of the CMS was limited because editors quickly noticed what had happened. They were able to repair the defacement within 40 minutes of the desktop site and a day on the mobile site. The next day, Keys tried to help Sharpie put up altered front-page layouts on several Tribune Company properties, but failed.
Keys’ actions involved disclosure of super user credentials and required the Tribune Company to conduct a damage assessment that lasted to late January or early February of 2011. Five high-level Tribune Company information technology professionals testified at trial that they and their subordinates spent an urgent night searching for and deactivating unauthorized credentials on the CMS. They reset every password on the network. Information security then spent weeks assessing the extent of the compromise and how the breach had occurred. They did not know whether CMS server logs themselves had been altered and whether even the authentication system itself had been compromised. Information security managers had to review whether the attack had changed archived news stories, changed newspaper circulation information, accessed payment systems, or altered the systems that printed actual newspapers. According to trial testimony, this involved “literally hundreds of servers with thousands of pages and archives and things of that nature.”
The case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Matthew D. Segal and Paul A. Hemesath of the Eastern District of California and Deputy Chief James A. Silver of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) prosecuted the case.
Former Cook County Sheriff’s Police Officer Sentenced to 7 1/2 Years in Prison for Robbing Drug Dealers While on DutyRead the Press Release
CHICAGO — A former police officer in the Cook County Sheriff’s Department was sentenced today to 7 1/2 years in federal prison for robbing drug dealers of cocaine, marijuana and contraband cigarettes while on duty.
ROBERT VAUGHAN admitted in a plea agreement that he robbed eight drug dealers from 2011 to 2013, earning a total profit of $300,000. Vaughan conducted the robberies with two other law enforcement officers, and the trio shared in the profits, according to the plea agreement. The robberies were carried out in Chicago, Cicero, Plainfield, Lyons, Melrose Park and Forest Park.
Vaughan, 45, of Frankfort, pleaded guilty last year to one count of robbery. U.S. District Judge Samuel Der-Yeghiayan imposed the 90-month sentence in federal court in Chicago.
“This is the type of crime one would expect to only see on a television show,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “The crimes were brazen, arrogant and detrimental to the citizens of this district. While the victims of the offense in this case garner no sympathy – they are drug dealers and contraband traffickers – it cannot excuse the outrageous conduct by Vaughan, who committed robberies using his badge and gun.”
According to the plea agreement, Vaughan was assigned to the High Intensity Drug Trafficking Area (HIDTA) team, a joint federal, state and local initiative to combat the trafficking of illegal narcotics. Vaughan admitted using his position as a police officer to orchestrate deals with drug traffickers for marijuana, cocaine and contraband cigarettes. Immediately after the transactions, Vaughan would arrest and handcuff the individuals – but then keep the narcotics for himself and release the dealers without charges. Vaughan later sold the narcotics to other dealers in exchange for cash.
Vaughan also robbed individuals and homes of marijuana based on information he had learned from confidential informants. He was arrested on Nov. 3, 2014, after he and another law enforcement officer robbed 70 pounds of marijuana from an individual whom they believed was a drug courier. Unbeknownst to the officers, the individual was an undercover federal agent, according to the plea agreement.
The sentencing 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.
The government is represented by Mr. Harjani.
Florida Pain Medicine Associates and its Owners Agree to Pay over One Million Dollars to Resolve False Claims Act AllegationsRead the Press Release
Florida Pain Medicine Associates, Inc. and its owners, Drs. Bart Gatz, Alexis Renta, and Albert Rodriguez have agreed to pay $1.1 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary nerve conduction studies (NCS).
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Miami Region, made the announcement.
“When health care providers bill for medically unnecessary procedures, they compromise patient care and the integrity of the Medicare program, for their own financial interests” said U.S. Attorney Wifredo Ferrer. “The United States Attorney’s Office is dedicated to investigating and resolving claims of Medicare fraud that can jeopardize the health care system.”
“When health care businesses and their owners improperly boost their profits by billing Medicare for medically unnecessary procedures, its taxpayers and patients who are left with a hefty tab,” said HHS OIG Special Agent in Charge Shimon R. Richmond. “We are committed to uprooting such schemes and eliminating waste in Federal health care programs.”
The United States alleged that patient records indicated that a substantial percentage of the NCSs that were performed at Florida Pain Medicine Associates were medically unnecessary. The NCSs were often administered without an accompanying electromyography (EMG) test, thereby substantially decreasing the diagnostic value of the procedure. This was especially true where the NCS was the sole basis for performing an epidural steroid injection.
The settlement announced today resolves allegations originally brought by Rosa Gomez, who had worked in Florida Pain Medicine Associates billing department, under the qui tam, or whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government of the United States for the submission of false claims and to receive a share of any recovery. The False Claims Act authorizes the United States to intervene in such lawsuits and take over primary responsibility for litigation. Gomez’s will receive $242,000.
Mr. Ferrer commended the investigative work of HHS-OIG. The investigation and settlement were handled by Assistant U.S. Attorney Franklin Monsour.
The case is captioned United States ex rel. Gomez v. Florida Pain Medicine Associates, Inc., et al., Case No. 13-80856 CIV (S.D. Fla.). The claims settled by the lawsuit are allegations only and there has been no determination of liability.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Federal Tax Enforcement Is a Focus of Prosecutions in the First Quarter of 2016Read the Press Release
SACRAMENTO, Calif. — With the annual tax filing deadline approaching, U.S. Attorney Benjamin B. Wagner noted that his office had taken a number of criminal enforcement actions in recent months in tax evasion cases in the Eastern District of California. The U.S. Attorney’s Office works with the Internal Revenue Service – Criminal Investigation and other law enforcement partners to enforce federal tax laws.
“This is an appropriate time of year to remind those few individuals who set out to cheat or evade their tax obligations that such conduct can result in prosecution,” said U.S. Attorney Wagner. “Every year some deliberately fail to file required returns or file false and fraudulent returns in order to evade the assessment and payment of tax due. It is the obligation of this office to pursue and prosecute them for their criminal conduct.”
“All Americans have a responsibility to pay taxes. In today’s economic environment, it’s more important than ever that people feel confident that everyone is playing by the rules and paying the taxes they owe,” said Michael T. Batdorf, IRS-CI Special Agent in Charge of the Oakland Field Office. “Those who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t. IRS-CI and the Department of Justice will investigate and prosecute those who violate our tax system.”
Cases involving IRS employees are investigated jointly by the Inspector General for Tax Administration (TIGTA) and IRS-CI. Rod Ammari, Special Agent-in-Charge of TIGTA’s San Francisco Field Division stated: “It is very important that the American taxpayers have confidence in the IRS and its functions. When IRS employees use their insider knowledge to file fraudulent tax returns, we are committed to prosecuting these individuals to the fullest extent of the law. IRS employees committing tax fraud cannot be tolerated.”
Indictments in the Eastern District of California so far in 2016:[1]
U.S. v. Davis — Indicted on March 31, 2016. Sherrell Davis, 42, of Benicia, allegedly submitted fraudulent claims for tax refunds in the names of other people and assisted in preparing fraudulent tax returns seeking thousands of dollars in refunds. (2:16-cr-072)
U.S. v. Black — Indicted on March 24, 2016. Kenley Black, 41, formerly of Burney, allegedly failed to file tax returns for tax years 2009 to 2013 and evaded paying more than $225,000 in taxes for those years. (2:16-cr-062)
U.S. v. Boone et al. — Indicted on February 10, 2016. Marty Boone, 54, and his wife Ronda Boone, 53, both of Vallejo, allegedly filed separate false tax returns claiming million-dollar refunds. Marty Boone was paid approximately $1.9 million, which they laundered by moving it through various accounts, including one in Cyprus. (2:16-cr-020)
U.S. v. Rocha, et al. — Indicted on January 14, 2016. Lorita Marie Rocha, 35, of Fresno, and Nereida Rodriguez, 28, of Firebaugh, allegedly filed fraudulent tax returns using stolen identities of over two dozen individuals that Rocha obtained through her employment with the IRS as a seasonal tax examiner. They claimed over $100,000 in refunds. (1:16‑cr‑001)
U.S. v. Chambers et al. — Indicted on January 14, 2016. Denna Chambers, 33, of Woodland, and Starsheka Mixon, 32, of Pinole, allegedly filed approximately 178 fraudulent income tax returns requesting more than $900,000 in refunds. (2:16-cr-010)
Convictions in 2016:
U.S. v. Cooper et al. — On April 12, 2016, Tiana Naples, 29, of Vallejo pleaded guilty to conspiring to submit false claims. On February 9, 2016, her co-defendant Leticia Roque, 49, of Vallejo, was sentenced to 30 months in prison, for conspiring to submit false claims and aggravated identity theft. Together, Naples and Roque submitted 60 false tax returns requesting more than $200,000 in refunds in the names of other people. (2:14-cr-022)
U.S. v. Kuzmenko et al. — On April 8, 2016, Aleksandr Kuzmenko, 32, of Loomis, pleaded guilty to conspiring to defraud the U.S. in connection with his participation in a tax refund fraud scheme. Kuzmenko conspired with others to file approximately 90 fraudulent tax returns with the IRS for the 2008 tax year using various identities, including some that were stolen. The fraudulent claims totaled approximately $695,000, which resulted in a loss of more than $570,000 to the IRS. (2:14-cr-044)
U.S. v. Shchirskiy et al. — On April 7, 2016, Vladislav Atamanyuk, 28, of Sacramento County, pleaded guilty to conspiring to submit fraudulent claims for tax refunds using the identities of various individuals, some of which were stolen. Atamanyuk and his co‑conspirators claimed more than $650,000 in fraudulent refunds, although the IRS issued about $88,000 in connection with the scheme. (2:14-cr-198)
U.S. v. Miller — On February 5, 2016, Linda J. Miller, 63, of Woodland, pleaded guilty to filing a false tax return. Miller provided bookkeeping services, and she admitted that on her 2008 tax return, she did not report $138,000 in checks she received. (2:15‑cr‑066)
U.S. v. Knockum — On January 29, 2016, Kenneth Knockum, 48, of Vallejo, was found guilty at trial of filing false returns seeking large refunds — two returns requested refunds of over $1.4 million each — he generated false 1099-OIDs and other tax forms to support the claimed income and taxes. The IRS caught the majority of the false returns but over $125,000 in fraudulent refunds were issued. (2:14‑cr-115)
Sentences in 2016:
U.S. v. Castro — On April 6, 2016, Yolanda Castro, 48, a 20-year employee of the IRS in Fresno, was sentenced to one year in prison and ordered to pay $37,387 in restitution for aiding in the preparation of a false tax return. Between 2007 and 2013, she prepared and filed false federal income tax returns for herself, her family members and others in which she fraudulently claimed tax deductions and credits. (1:15-cr-050)
U.S. v. Williams — On March 31, 2016, Jasmine Ann Williams, 26, of Sacramento, was sentenced to three years of probation for using her position as a volunteer tax preparer to steal two tax refunds totaling $10,745 from two individuals. Williams was also ordered to pay restitution to the two victims. (2:15-cr-206)
U.S. v. Eidson — On March 21, 2106, Brandon Adam Eidson, 34, of Turlock, was sentenced to three years and one month in prison and ordered to pay $433,205 in restitution for structuring cash transactions and filing false tax returns. Between 2008 and 2010, he underreported approximately $1.2 million in gross receipts for his business Hooked Up Hydroponics. Eidson deposited more than $1.5 million in increments of $10,000 or less in an attempt to prevent his bank from filing Currency Transaction Reports. (1:15‑cr-085)
U.S. v. Bonderer et al. — On March 10, 2016, Clint D. Bonderer, 37, of Stockton, was sentenced to three years in prison for conspiring to submit false claims. Co-defendant Slavic Khudoy, 36, of Loomis, pleaded guilty today, April 13, 2016. Bonderer and Khudoy submitted 842 fraudulent tax returns, requesting more than $600,000 in refunds in the names of other people and in most cases, kept the refunds for themselves. (2:15‑cr‑028)
U.S. v. Bolanos — In 2008, seven defendants submitted false tax returns claiming they were owed more than $33 million in refunds. In response, the IRS issued approximately $400,000 in unearned refunds. On March 7, 2016, Gaylene Lynnette Bolanos, 58, of Fresno, was sentenced to 10 years in prison and ordered to pay $429,300 in restitution; Leroy Donovan Combs, 74, of Fresno, was sentenced to three years and nine months in prison; Charles Wayne Uptergrove, 57, of Madera County, was sentenced to three years and three months in prison; and Ladonna Lee Moon, 55, of Texas, was sentenced to one year and nine months in prison. On February 29, 2016, Louis Calles, 67, of Fresno, was sentenced to 16 months in prison; and James Schwartz, 61, of Fresno, was sentenced to one year and a day in prison. On January 11, 2106, Oswald Georgner, was sentenced to 18 months in prison. (1:13-cr-362)
U.S. v. Ruiz — On February 3, 2016, Manuel Ruiz, 47, of Sacramento, was sentenced to 18 months in prison for making false claims for tax refunds on federal income tax returns for clients of his home-based tax preparation business. In total, between tax years 2009 and 2011, Ruiz made false claims on more than 180 returns that resulted in over $650,000 paid out by the IRS. After payments to clients, Ruiz retained at least $192,000 from the false claims. (2:14-cr-009)
U.S. v. Richards — On January 21, 2106, James Stewart Richards, 69, of West Sacramento, was sentenced to two years in prison for tax evasion. Richards is an attorney and a member of the bar in California and Hawaii. Between 1994 and 2003, Richards evaded paying over $170,000 in federal income taxes. He filed a false “Offer in Compromise” to the IRS that omitted bank accounts and six rental properties. He used a client trust account to hold his own assets. He also made false statements about his assets to a bankruptcy court and to the IRS. (2:10-cr-089)
More criminal tax investigations are underway.
[1] The charges in an indictment are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Federal Jury Delivers Guilty Verdicts Against Four MS-13 Gang MembersRead the Press Release
CHARLOTTE, N.C. – A federal jury delivered guilty verdicts today against four members of the street gang “La Mara Salvatrucha,” or “MS-13,” who were on trial for participating in a racketeering conspiracy, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. The convictions stem from the multiple acts of violence committed by the defendants for the benefit of the criminal enterprise, including murder and attempted murder. U.S. District Judge Robert J. Conrad Jr. presided over the trial.
Miguel Zelaya, 20, of Charlotte, Luis Ordonez-Vega, 36, of Concord, N.C., Jorge Sosa, 24, of Charlotte, and William Gavidia, 23, of Kannapolis, N.C. were each convicted of one count of conspiracy to participate in racketeering activity (RICO).
Zelaya was also convicted of murder in aid of racketeering and use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the death of Jose Orlando Ibarra.
Ordonez-Vega was also convicted of murder in aid of racketeering and use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the death of Noel Navarro Hernandez.
Sosa was convicted of attempted murder in aid of racketeering and use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence, that being attempted murder in aid of racketeering.
According to filed court documents, witness testimony, trial evidence and statements made in court:
From at least in or about 2009 to about May 2015, the four defendants along with 33 others named in a federal indictment, were members of the MS-13 gang, a criminal organization with over 6,000 members in the United States and 30,000 members internationally. MS-13 originated in Los Angeles, California, and has spread to states across the country, including in North Carolina. The gang’s members are mostly immigrants or descendants of immigrants from El Salvador and other Central and Latin American countries. In North Carolina, some of the active MS-13 members are divided into different groups, or “cliques,” which include the “Trece Locos Salvatrucha,” the “Hollywood Locos Salvatrucha,” the “Charlotte Locotes Salvatrucha,” the “Centrales Locos Salvatrucha,” and the “Coronados Little Cycos Salvatrucha,” among others. The different cliques work together to carry out criminal acts, to protect the interests of the criminal enterprise, and to assist each other in avoiding law enforcement detection.
MS-13 members adhere to a set of gang rules and pay dues which fund the gang’s criminal activities and support other gang members or their families in the U.S and abroad. Gang members are also expected to protect the name, reputation, and status of the gang and its members, and to punish through acts of violence and intimidation those who disrespect the gang. Some MS-13 members signify their affiliation with the gang by wearing blue, black and white color clothing and certain “Mara Salvatrucha,” or “MS-13” tattoos.
Members of MS-13 in Charlotte participated in multiple meetings at various times to discuss gang-related matters and to plan the commission of future crimes for the benefit of the gang. They were also responsible for numerous criminal acts including murder and attempted murder.
Zelaya, a/k/a “Most Wanted” and “Ne Ne”, is a member of the “Coronados Little Cycos Salvatrucha” clique. On December 18, 2013, Zelaya shot and killed Jose Orlando Ibarra, an associate of a rival gang, “The Latin Kings.” According to trial evidence and testimony, Zelaya admitted to law enforcement that he shot Jose Ibarra because Ibarra owed him money for a gun and because Ibarra and his brother, a Latin King member, had been looking for one of Zelaya’s “homies” with a shotgun.
Ordonez-Vega, a/k/a “Big Boy,” is a self-admitted member of MS-13 from Nassau County, New York, and a member of the “Brentwood Locos Salvatrucha” clique. Ordonez-Vega has “MS” tattooed across his stomach and “La Mara Salvatrucha” tattooed across his chest. On June 6, 2013, Ordonez-Vega shot and killed Noel Navarro Hernandez in a strip mall parking lot in Charlotte. Evidence presented at trial showed that Ordonez-Vega and other MS-13 members targeted Navarro because they believed that Navarro was a rival gang member because of the way he talked, wore red, and his haircut.
Sosa, a/k/a “Koki” and “Loco” is a member of the “Charlotte Locotes Salvatrucha” clique. According to trial evidence, Sosa has been involved in multiple gang-related incidents on numerous occasions. For example, on February 1, 2008, Sosa flashed MS-13 gang hand signs at a rival gang member’s mother and pointed a handgun at her while they were stopped in traffic. On October 15, 2011, Sosa warned a man who asked him to leave a party that he would return with other MS-13 gang members to shoot the victim. Also, on July 5, 2013, Sosa and other MS-13 members tried to break into a vehicle then attempted to run over with a car the officers who tried to arrest them. And on June 30, 2013, Sosa was involved in a gang-related shooting, when he and another person followed their victims in a neighborhood in Charlotte and opened fire with a high caliber rifle.
Gavidia, a/k/a “Duro,” is also a member of the “Coronados Little Cycos Salvatrucha” clique. According to evidence presented at trial and witness testimony, Gavidia has carried out criminal acts in support of the gang and has often fought rival gang members in clubs. For example, Gavidia admitted that he taxed drug dealers in MS-13 dominated clubs. Gavidia was also involved in a shooting on August 11, 2013, when another MS-13 gang member and indicted co-conspirator, Albert Vela-Garcia, shot a victim in the back following a bar fight started by Gavidia. Gavidia has also attacked a victim for falsely claiming to be a member of MS-13.
“A federal jury has rightfully convicted four gang members responsible for committing multiple acts of violence, including murder,” said U.S. Attorney Rose in making this announcement. “Today’s guilty verdicts underscore that even though gang membership may in some ways ‘protect’ gangsters from outsiders, it certainly won’t protect them from the vast reach of the U.S. Attorney’s Office and our law enforcement partners. Together, we will continue to identify and prosecute gang offenders who carry out violent acts for the benefit of their criminal enterprise,” said U.S. Attorney Rose.
The four defendants convicted today will remain in federal custody until their sentencing, which has not been set.
Thirty of the 37 MS-13 gang members previously charged with RICO conspiracy by federal criminal indictment in connection with this case have entered guilty pleas and are currently awaiting sentencing. They are: Carlos Almonte, Jose Danny Argueta, Juan Bergamasco-Suarez, Milton Chavarria, Raul Contreras, Luis Erazo, Marvin Fuentes-Canales, Luis Funes-Rivera, Jorge Garcia, Cesar Garcia-Perez, Saul Gavidia, Raul Guardado, Angel Hernandez, Jose Manuel Linares, Rene Lopez-Ventura, Jose Moran-Celis, Daniel Navarro, Jonathan Noble, Christian Pena, Jorge Perez, Victor Pineda, Rosendo Rivas, Fec Rodriguez-Vareal, Oscar Trejo, Jaime Turcios, Jose Vasquez, Marlon Vasquez-Maldonado, Albert Vela-Garcia, and Alexis Villalta-Morales. Four others remain fugitives. They are: Neris Gutierrez, Salvador Ruiz, Luis Villalta, and Miriam Barilles-Escamilla.
Following today’s guilty verdicts, U.S. Attorney Rose commended the Charlotte Division of the FBI, ICE’s Homeland Security Investigations, the Charlotte-Mecklenburg Police Department and thanked them for working together to investigate this case.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Assistant U.S. Attorneys Elizabeth Greene and William Miller are in charge of the prosecution.
Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictments against the following:
Seven Individuals Indicted for Conspiring to Alter Checks
Cornelius N. Mattress, age 42, of Pendleton, South Carolina; Karissa L. Miller, age 24, of Anderson, South Carolina; Sherry D. Lyons, age 43, of Abbeville, South Carolina; Erica R. Floyd, age 24, of Abbeville, South Carolina; Rosalynn D. Crawford, age 35, of Abbeville, South Carolina; Ruby A. Adams, age 53, of Anderson, South Carolina; and Stacy S. Paul, age 40, of Anderson, South Carolina were charged in a 1-count indictment with conspiracy, a violation of Title 18, United States Code, Section 371. The maximum penalty each defendant could receive is 5 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the United States Postal Inspection Service and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution.Greenville Resident Indicted on Child Pornography
Richard Wallace Heald, III, age 25, of Greenville, South Carolina, was charged in a 2-count indictment. Richard Wallace Heald, III, was charged with Possession of Child Pornography, a violation of Title 18, United States Code, Section 2252A(a)(5)(B) and Receiving or Distribution of Child Pornography, a violation of Title 18, United States Code, Section 2252(a)(2). The maximum penalty Heald could receive is 20 years imprisonment and a maximum fine of $250,000. The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) agents and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution. This case is being brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, 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 identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.Greenwood Man Indicted for Delay of Mail by a Postal Employee
Stephen J. Ritchie, Jr., age 32, of Greenwood, South Carolina, was charged in a single-count Indictment with delay of mail by a postal employee, a violation of Title 18, United States Code, Section 1703. The maximum penalty Ritchie could receive is five years imprisonment and a fine of $250,000.00. The case was investigated by agents of the United States Postal Service, Office of Inspector General, and is assigned to Assistant United States Attorney David C. Stephens of the Greenville office for prosecution.The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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Farmington Woman Pleads Guilty to Distributing Child PornographyRead the Press Release
ALBUQUERQUE – Tristalyn Valencia, 29, of Farmington, N.M., entered a guilty plea today in federal court in Albuquerque, N.M., to a distribution of child pornography charge. Under the terms of the plea agreement, Valencia will be sentenced to a prison term within the range of ten to 15 years followed by a term of supervised release to be determined by the court. Valencia will be required to register as a sex offender upon her release from prison.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, 11th Judicial District Attorney Robert P. “Rick” Tedrow, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, Tex., and San Juan County Sheriff Ken Christesen.
Valencia was arrested on Dec. 24, 2015, on an indictment charging her with nine counts of producing visual depictions of a minor engaged in sexually explicit conduct. According to the indictment, Valencia committed the crimes between May 2012 and Aug. 2012 in San Juan County, N.M.
During today’s proceedings, Valencia pled guilty to a felony information charging her with distribution of child pornography. In entering the guilty plea, Valencia admitted that from June 1, 2012 through June 30, 2012, she distributed nine images containing child pornography. Valencia admitted that each image depicted the same victim, who was under the age of 12 years, engaged in sexually explicit conduct. Some of the images depicted the victim engaged in sexually explicit conduct with an adult male.
This case was investigated by the Albuquerque and Phoenix offices of HSI and the San Juan County Sheriff’s Office with assistance from the 11th Judicial District Attorney’s Office in Farmington.
Assistant U.S. Attorney Sarah Mease is prosecuting the case 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/.
Essex County, New Jersey, Woman Sentenced to 21 Months in Prison for Role in Stolen Identity Refund Fraud SchemeRead the Press Release
TRENTON, N.J. – An Essex County, New Jersey, woman was sentenced today to 21 months in prison for conspiring to obtain more than $1 million through fraudulently generated refund checks issued by the U.S. Treasury, U.S. Attorney Paul J. Fishman announced.
Marie Poitevien, 54, of Orange, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging her with conspiring to steal government funds. Judge Thompson imposed the sentence today in Trenton federal court.
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks:
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SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals.
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SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
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They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
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With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.
According to documents filed in this case and statements made in court:
From October 2009 through June 2013, Poitevien participated in a scheme in which her conspirators made fraudulent tax refund applications and had the U.S. Treasury send the refund checks to Poitevien’s residence. Poitevien then negotiated the checks by depositing them into her personal bank account and withdrawing the funds. Poitevien admitted cashing 298 tax refund checks, made payable to 139 different victims and totaling $1,101,689.
In addition to the prison term, Judge Thompson sentenced Poitevien to two years of supervised release.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Linda Foster Esq. Assistant Federal Public Defender, Trenton
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Durant Woman Sentenced to 18 Months for Embezzlement from Indian Tribal OrganizationRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that CARMA LYNN ELLIOTT, age 45, of Durant, Oklahoma, was sentenced to 18 months imprisonment, followed by 36 months of supervised release for EMBEZZLEMENT FROM INDIAN TRIBAL ORGANIZATIONS, in violation of Title 18, United States Code, Section 1163.
The charges arose from an investigation by the Choctaw Nation Tribal Police and the Federal Bureau of Investigation.
The Information filed in October, 2015, alleged that from on or about March 26, 2005 and continuing through April 2, 2011, in the Eastern District of Oklahoma, the defendant with intent to convert them to her use, did knowingly retain $585,397.15 of moneys, funds and credits belonging to the Choctaw Nation of Oklahoma, a tribal organization.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing.
Assistant United States Attorney Dean Burris represented the United States.
Dover Insurance Broker Charged with Tax FraudRead the Press Release
BOSTON – A Dover, Mass. insurance broker was arrested today in connection with filing fraudulent personal tax returns.
Anthony J. May, 61, was indicted on two counts of filing false tax returns for tax years 2008 and 2009.
According to the indictment, May owned and operated Clients First Financial LLC, a business selling life insurance products, and Advantage Life Settlements, LLC, which served as a broker for individuals to sell their own life insurance policies to third party investors. May allegedly operated his businesses out of an office suite in Hingham where he also rented space to other independent insurance agents. As alleged in the indictment, May failed to report substantial amounts of the gross receipts he received from insurance commissions, life settlement broker fees and business rental income in his 2008 and 2009 tax returns.
The charging statute provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district judge based on the U.S. Sentencing Guidelines and other sentencing factors.
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 is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Dominican Man Pleads Guilty to Illegally Reentering the United States After A Previous Deportation, and Other ChargesRead the Press Release
CONCORD, NEW HAMPSHIRE –United States Attorney Emily Gray Rice announced that Gerpis Pena, of the Dominican Republic, pleaded guilty to a three-count indictment charging him with illegally re-entering the United States after having been previously deported, misrepresenting a social security number, and falsely claiming to be a U.S. citizen.
On November 5, 2015, Gerpis Pena appeared at the Manchester office of the Department of Motor Vehicles and attempted to obtain a New Hampshire driver’s license. Gerpis had in his possession a birth certificate purportedly issued in Puerto Rico, a social security card, and a previously-issued New Hampshire driver’s license. He had completed the forms necessary for issuance of a license in the name of the individual named in the identifying documents, including the social security number listed on the card he possessed, when he was approached by the New Hampshire State Police.
A New Hampshire State Trooper questioned Pena as to his identity. Pena initially claimed to be a United States Citizen, born in Puerto Rico, and had filled out and signed a renewal application on which he had checked “yes” to the question “Are you a United States citizen?” The Trooper contacted Immigration and Customs Enforcement – Enforcement and Removal Operations (ICE-ERO) for assistance in identifying the defendant.
ICE-ERO Deportation Officers arrived at the DMV and, using a mobile fingerprinting kit, submitted the defendant’s fingerprints for comparison to databases of known fingerprints. The fingerprint impressions were a match to those previously taken from the defendant.
Pena will be sentenced at 10:00 AM on August 1, 2016, and will be deported after serving his sentence.
The case was investigated by the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement and the New Hampshire State Police. Assistant U.S. Attorney Alfred Rubega is prosecuting this case.
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Dallas Doctor and Three Dallas-Area Home Health Agency Owners Convicted for Running Large-Scale, Sophisticated Health Care Fraud SchemeRead the Press Release
DALLAS – Following a six-week-long trial before U.S. District Judge Sam A. Lindsay and less than two days of deliberation, this afternoon a federal jury convicted a Dallas physician and three owners of home health agencies on various felony offenses, including conspiracy to commit health care fraud, stemming from their participation in a nearly $375 million health care fraud scheme involving fraudulent claims for home health services, announced U.S. Attorney John Parker of the Northern District of Texas.
Jacques Roy, M.D., 58, of Rockwall, Texas; Cynthia Stiger, 53, of Dallas; Wilbert James Veasey, Jr., 64, of Dallas; and Charity Eleda, R.N., 55, of Rowlett, Texas, were each convicted on one count of conspiracy to commit health care fraud. In addition, Roy was convicted on eight, Veasey on three and Eleda on four counts of health care fraud. Roy was also convicted on two counts of making a false statement relating to healthcare matters and one count of obstruction of justice. Eleda was also convicted on three counts of making false statements for use in determining rights of benefit and payment by Medicare.
“This office will continue to use the most sophisticated techniques available to aggressively prosecute those who, through their fraud, drive up the costs of health care to consumers and tax payers alike,” said U.S. Attorney Parker. “I applaud the tremendous cooperation among the investigative agencies that brought us to this point.”
Each conspiracy and health care fraud count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. The obstruction of justice count and each false statement count carry a maximum statutory penalty of five years in federal prison and a $250,000 fine. Sentencings are set for this fall.
Dr. Roy, who has been in federal custody since his arrest on February 28, 2012, on an indictment that was announced at a press conference in Dallas shortly after it was unsealed that same day, owned/operated Medistat Group Associates, P.A., an association of health care providers who provided home health certifications and performed patient home visits. Stiger and Veasey, who owned/operated Apple of Your Eye Healthcare Services, Inc., and Eleda, who owned/operated Charry Home Care Services, Inc., were also arrested on charges in that indictment, but were released on bond.
Three other defendants charged in the case, Cyprian Akamnonu and his registered nurse wife, Patricia Akamnonu, both of Cedar Hill, Texas, and Teri Sivils, of Midlothian, Texas, each pleaded guilty before trial to one count of conspiracy to commit health care fraud. Cyprian and Patricia Akamnonu, who owned Ultimate Care Home Health Services, Inc., are each currently serving a ten-year federal prison sentence. They were also ordered to pay $25 million in restitution. Sivils, who was the office manager at Medistat, pleaded guilty in April 2015, and is scheduled to be sentenced in June 2016.
The government presented evidence at trial that Dr. Roy, Stiger, Veasey and Eleda engaged in a large-scale, sophisticated health care fraud scheme in which they conspired together and with others to defraud Medicare and Medicaid through companies they owned/controlled: Medistat Group Associates, P.A., Apple of Your Eye Health Care Services, Inc., Ultimate Care Home Health Services and Charry Home Care Services.
As part of the conspiracy, Stiger, Veasey and Eleda, along with others, improperly recruited individuals with Medicare coverage to sign up for Medicare home health care services. Eleda recruited patients from The Bridge homeless shelter in Dallas, sometimes paying recruiters $50 per beneficiary they found and directed to her vehicle parked outside the shelter’s gates. Eleda and other nurses would falsify medical documents to make it appear as though those beneficiaries qualified for home health care services that were not medically necessary. Eleda and the nurses prepared Plans of Care (POC), also known as 485’s, which were not medically necessary, and these POCs were delivered to Dr. Roy or another physician working under his direction at Medistat.
Dr. Roy instructed his staff to certify these POCs, which indicated to Medicare and Medicaid that a doctor, typically Dr. Roy, had reviewed the treatment plan and deemed it medically necessary. That certifying doctor, typically Dr. Roy, certified that the patient required home health services, which were only permitted to be provided to those individuals who were homebound and required, among other things, skilled nursing. This process was repeated for thousands of POCs, and, in fact, Medistat’s office included a “485 Department,” essentially a “boiler room” to affix fraudulent signatures and certifications.
Once an individual was certified for home health care services, Eleda, nurses who worked for Stiger and Veasey, and other nurses falsified visit notes to make it appear as though skilled nursing services were being provided and continued to be necessary. Dr. Roy would also visit the patients, perform unnecessary home visits, and then order unnecessary medical services for the recruited beneficiaries. Then, at Dr. Roy’s instruction, Medistat employees would submit fraudulent claims to Medicare for the certification and recertification of unnecessary home health care services and other unnecessary medical services.
The government presented further evidence at trial that the scope of Dr. Roy’s fraud was massive; Medistat processed and approved POCs for 11,000 unique Medicare beneficiaries from more than 500 different home health agencies. Dr. Roy entered into formal and informal fraudulent arrangements with Apple, Charry, Ultimate and other home health agencies to ensure his fraudulent business model worked and that he maintained a steady stream of Medicare beneficiaries.
Regarding Dr. Roy’s conviction for obstruction of justice, the government presented evidence that when the Centers for Medicare and Medicaid Services (CMS) suspended Dr. Roy and Medistat from receiving Medicare payments after June 2, 2011, because of suspected fraud, Dr. Roy sought an “end-run” around the suspension through the use of another company, Medcare House Calls. Dr. Roy directed the medical providers he employed to be re-credentialed and to bill Medicare under Medcare House Calls, instead of Medistat. Nonetheless, the money that Medicare paid was circumvented back to Medistat and Dr. Roy.
The case was investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) and was brought as part of the Medicare Fraud Strike Force supervised by the Criminal Division Fraud Section and the U.S. Attorney’s Office for the Northern District of Texas.
Assistant U.S. Attorney P.J. Meitl, Special Assistant U.S. Attorney Nicole Dana and Criminal Chief Assistant U.S. Attorney Chad Meacham prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for more than $7 billion. In addition, HHS CMS, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), please visit: www.stopmedicarefraud.gov.
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Colombian National Sentenced for Immigration OffenseRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MARCELINO OLAVE-GRANJA, age 46, a citizen of Colombia, was sentenced today after previously pleading guilty to a one-count indictment for illegal reentry of a removed alien.
U.S. District Court Judge Susie Morgan sentenced OLAVE-GRANJA to 10 months imprisonment, followed by one year of supervised release, and a $100 special assessment fee. OLAVE-GRANJA will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, on June 11, 2015, OLAVE-GRANJA was found in the United States after having been previously deported from the United States on June 9, 1998.
U.S. Attorney Polite praised the work of United States Customs and Border Protection agents in investigating this matter. Assistant United States Attorney Jon Maestri was in charge of the prosecution.
Cleveland Heights woman charged with welfare fraudRead the Press Release
Loretta Irby, 63, of Cleveland Heights, Ohio, has been charged with theft of government property, said Carole S. Rendon, Acting United States Attorney for the Northern District of Ohio.
Irby stole approximately $33,963 in Supplemental Security Income benefits to which she was not entitled. Irby defrauded the Social Security Administration by concealing her true marital status and living arrangements with her husband. The concealment deprived SSA of the ability to properly administer the SSI program, and caused SSA to pay her benefits when she was not eligible for those benefits. Irby concealed these material facts knowing that it would affect her right to SSI benefits.The scheme lasted approximately 10 years, beginning in or around July 2005, through in or around April 2015, according to court documents.
Special Assistant United States Attorney Lisa J. Sanniti is prosecuting the case following an investigation by the Social Security Administration Office of the Inspector General.
If convicted, the court will determine the defendant’s sentence after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum. In most cases, it will be less than the maximum.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Charlton Man Pleads Guilty to Child ExploitationRead the Press Release
BOSTON – A Charlton man pleaded guilty today in U.S. District Court in Worcester in connection with soliciting hundreds of teenage girls on several social media platforms.
Matthew Clem, 31, pleaded guilty to an Information charging him with three counts of producing child pornography. U.S. District Court Judge Hillman scheduled sentencing for July 13, 2016. Clem also faces state child rape charges in the Worcester Superior Court.
Clem posed as a 15-16 year old boy on several social media platforms in order to meet teenage girls. After chatting with them, Clem proposed that they meet his 19 or 20 year old “cousin,” who Clem claimed was returning from active military duty. The “cousin,” however, was Clem himself who had never served in the military. Evidence on Clem’s cell phone revealed that he had solicited over 1,000 potential victims.
Clem admitted during the plea hearing that in October 2014 he requested and obtained nude photos of a teenage female victim through Kik Messenger, a web-based messaging service. Via text message, Clem specified poses and sexual acts for the victim to photograph and send to him.
From September 2011 to May 2012, Clem video-chatted with another female teenage victim over Skype, a web-based video messaging service. During the video chats, Clem had the victim remove her clothes and conduct sexual acts. Clem also met with the victim and engaged in sexual intercourse with her.
Clem also admitted to communicating with a third teenage victim through Kik Messenger in the spring and fall of 2014. Clem exchanged sexually graphic text messages and images with the teenager and met her on multiple occasions to engage in sexual intercourse.
The charging statute provides a mandatory minimum sentence of 15 years and no greater than 30 years in prison, a minimum of five years and up to a lifetime of supervised release and a fine of $250,000 on each count. Pursuant to a plea agreement, Clem will be sentenced to a minimum of 15 years and no greater than 21 years in prison if the Court accepts the agreement. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Worcester District Attorney Joseph D. Early, Jr.; Gregory K. Null, Special Agent in Charge of the U.S. Department of Homeland Security, Office of Inspector General, Office of Investigations; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Worcester Police Chief Gary Gemme, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark Grady of Ortiz’s Worcester Branch Office.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’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, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Baltimore Felon Sentenced to 17 Years in Prison for Federal Gun Charge and RobberyRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Alfred Patterson, age 50, of Baltimore, Maryland, today to 17 years in prison, followed by five years of supervised release, for robbing a drug dealer and using a gun during the robbery. A federal jury convicted Patterson on February 5, 2016.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore Police Commissioner Kevin Davis; and Baltimore City State’s Attorney Marilyn Mosby.
According to the evidence presented at his five day trial, on January 28, 2015, Baltimore City Police officers were conducting surveillance in the 3600 and 3700 blocks of Beehler Avenue, a known high-crime area. The officers saw a vehicle pull up and an individual got into the rear of the car, leaving the door open. With an unobstructed view into the car, the officers saw a brief struggle between the individual, the driver of the car, and Patterson, who was in the passenger seat. The officers saw Patterson pull out a handgun and point it at the individual, who jumped out of the car and ran away. The car then drove off at high speed.
Alerted by the surveillance team, two officers pulled the car over several blocks away and removed the driver and Patterson from the car. A loaded .38 caliber revolver and two ziplock bags of heroin were on the passenger seat where Patterson had been sitting. The officers recovered the gun and the heroin, and arrested Patterson and the driver.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation and thanked the Drug Enforcement Administration for its assistance. Mr. Rosenstein thanked Assistant United States Attorney Aaron S. J. Zelinsky and Special Assistant U.S. Attorney Lauren E. Perry, who prosecuted the case.
Autry State Prison Inmate Pleads Guilty to Laundering $1 Million from PrisonRead the Press Release
Reginald Perkins, who admitted he laundered approximately $1 million of illegal proceeds from inside Autry State Prison, has pleaded guilty to a charge of conspiring to launder money as part of a wide-ranging federal investigation of criminal activity and corruption inside Georgia State prisons.
“This case re-emphasizes the widespread and corrosive effects that cell phones have in prisons,” said U. S. Attorney John Horn. “A prison is the last place where criminal activity like this should be occurring, and the fact that the amount of money laundered through this inmate’s conduct totals $1 million is mind-boggling.”
“The level of victimization that this Georgia Department of Corrections inmate could cause is astonishing and disheartening. Prison can be a mix of punishment or rehabilitation for the many inmates living within its walls. For Mr. Perkins, his prison experience clearly lacks any signs of rehabilitation and, because of his continued and unrepentant criminal conduct, it will now be longer,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges and other information presented in court: Perkins laundered fraud proceeds while incarcerated in Jimmy Autry State Prison (“Autry”). Autry is a Georgia Department of Correction (“GA DOC”) medium security prison located in Pelham, Georgia, that houses approximately 1,700 adult male inmates.
While Perkins was an inmate at Autry, GA DOC inmates regularly obtained cellular telephones. For example, from 2014 to 2015, GA DOC officials seized more than 23,500 cellular telephones from inside Georgia state prisons. Many of the seized cellular telephones possessed Internet capabilities and the latest smartphone features. The possession of cellular telephones by GA DOC inmates creates a significant risk to prison security and to public safety, as GA DOC inmates used contraband cellular telephones to commit various criminal acts while incarcerated.
Inmates used contraband cellular telephones from inside Autry to access Internet websites to identify the names, addresses, and telephone numbers of potential fraud victims. Using the cellular telephones, inmates called the victims whose names and numbers had been obtained. During these calls, the inmates made certain false representations to the victims, including: (a) that the inmates were law enforcement officials; (b) that the potential victims had unlawfully failed to appear for jury duty; (c) that because the potential victims had failed to appear for jury duty, warrants had been issued for the victims’ arrest; and (d) that the potential victims had a choice of being arrested on the warrants or pay fines to have the arrest warrants dismissed. To make the calls seem real, the inmates created fictitious voicemail greetings on their contraband cellular telephones, identifying themselves as members of legitimate law enforcement agencies.
For those victims who wanted to pay a fine, the inmates instructed them to purchase pre-paid cash cards and provide the account number of the cash card or wire money directly into a pre-paid debit card account held by the inmates. Based on these false representations, the victims electronically transferred money to the inmates because they believed that the funds would be used to pay the fine for failing to appear for jury duty and would result in the dismissal of the arrest warrant.
Perkins took the account number of the pre-paid cash card and contacted his co-conspirators, who were not incarcerated, to have those individuals transfer the money from the cash card purchased by the victims to a pre-paid debit card possessed by the co-conspirators. Next, the co-conspirators withdrew the victim’s money, which had been transferred to the pre-paid debit card they controlled, via an automated teller machine or at a retail store. Typically, the co-conspirators then laundered the stolen money by purchasing a new cash card so that the victims’ funds could be transferred back to the inmates. Perkins worked with about 100 individuals outside of the prison and laundered approximately $1 million in proceeds from fraud and other illegal schemes.
Reginald Perkins, 35, of Atlanta, Georgia pleaded guilty to one count of money laundering in a hearing before U.S. District Judge Steve C. Jones. Sentencing is scheduled for June 20, 2016.
This case is being investigated by the Federal Bureau of Investigation. Assistant United States Attorney Christopher J. Huber is 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.
Albuquerque Woman Sentenced for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Reyes Tijerina, 35, of Albuquerque, N.M., was sentenced late yesterday afternoon in federal court to 60 months in federal prison followed by three years of supervised release for her methamphetamine trafficking conviction.
Tijerina was arrested on Jan. 14, 2015, on a two-count indictment charging her with distributing methamphetamine on Sept. 10, 2014 and Sept. 24, 2014, in Bernalillo County, N.M.
On Oct. 5, 2015, Tijerina pled guilty to one count of distribution of methamphetamine. In entering the guilty plea, Tijerina admitted that on Sept. 10, 2014, she sold methamphetamine to an undercover agent.
This case was investigated by the Albuquerque office of the DEA and was prosecuted by Assistant U.S. Attorney Jacob Wishard.
Appeals Court Agrees Department of Agriculture Did Not Act Contrary to LawRead the Press Release
United States Attorney Randolph J. Seiler announced that a 2011 wetland determination made by the United States Department of Agriculture (USDA), Natural Resources Conservation Service (NRCS) was affirmed by the Eighth Circuit Court of Appeals this week.
Arlen and Cindy Foster (Fosters) challenged a USDA determination that a portion of their farmland was a wetland within the meaning of federal statutes and regulations. In 2014, District Court Judge Karen Schreier granted summary judgment in favor of the USDA after concluding the agency’s decision was not arbitrary, capricious, or contrary to the law. The appeals court agreed.
In 1985, Congress enacted what are commonly referred to as “Swampbuster” provisions in order to combat the disappearance of wetlands through conversions into crop lands. The Swampbuster provisions provide that agricultural production on a converted wetland would cause a farmer to forfeit eligibility for a number of federal farm-assistance programs.
Under Swampbuster provisions, the NRCS is charged with determining and certifying wetlands. In order for a site to be classified as a wetland, NRCS must establish that three criteria have been met: (1) that the land has a predominance of hydric soils; (2) the presence of wetland hydrology (defined as sufficient surface water or groundwater at a frequency and duration sufficient to support a prevalence of hydrophyic vegetation); and (3) that under normal circumstances the land supports a prevalence of hydrophyic vegetation.
The NRCS determined that 0.8 acres of the Fosters’ property was a wetland. The Fosters appealed the wetland status to the National Appeals Division (NAD), an agency independent from the USDA, which affirmed the NRCS determination. The Fosters then filed a lawsuit in District Court challenging the basis for the NRCS's determination of the wetland status as being arbitrary, capricious, or otherwise not in accordance with the law.
The Fosters specifically challenged the NRCS’s use of aerial photography and a wetland reference site, but the District Court concluded, and the appeals court agreed, that the NRCS properly followed its wetland determination procedures and criteria established to make wetland determinations. Ultimately, the Courts held that the agency made a rational connection between the facts and the wetland determination, and thus, the NRCS did not act arbitrarily or capriciously, or contrary to the law.
The agency determination was defended by Assistant United States Attorney Cheryl Schrempp DuPris and the USDA, Office of the General Counsel.
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A Canadian Citizen Sentenced on Charges of Smuggling Turtles from the United StatesRead the Press Release
A Canadian citizen was sentenced today to 57 months in prison as a result of pleading guilty to six counts of smuggling turtles, some of which were endangered, from the United States in violation of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Special Agent in Charge Jill Birchell of the U.S. Fish and Wildlife Service.
Kai Xu, 27, of Windsor, Ontario was sentenced today before United States District Judge John Corbett O’Meara in Ann Arbor. As part of his sentence, Judge O’Meara ordered to pay over $17,000 in restitution for the care of the turtles.
At the time of the plea hearing, Xu admitted that on six occasions in 2014 he entered the United States from Canada and traveled to Fed Ex and UPS facilities in the metro-Detroit area, where he retrieved packages that contained a variety of different species of live turtles. Xu then illegally smuggled the turtles out of the country using three methods. On some instances, Xu repackaged the turtles and shipped them directly to China, concealing the wildlife in snow boots. On one occasion, Xu taped the live turtles to his legs and groin (a total of 51 live turtles) and returned to Canada, smuggling the turtles in his pants to conceal them from customs officials. Finally, on the day of Xu’s arrest, he packaged over 1000 turtles into suitcases that he sent with a runner he had hired to fly directly from Detroit to Shanghai. The turtles were recovered by U.S. Fish and Wildlife special agents. They had been packaged into boots and cereal boxes and concealed within luggage.
Special Agent Birchell stated, “One of our highest priorities is to investigate individuals and companies who are involved in the unlawful commercial trafficking and smuggling of our Nation's fish and wildlife. This investigation demonstrates our commitment to pursuing those who decimate wildlife populations for their unfettered greed, depriving future generations of enjoying these species in their native habitats.”
The case was investigated by the U.S. Fish and Wildlife Service and the Wildlife Enforcement Directorate within Environment and Climate Change Canada. U.S. Customs and Border Protection and Homeland Security Investigations also assisted with the investigation.
7th Street Gang Member Sentenced for Rico ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that 7th Street Gang member Luis Medina, 24, who pleaded guilty to Racketeering Influenced Corrupt Organizations (RICO) conspiracy, was sentenced to 210 months in prison by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney Joseph M. Tripi, who handled the case, stated that Luis Medina, as a member of the 7th Street Gang, sold heroin and possessed firearms. In addition, on April 16, 2006, Medina shot a rival 10th Street Gang member with a .22 caliber firearm. Furthermore, on June 13, 2009, while being held in the Erie County Holding Center, Medina learned that his cousin Christian Portes was killed by the 10th Gang members. Medina made a phone call from the holding center requesting that fellow 7th Street Gang members kill 10th Street Gang members in retaliation for the murder of his cousin. After being released on November 7, 2009, Medina himself fired shots at 10th Gang members.
A total of 18 defendants have been charged in this case. To date, 17 have been convicted.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the New York State Police, under the direction of Major Michael Cerretto, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid.
Tuesday 12 April 2016
Unlicensed Physician Pleads Guilty to Role in Detroit-Based $6.2 Million Medicare Fraud SchemeRead the Press Release
An Ohio man pleaded guilty to fraud charges for his role in a scheme to defraud Medicare out of approximately $6.2 million while he acted as an unlicensed physician at a Detroit in-home physician services company.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Cecil Alexander Kent Jr., 58, of Eastlake, Ohio, pleaded guilty yesterday before U.S. District Judge John Corbett O’Meara of the Eastern District of Michigan to one count of conspiracy to commit health care fraud, two counts of health care fraud and five counts of making false statements relating to health care matters. Sentencing is scheduled for Aug. 16, 2016, before Judge O’Meara.
Kent admitted that while he was employed at B&M Visiting Doctors PLC (B&M) and while he was unlicensed, he saw patients and falsified related patient records, including medical documents and billing documents, all under the name of a licensed medical doctor. He admitted that among those documents falsified were prescriptions for controlled substances, such as Fentanyl, that he personally wrote using the name and U.S. Drug Enforcement Administration (DEA) number of a licensed physician. Kent knew that Medicare did not pay for patient visits performed by unlicensed individuals, but that such claims were nonetheless submitted to Medicare through B&M, he admitted.
Charles McRae, 61, an unlicensed physician and part owner of B&M, and Alvin Williams, 65, an unlicensed physician, both of Detroit, were charged in the same indictment as Kent and pleaded guilty for their participation in this scheme to defraud. McRae and Williams will be sentenced in July 2016.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Trial Attorney Melissa Aoyagi and Assistant Chief Robert Zink of the Criminal Division’s Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
U.S. Attorney Vance Says White House Fair Chance Pledge Should Have Sound Footing in Birmingham AreaRead the Press Release
BIRMINGHAM – As the White House and U.S. Attorney General Loretta Lynch on Monday hosted 19 American companies committed to eliminating hiring barriers for people with criminal records, U.S. Attorney Joyce White Vance said she is proud that government and corporate leaders in the Birmingham area already are working to provide a pathway for a second chance to the thousands of people coming out of Alabama prisons each year.
The City of Birmingham in February became the first city in Alabama to “ban the box” on its hiring applications in order to give people with a criminal history a fair shot to compete for jobs and a chance to be judged on their qualifications. In November, Vance met with a group of Birmingham Business Alliance investors to discuss the importance of employment on the successful return to society of people leaving prison. These actions are right in step with the Fair Chance Business Pledge launched Monday by the Obama Administration, Vance said.
According to the White House, the pledge represents a call-to-action for all members of the private sector to improve their communities by eliminating barriers for those with a criminal record and creating a pathway for a second chance.
Many employers require job applicants to disclose conviction and arrest history on the initial job application. Often, when that disclosure is made, the applicant is immediately removed from further consideration for employment. The national “Ban the Box” campaign encourages governments and private employers to delay consideration of offense history within the hiring process.
There is strong data showing that ex-offenders who find employment are half as likely to reoffend as those who struggle to find a job, Vance said.
“For employers who believe it is unsafe to hire former inmates, there is also ample data showing that employed ex-offenders have better retention rates, better performance metrics, and pose no greater risk within the workplace than those without a conviction history,” she said.
In Alabama, more than 30,000 people are in prison or jail. The vast majority of those inmates – about 95 percent – will eventually return to the community. In Jefferson County alone, about 2,000 people return from prison annually.
“People who have completed a prison sentence for a crime they committed, should have a fair chance at success after paying their debt to society,” Vance said. “When they cannot get a driver's license or a job, they and the communities they live in are doomed to a cycle of repeated crime. Strong data shows that removing barriers to success and making it possible to find housing and transportation, and to train for and find employment reduces the likelihood that ex-offenders will commit new crimes and return to prison. In other words, we can make communities safer, families stronger and prisons less crowded and expensive for the taxpayer,” she said.
The U.S. Attorney’s Office will sponsor several educational events the week of April 25-29, which the Department of Justice has designated as National Reentry Week. Events in Birmingham will include a reentry simulation on Tuesday, April 26, and a roundtable conversation with ex-offenders at The Dannon Project on Thursday, April 28.
The reentry simulation, which will be presented at the National Alumni House on the University of Alabama at Birmingham campus, is designed to present an understanding of the many day-to-day obstacles someone coming out of prison faces in seeking a job, housing, or transportation. The Dannon Project is a non-profit organization that provides services to people coming out of prison, including counseling and job training. It also works with employers to find appropriate job placements and provides support to both employer and employee to encourage success on the job.
Businesses interested in information about hiri wh_fair_chance_business_pledge.pdfng ex-offenders, or for information about the Reentry Week events, call Assistant U.S. Attorney Jeremy Sherer, the office’s reentry coordinator, at 205-244-2019.
U.S. Attorney Barry Grissom to Step DownRead the Press Release
KANSAS CITY, KAN. - Barry Grissom announced today that he will step down as U.S. Attorney for the District of Kansas effective April 15.
“Serving the American people and the citizens of Kansas is the best job in world,” Grissom said. “It has been an honor and a privilege to work with the attorneys and staff of the U.S. Attorney’s Office in the District of Kansas.”
U.S. Attorney General Loretta Lynch thanked Grissom for his service: “Since taking office in 2010, U.S. Attorney Barry Grissom has rendered exemplary service to the Department of Justice, the citizens of Kansas, and the American people,” Lynch said. “Throughout his tenure, Barry worked tirelessly to build new partnerships with state and local law enforcement; to strengthen relationships between police officers and the communities they serve; and to uphold the nation’s civil rights laws. From establishing an innovative working group on human trafficking to lending his sound advice as a member of the Attorney General’s Advisory Council, Barry has served with energy, with commitment, and with steadfast devotion to our highest ideals. Ultimately, Barry has helped to make his beloved state of Kansas – and the entire United States – a safer and more just place. I thank him for his outstanding contributions, and I wish him the very best in his next endeavor.”
First Assistant U.S. Attorney Tom Beall will serve as acting U.S. Attorney.
Grissom was nominated by President Barack Obama in April 2010 and confirmed by the U.S. Senate in August 2010. He served as a member of the U.S. Attorney General’s Advisory Committee, which provides advice and counsel to the U.S. Attorney General. He served on the Justice Department’s subcommittees focusing on civil rights, community issues, Native American issues, health care fraud, local government coordination and veterans’ rights.
As U.S. Attorney Grissom led an office of approximately 50 Assistant U.S. Attorneys and 50 support staff working in three offices located in Wichita, Topeka and Kansas City, Kan.
During his tenure, Grissom made civil rights enforcement and community outreach top priorities. Among other accomplishments, Grissom:
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Founded the Kansas Civil Rights Symposium, bringing law enforcement officers and civil rights advocates together from across Kansas together annually for a day-long conference.
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Promoted efforts to build better relationships between law enforcement agencies and the communities they serve.
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Founded the District’s first Human Trafficking Working Group. The group’s mission was to coordinate the work of local, state and federal law enforcement, as well as nonprofit agencies and victim service providers, to fight human trafficking.
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Established the District’s first criminal prosecutor position assigned to carry out the Justice Department’s Smart on Crime Initiative. Objectives included reducing penalties for low-level, non-violent drug offenders, as well as pursuing new and innovative ways to promote public safety.
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Directed the District’s Project Safe Neighborhood program, targeting for federal prosecution felons who unlawfully possessed firearms.
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Oversaw the District’s Project Safe Childhood program, targeting child sex offenders for long federal prison sentences.
Major cases during Grissom’s tenure included a federal racketeering case targeting gang members in Dodge City, the conviction and 20-year sentencing of a man who attempted to explode a bomb at an airport in Wichita, the prosecution and conviction of business owners who knowingly employed undocumented workers, and the prosecution of physicians and other health care providers who diverted prescription medications.
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Tulsa Man Charged with Money LaunderingRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that an Information was filed in the United States District Court for the Northern District of Oklahoma charging WAYNE SCOTT HARRINGTON, age 67, of Tulsa, Oklahoma with MONEY LAUNDERING, in violation of Title 18, United States Code, Section 1957. Money Laundering is punishable by up to 10 years imprisonment, a fine not to exceed $250,000.00 or twice the amount of the criminally derived property, 3 years of supervised release and a $100 special assessment.
The Information alleges that on or about June 5, 2012 HARRINGTON, a former dentist, laundered monies obtained from fraudulent billing of Medicaid and Medicare during his practice of dentistry.
The charges are a result of an investigation by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigative Services, Department of Defense – Office of Inspector General, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration and the Oklahoma Attorney General Medicaid Fraud Control Unit.
Assistant United States Attorney Melody Nelson and Assistant United States Attorney Edward Snow represent the United States.
“The above named individual has been charged with a federal crime or crimes. An Information does not constitute evidence of guilt. An Information is a method of bringing charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt. United States Sentencing Guidelines may be considered, upon conviction, by the sentencing court. Federal prison sentences are non-parolable.”
Supplemental Brief Filed in the Case of Zubik v. BurwellRead the Press Release
Attached please find a PDF version of the supplemental brief in Zubik v.Burwell that was filed April 12, 2016.
Sudanese Man Pleads Guilty in Manhattan Federal Court in Connection with Bank Fraud and Credit Card Fraud SchemesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and David Schnorbus, Special Agent-in-Charge of the New York Field Office of the United States Department of State, Diplomatic Security Service (“DOS-DSS”), announced today that ASHRAF LAKOU pled guilty to bank fraud, credit card fraud, passport fraud, and aggravated identity theft charges in connection with orchestrating a scheme to use stolen victim identification information to make fraudulent credit card purchases and to defraud financial institutions by depositing counterfeit checks into accounts controlled by LAKOU and his co-conspirators. Through these schemes, LAKOU and his co-conspirators attempted to defraud individuals, businesses and financial institutions out of more than $1.5 million. LAKOU pled guilty before United States Magistrate Judge James L. Cott.
According to the criminal Complaint, Indictment, and other documents filed in Manhattan federal court, as well as statements made at related court proceedings:
From September 2013 through July 2015, LAKOU and his co-conspirators engaged in a scheme to defraud businesses and financial institutions by obtaining checks made out to legitimate businesses, opening fraudulent bank accounts in the names of the victim businesses, depositing the checks into the fraudulent accounts, and withdrawing funds from the fraudulent accounts. LAKOU and his co-conspirators carried out this scheme by, among other means, submitting false documentation in connection with bank account applications and forging the signatures of other actual persons.
From May 2014 through July 2015, LAKOU and his co-conspirators also engaged in a scheme to commit credit card fraud by using stolen credit card information to make fraudulent purchases of jewelry and other merchandise. LAKOU and his co-conspirators carried out this credit card fraud scheme by, among other means, fraudulently adding their own names as authorized users of preexisting victim credit cards and by submitting fraudulent applications for new credit card accounts in the names of their victims.
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LAKOU, 27, of Manhattan, pled guilty to one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit access device fraud, which carries a maximum sentence of seven-and-a-half years in prison; one count of passport fraud, which carries a maximum sentence of 10 years in prison; and three counts of aggravated identity theft, each of which carries a mandatory sentence of two years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge. As part of his plea, LAKOU agreed to pay $557,894.50 in restitution to victims and to pay $557,894.50 in forfeiture. Lakou is scheduled to be sentenced at a future date by U.S. District Judge Victor Marrero.
Zoheb Qamran, 28, of Manhattan, and Jessica Hattar, 26, of Manhattan, have been separately charged in connection with the bank fraud and credit card fraud schemes. The charges against Qamran and Hattar are merely allegations, and they are presumed innocent unless and until they are proven guilty beyond a reasonable doubt.
Mr. Bharara praised the outstanding efforts of DOS-DDS in the investigation.
The case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant United States Attorney Jonathan Cohen is in charge of the prosecution.
Stockbroker Pleads Guilty to Securities Fraud for Operating $1.4 Million Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – Charles Caleb Fackrell, 36, of Booneville, N.C. appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to one count of securities fraud for operating a $1.4 million Ponzi scheme, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and North Carolina Secretary of State Elaine F. Marshall.
According to filed court documents and today’s plea hearing, beginning from in or about May 2012 to about December 2014, Fackrell executed a Ponzi scheme using approximately $1.4 million in funds he solicited from at least 20 victim investors in Wilkes County and elsewhere. According to court records, Fackrell was a stockbroker who used his position of trust to solicit victim investors and steer them away from legitimate investments to purported investments with “Robin Hood, LLC,” “Robinhood LLC,” “Robin Hood Holdings, LLC,” “Robinhood Holdings, LLC” and related entities (collectively, “Robin Hood”). These were entities Fackrell controlled and through which he could access the victims’ funds.
Court records indicate that Fackrell solicited his victim investors by making false and fraudulent representations, including that the investors’ money would be invested in, or secured by, gold and other precious metals, when in fact Fackrell spent only a fraction of investor money on such assets. According to court records, Fackrell also falsely told victims that Robin Hood was a very safe investment, paying guaranteed annual returns of 5% to 7%. According to court records, contrary to the promises he made to his victims and instead of investing the victims’ funds as promised, Fackrell used the majority of the money to cover personal expenditures, including hotel expenses, groceries, and medical bills, to make purchases at various retail shops and to make large cash withdrawals. Fackrell also used a portion of the victims’ money to make purported “interest” payments to investors who demanded their money back and to induce further investments from existing investors and their friends and family members. In all, according to court records, Fackrell diverted over $700,000 of his victims’ money – nearly half of the investor money he obtained – back to other investors in Ponzi fashion payments.
According to court records, in an attempt to conceal his fraud, Fackrell asked a third party to destroy a computer and documents related to the Ponzi scheme, explaining that he was in trouble with the U.S. Securities and Exchange Commission.
“Fackrell is an unscrupulous scammer that betrayed those who trusted him with their nest egg. Instead of using his clients’ money for legitimate investments, as he promised he would, Fackrell focused on enriching himself and perpetuating his fraud through lies. Thanks to the great work of our law enforcement partners Fackrell’s business of siphoning his clients’ money is over,” said U.S. Attorney Rose. “This case is an example of how financial predators will use lies and deceit to get their hands on people’s hard-earned money, quickly turning trusting investors into financial fraud victims,” Rose added.
“At its most basic level, this is a case about greed and the abuse of trust. Charles Fackrell had no regard for the victims he betrayed, making empty promises for big investment returns. Now he will be held accountable for his actions because of the agents and prosecutors who worked so diligently to bring him to justice,” said Special Agent in Charge Strong.
“This case is particularly egregious because unlike the majority of registered stock brokers, this scam artist betrayed the trust of his clients for his own personal gain and benefit,” Secretary Marshall said. “We are extremely proud of assembling a case that has resulted in a guilty plea today.”
Fackrell was detained following his guilty plea. The securities fraud charge carries a maximum prison term of 20 years and a $5 million fine. A sentencing date for the defendant has not been set.
The case is being investigated FBI and the Securities Division of the North Carolina Department of the Secretary of State. U.S. Attorney Rose also thanked the North Carolina State Bureau of Investigation, the Yadkinville Police Department and Kinston’s Department of Public Safety for their invaluable assistance in this investigation.
The prosecution is being handled by Assistant United States Attorney Daniel Ryan of the U.S. Attorney’s Office in Charlotte.
St. Francis Man Charged with Assaulting Federal OfficersRead the Press Release
United States Attorney Randolph J. Seiler announced that a St. Francis, South Dakota, man has been indicted by a federal grand jury for two counts of Assaulting, Opposing, Resisting, and Impeding a Federal Officer.
James Two Charger, age 24, was indicted on March 15, 2016. He appeared before United States Magistrate Judge Mark A. Moreno on March 30, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction for each count is up to 8 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
It is alleged that on March 1, 2016, Two Charger assaulted one officer by hitting the officer in the abdomen and side as the officer attempted to arrest Two Charger. Two Charger then spit directly at another officer’s face.
The charge is merely an accusation and Two Charger is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribal Law Enforcement Services. Assistant U.S. Attorney Carrie G. Sanderson is
prosecuting the case.
Two Charger was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been scheduled for May 25, 2016.
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St. Albans man pleads guilty to Federal gun crimesRead the Press Release
CHARLESTON, W.Va. – A St. Albans man pleaded guilty today to two federal gun crimes, announced Acting United States Attorney Carol Casto. Christopher Ayash, 47, entered his guilty plea to possession of a firearm with an obliterated serial number and to possession of six firearms in furtherance of a federal drug trafficking crime.
Ayash admitted that he arranged for the illegal shipment of drugs, including oxycodone and coca leaves, a precursor used to manufacture cocaine, through the mail to West Virginia. On October 7, 2015, a federal search warrant was executed at Ayash’s St. Albans residence and law enforcement discovered a secret room hidden behind a fireplace. The secret room housed a laboratory set up by Ayash to manufacture cocaine and other controlled substances. Law enforcement seized over 60 firearms from the residence, including fully automatic weapons, silencers, and a handgun with an obliterated serial number. Ayash admitted that he possessed six of the firearms in furtherance of his drug trafficking crimes. As part of his plea, Ayash agreed to forfeit $300,000 to the United States. He also agreed to demolish a strip club he owned in St. Albans and to transfer the property to Kanawha County.
When he is sentenced on July 11, 2016, Ayash faces up to five years in prison for possession of a firearm with an obliterated serial number, and at least five years and up to life in prison for the other gun crime.
The investigation was conducted by the United States Postal Inspection Service, the Metropolitan Drug Enforcement Network Team, Homeland Security Investigations, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of several other law enforcement agencies. Assistant United States Attorney Haley Bunn is in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime. This case was also prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat illegal drugs in our communities, including the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and other drugs in communities across the Southern District.
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Rosebud Man Sentenced for Felon in Possession of a FirearmRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rosebud, South Dakota, man convicted of Felon in Possession of a Firearm was sentenced on April 5, 2016, by United States District Court Judge Roberto A. Lange.
Anthony Farmer, age 32, was sentenced to 27 months in custody, 3 years of supervised release, and $100 special assessment to the Federal Crime Victims Fund. Farmer was also ordered to forfeit his firearm.
Farmer was indicted for Felon in Possession of a Firearm and Failure to Register as a Sex Offender by a federal grand jury on June 9, 2015. He pled guilty to Felon in Possession of a Firearm on January 20, 2016.
On March 16, 2010, Farmer was convicted of Abusive Sexual Contact with a Child and received a 48 months custody sentence, to be followed by a 5 year term of supervised release. On August 2, 2013, Farmer began his term of supervised release.
On April 1, 2015, Farmer was arrested for sex offender registration violations and was in possession of a .22 caliber rifle at the time of his arrest.
This case was investigated by Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Carrie G. Sanderson prosecuted the case.
Farmer was immediately turned over to the custody of the U.S. Marshals Service.
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Rosebud Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rosebud, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on April 11, 2016, by United States District Court Judge Roberto A. Lange.
Dwight Black Spotted Horse, age 31, was sentenced to 21 months in custody, 5 years supervised release, and $100 special assessment to the Federal Crime Victims Fund.
Black Spotted Horse was indicted for Failure to Register as a Sex Offender by a federal grand jury on December 8, 2015. He pled guilty on February 9, 2016.
On April 23, 2007, Black Spotted Horse was sentenced to 70 months in federal custody for Sexual Abuse of a Minor. As a result of his conviction, he is required to register as a sex offender. Between September 14, 2015, and November 6, 2015, Black Spotted Horse, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under Federal Law, failed to properly register as a sex offender in Pennington county and elsewhere.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Carrie G. Sanderson prosecuted the case.
Black Spotted Horse was immediately turned over to the custody of the U.S. Marshals Service.
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Rosebud Man Charged with Child AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rosebud, South Dakota, man has been indicted by a federal grand jury for Child Abuse and Operating a Motor Vehicle Under the Influence of Alcohol with a Minor Present in the Motor Vehicle.
Colton Poorman, age 36, was indicted on March 15, 2016. He appeared before United States Magistrate Judge Mark A. Moreno on March 30, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction of child abuse is up to 15 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. The maximum penalty upon conviction of operating a motor vehicle under the influence of alcohol with a minor present in the motor vehicle is up to 1 year in custody and/or a $100,000 fine, 1 year of supervised release, and $25 to the Federal Crime Victims Fund. Restitution may also be ordered.
It is alleged that on October 11, 2015, Poorman committed the public offense of driving or control of a vehicle while under the influence of alcohol and that there was a minor child in the vehicle who had not attained the age of seven years.
The charge is merely an accusation and Poorman is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Carrie G. Sanderson is prosecuting the case.
Poorman was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
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Rochester Man Pleads Guilty to Gun ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Kevin Small, 25 of Rochester, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to possessing a firearm not registered in the National Firearms Registry, that is, a sawed-off shotgun. The charge carries a maximum sentence of 10 years in prison, a fine of $250,000.00, or both.Assistant U.S. Attorney Charles E. Moynihan, who is handling the case, stated on April 5, 2014, the Rochester Police Department responded to the area of 177 Sixth Street in Rochester for a report of a burglary in progress. The caller indicated she heard glass break and saw a male climb through the window of the house next door. The caller also described a person with a gray pullover and blue hat getting into a dark station wagon, headed north on Sixth Street. A short while later, officers observed Small, who matched the description provided by the caller, enter a store in the area. The defendant was stopped, detained and brought back to the location of the burglary for further investigation which ultimately determined that Small resided at the location but had been locked out by his girlfriend. The defendant was entering the location through the window to get his belongings which he was putting in the dark colored station wagon. Officers searched the vehicle and found the sawed off shotgun, a 12 gauge, Iver Johnson Excel single shot shotgun.
The plea is the culmination of an investigation on the part of Rochester Police Department, under the direction of Rochester Police Department Chief Michael Ciminelli, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid.
Sentencing is scheduled for July 14, 2016, at 3:00 p.m. before Judge Wolford.
Rochester Man Pleads Guilty to Drug and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Edwin Murray, 51 of Rochester, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to possession with intent to distribute cocaine and possession of a firearm in the furtherance of a drug trafficking crime. The charges carry a mandatory minimum penalty of five years in prison, a maximum of 20 years, and a fine of $1,000,000 or both.Assistant U.S. Attorney Charles E. Moynihan, who is handling the case, stated on August 20, 2014, members of Rochester Police Department executed a search warrant in the downstairs apartment at 54 Miller Street in Rochester. During the execution of the search warrant, an investigator encountered Murray, who was the only person in the house at the time, in a bedroom. Under a bed, investigators found a black shoe box. Inside they found a clear plastic bag that contained 84 smaller ziplock baggies. Each baggie contained a white rocky material which was later identified as crack cocaine. Officers also located a wallet which contained $346.00 in United States Currency and marijuana. Officers also found a Ruko-Armscor Model M14 .22 caliber long rifle and a magazine for the rifle, which contained six rounds of .22 caliber ammunition.
The plea is the culmination of an investigation on the part of Rochester Police Department, under the direction of Rochester Police Department Chief Michael Ciminelli, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid.
Sentencing is scheduled for July 14, 2016, at 2:00 p.m. before Judge Wolford.
Richfield man guilty of illegally dealing firearms after he sold 300 firearms over three yearsRead the Press Release
A Richfield Township man pleaded guilty in federal court to illegally dealing firearms after he sold approximately 300 firearms over a three-year period, said Acting U.S. Attorney Carole S. Rendon and Donald J. Soranno, Special Agent in Charge of the ATF’s Columbus Field Division.
Timothy J. Cassinger, 48, is scheduled to be sentenced July 13.
Cassinger was not a licensed firearms dealer but sold approximately 300 firearms between June 2012 and October 2015. Many of the weapons were purchased from federal firearms licensees and then resold by Cassinger at gun shows or online, according to court documents.
Eleven firearms originally purchased by Cassinger were intercepted by Spanish authorities in September 2014, on a ship destined for Beirut, Lebanon . Other firearms purchased by Cassinger were later recovered in Cleveland, Columbus, East Cleveland, New York City and other cities, according to court documents.
This case is being prosecuted by Assistant U.S. Attorney Kelly M. Galvin following an investigation by the ATF.
Puerto Rico Resident Sentenced to More Than 13 Years in Prison for Bank Fraud SchemeRead the Press Release
On April 4, 2016, Rosa E. Castrillón-Sánchez, a resident of Puerto Rico, was sentenced to 159 months in prison, to be followed by three years of supervised release, and was ordered to pay $5 million in restitution to victims affected by a scheme to defraud individuals and financial institutions on the island.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Pedro Gomez, Special Agent in Charge, United States Secret Service (USSS), Puerto Rico Office, Carlos Cases, Special Agent in Charge, Federal Bureau of Investigation (FBI), Puerto Rico Office, and Monsita Lecaroz, Assistant United States Trustee, Office of the United States Trustee, made the announcement.
Castrillón-Sánchez pled guilty on December 13, 2013 to one count of conspiracy to commit bank fraud and wire fraud, in violation of Title 18, United States Code, Section 1349, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028(a)(1).
According to court documents, Castrillón-Sánchez befriended individuals and falsely represented that she was the beneficiary to a Certificate of Deposit (“CD”) or trust for a large amount of money that was frozen at a local bank in Puerto Rico. Castrillón-Sánchez would request that an individual provide her with a sum of money or take out a personal loan to assist in the releasing of the funds – with full repayment promised as soon as the CD was unfrozen. As part of the scheme, Castrillón-Sánchez and other co-conspirators used false documents and lease agreements to obtain some of the loans and would distribute payments to individuals using Western Union wire transfers and money orders. From April 2005 to March 2010, Castrillón-Sánchez and her co-conspirators fraudulently induced over 90 individuals to loan the defendant over $5,000,000 in cash, based on false representations and promises that the individuals would be repaid in a short period of time.
Castrillón-Sánchez’s conspired with her mother Rosa Sanchez Mercado, Jorge Rivera Izquierdo, and others to use proceeds from the fraudulent scheme. Castrillón-Sánchez stored documents used to facilitate the scheme at the home she shared with Sanchez Mercado. Rivera Izquierdo assisted with the purchase of a Toyota Sequoia on September 13, 2008, using $40,000 of proceeds from the fraudulent scheme as down payment. On May 29, 2009, Rivera Izquierdo assisted with the purchase of a second vehicle, a BMW 335i, using $63,419.50 of proceeds from the scheme as payment for the vehicle.
Rivera Izquierdo was found guilty, at trial, of two counts of money laundering in connection with the purchase of the two vehicles using money derived from the fraudulent scheme. Rivera Izquierdo was sentenced on April 27, 2015 to 42 months in prison, to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $201,503.73.
Co-defendants Carmen Sosa Barreto, Luis Roriguez Barreto, Limarie Amalbert Birriell, Amarilys Pagan Estrella, and Noemi Delgado Alice previously pled guilty and were sentenced to probation.
Sanchez Mercado pled guilty on February 1, 2013 to one count of conspiracy to commit bank fraud and wire fraud, in violation of Title 18, United States Code, Section 1349. Sanchez Mercado is scheduled to be sentenced on May 3, 2016.
Mr. Ferrer commended the investigative efforts of IRS-CI, USSS, and FBI, and thanked the United States Trustee’s Office for its assistance. The case was prosecuted by Assistant United States Attorney H. Ron Davidson and Special Attorneys to the Attorney General Charles R. Walsh and Luke V. Cass.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Prior Felon from Taos Sentenced to Prison for Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Ivan Lujan, 32, of Taos, N.M., was sentenced today in federal court in Santa Fe, N.M., to 51 months in prison followed by three years of supervised release for violating the federal firearms laws.
Lujan was arrested on Oct. 28, 2015, on a criminal complaint charging him with being a felon in possession of a firearm on Oct. 9, 2015, in Bernalillo County, N.M. Lujan was prohibited from possessing firearms or ammunition because of his previous convictions in the 8th Judicial District of New Mexico for trafficking a controlled substance, possession of cocaine, aggravated assault with a deadly weapon, and possession of a firearm or destructive device by a felon.
On Nov. 12, 2015, Lujan entered a guilty plea to a felony information charging him with being a felon in possession of a firearm. In his plea agreement, Lujan admitted that on Oct. 9, 2015, he possessed a semiautomatic pistol even though he was prohibited from doing so because of his status as a convicted felon.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Bernalillo County Sheriff’s Office and the Albuquerque Police Department. Assistant U.S. Attorney Jacob Wishard prosecuted the case.
Press AdvisoryRead the Press Release
SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian will conduct a press conference tomorrow (Wednesday April 13, 2016) at 2 PM in the Syracuse U.S. Attorney’s Office to announce a case of interest to the media.
Wednesday, April 13, 2016
2:00 PM
U.S. Attorney’s Office
100 S. Clinton Street
Syracuse, New York
9th FloorPremiertox Pays United States and Tennessee $2.5 Million to Resolve False Claims Act LawsuitRead the Press Release
Settlement covers alleged conduct in Kentucky
LOUISVILLE, Ky. - PremierTox 2.0, Inc. has paid $2.5 million to resolve alleged violations of the False Claims Act, announced John E. Kuhn, Jr., United States Attorney for the Western District of Kentucky. PremierTox is a company that provides drug urine screening services to citizens of Kentucky and Tennessee. The government alleged that PremierTox submitted false claims when billing Medicare, TennCare and Kentucky Medicaid for drug urine screening services. PremierTox previously did business in Tennessee under the name Nexus.
“Losses caused by health care fraud amount to tens of billions of dollars every year,” said U.S. Attorney John Kuhn, of the Western District of Kentucky. “Often those losses are passed along to consumers in the form of increased costs. For that reason, my office will work with federal, state, and local law enforcement to uncover these activities and recover every dollar.”
The settlement resolves the government’s allegations that PremierTox and Nexus submitted three types of false claims during the period of September 2011 through June 2014. During that period, PremierTox was under different, former ownership and management. The government alleged that PremierTox had a swapping arrangement, in which Nexus gave below cost discounts on its urine drug screen tests to patients in Tennessee without insurance, in exchange for physicians’ referring their patients with Medicare or TennCare coverage to Nexus. The government also contended that, in Tennessee, Nexus submitted excessive claims to Medicare and TennCare for laboratory testing that was beyond what was medically reasonable and necessary. In addition, the government claimed that, in Kentucky, PremierTox provided point of care testing cups to medical offices free of charge to induce those providers to use PremierTox’s services.
Under the settlement agreement, PremierTox paid a total of $2,500,000. Of that amount, $2,125,000 covers the conduct in Tennessee, and $325,000 covers the conduct in Kentucky. The United States will receive $1,757,300 under the settlement, and Tennessee will receive $325,200.
"Medically unnecessary lab tests and financial incentives from labs to doctors in exchange for referrals are costing the taxpayers millions of dollars," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "This settlement is one of many that are sending a strong message to the lab industry that they need to clean up their act."
The allegations resolved by today’s settlement were originally raised in two lawsuits filed against PremierTox in Tennessee and Kentucky under the qui tam, or whistleblower provision of the False Claims Act. This provision allows private citizens to bring civil suits on behalf of the government and to share in any recovery.
The lawsuit in Tennessee was filed by a former office manager of a pain clinic in Cookeville. The relator in this case will receive $361,250. The relator who brought the lawsuit in Kentucky is the former CEO of PremierTox and will receive and $56,250.
The Tennessee lawsuit remains pending against several other defendants whom the United States and Tennessee allege violated the False Claims Act and the Tennessee Medicaid False Claims Act.
This case was investigated by the U.S. Department of Health & Human Services Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. The United States is represented in these cases by Assistant U.S. Attorneys Ellen Bowden McIntyre for the Middle District of Tennessee and Ben Schecter of the Western District of Kentucky. The State of Tennessee is represented by Assistant Attorney General Phillip Bangle.
The two cases are docketed as United States ex rel. Norris v. Anderson, No. 3:12-cv-00035 (M.D. Tenn.) and United States ex rel. Duncan v. Nexus Lab, Inc., No. 1:14-cv-89-R (W.D. Ky.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Online Con Artist Sentenced to Prison for Fraud SchemeRead the Press Release
PITTSBURGH - A Maryland resident has been sentenced in federal court to 24 months and one day imprisonment, supervised release for three years and ordered to pay more than $1.2 million in restitution on his conviction of wire fraud and aggravated identity theft, United States Attorney David J. Hickton announced today.
United States District Judge Gustave Diamond imposed the sentence on Sigismond Senyo Segbefia, 29, of Silver Spring, Maryland.
According to the information presented to the court, Segbefia engaged in an online romance scam and defrauded victims out of money by posing as other persons on popular dating websites ChristianMingle.com and Match.com. He also is accused of wiring illicit funds to Ghana.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation for the successful prosecution of Segbefia.
Oldham County Man Guilty of Aiding and Abetting the Sex Trafficking of A ChildRead the Press Release
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. today announced the guilty plea of an Oldham County, Kentucky, man before Senior District Judge Charles R. Simpson III, in United States District Court, to a charge of aiding and abetting the sex trafficking of a minor
“Howard Chambers subjected this young girl to repeated sexual abuse,” stated U.S. Attorney John Kuhn. “Acting with unfathomable selfishness, he chose to traumatize a child in favor of his own self-gratification. The goal of my office is to obtain a sentence of incarceration that insures Chambers will never touch another child. I do want to thank the law enforcement officers and our prosecutor who worked tirelessly together in the investigation of these crimes. I want the public to know we are doing everything in our power to protect the most vulnerable members of our community.”
Howard Key Chambers, 65, admitted today in court, that he and Christopher Kosicki helped each other to carry out the sex trafficking of a child. Chambers admitted to travelling to co-defendant, Christopher Kosicki’s home in Louisville, to engage in sexual activity with a 10-year-old turned 11-year-old child, between six and eight times, from 2013 until August 2014. The two helped each other entice, harbor, provide, obtain, and maintain a person that had not attained the age of 14 years who was caused to engage in commercial sex acts. Commercial sex acts include any sex act, on account of which anything of value is given to or received by any person. On several occasions, Chambers gave Kosicki money after engaging in sexual activity with the child (age 10 and then 11). On at least one occasion, Chambers admitted to giving money directly to the child after engaging in sexual activity with her. Additionally, on one occasion, Kosicki photographed Chambers engaging in sexual activity with the child.
In 2013, Chambers met co-defendant Kosicki via Craigslist.com. The two communicated online and, eventually, Chambers travelled from Oldham County to Louisville to meet Kosicki at Kosicki’s residence. The criminal activity took place at Kosicki’s Louisville home.
Kosicki was sentenced to serve 50 years in prison, followed by a life term of Supervised Release, by Chief District Judge Joseph H. McKinley Jr., on February 1, 2016. Kosicki pleaded guilty to multiple child sexual exploitation charges, including sex trafficking of a child and the production of child pornography involving 10 children, on July 23, 2015, in U.S. District Court in Owensboro, Kentucky. Kosicki, 27, pleaded guilty in total to 15 charges, in a Superseding Indictment, including sex trafficking a child under age 14, and aiding and abetting another person to cross a state line with intent to engage in sexual acts with a person who had not attained the age of 12 years.
Law enforcement officials first became aware of Kosicki’s criminal conduct after arresting Raymond Shadburn in Seymour, Indiana, on September 24, 2014, on child exploitation charges. During a post-arrest interview, Shadburn provided information that led law enforcement to Kosicki’s residence in Louisville. Shadburn is being prosecuted in the Southern District of Indiana.
Sentencing will be held before Chief Judge McKinley, on July 5, 2016, in Louisville, Kentucky.
Assistant United States Attorneys Jo E. Lawless and Spencer McKiness prosecuted the case. The Indianapolis Police Department, District of Columbia Metro Police, Louisville Metro Police, and the Federal Bureau of Investigation (FBI) conducted the investigation.
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."
Monmouth County, New Jersey, Man Charged with Production and Receipt of Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was arrested today for allegedly soliciting an underage girl to produce images of herself engaged in sexually explicit conduct and send the images to him through an online instant messaging application, U.S. Attorney Paul J. Fishman announced.
Matthew Kaminsky, 49, of Matawan, New Jersey, is charged by complaint with one count of production of images containing child pornography, and one count of receiving images containing child pornography via the internet. He is scheduled to appear later today before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court.
According to documents filed in this case and statements made in court:
Kaminsky allegedly met various underage girls through online chat applications and sent them naked pictures of himself. In late January of 2015, over the course of several days, he began corresponding with a 13-year-old girl over an online chat application and induced her to take nude pictures of herself and to send them to him.
In March 2015 law enforcement officers recovered computer equipment belonging to Kaminsky containing images and videos appearing to be of child sexual abuse.
Law enforcement officers located and interviewed the 13-year-old girl Kaminsky had chatted with online in January of 2015, and she confirmed that she had chatted online with Kaminsky and had sent him nude pictures of herself at his request.
The count of receipt of child pornography carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine. The count of production of child pornography carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison, and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Molly S. Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Mexican National Arrested in New Mexico Based on Seizure of More Than Seven Pounds of HeroinRead the Press Release
ALBUQUERQUE – Aaron Martin Mercado-Gracia, 30, a Mexican national from Durango, Mexico, made his initial appearance today in federal court in Albuquerque, N.M., on a criminal complaint charging him with possession of more than seven pounds of heroin with intent to distribute. Mercado-Gracia remains in federal custody pending a preliminary hearing and a detention hearing scheduled for April 13, 2016.
The federal charge against Mercado-Gracia was announced by U.S. Attorney Damon P. Martinez, 13th Judicial District Attorney Lemuel Martinez, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, Tex., and New Mexico State Police Chief Pete Kassetas.
Mercado-Gracia was arrested on March 25, 2016, after New Mexico State Police officers allegedly found approximately 3.28 kilograms (7.25 pounds) of heroin concealed in the vehicle Mercado-Gracia was driving during a routine traffic stop on Interstate 40 in Cibola County, N.M.
If convicted of the charge in the criminal complaint, Mercado-Gracia faces a statutory penalty of a mandatory minimum of ten years and a maximum of life in federal prison. Charges in criminal complaints are merely accusation and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of Homeland Security Investigations and the New Mexico State Police with assistance from the 13th Judicial District Attorney’s Office for the State of New Mexico.
Assistant U.S. Attorney Eva M. Fontanez is prosecuting the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with Bernalillo County, DEA, Healing Addiction in our Community (HAC) and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Maumelle Man Sentenced to 20 Years Imprisonment for Production of Child PornographyRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, Special Agent in Charge Raymond R. Parmer, Jr., of the New Orleans Field Office for Homeland Security Investigations, and William J. Bryant, Director of the Arkansas State Police, announced today that Seth Christian Ganahl, age 42, of Maumelle, Arkansas, was sentenced to 20 years imprisonment and a lifetime of supervised release for production of child pornography.
An indictment handed down by a Grand Jury in the Eastern District of Arkansas on February 4, 2015, charged Ganahl with two counts of attempted enticement of a minor to engage in sexual activity, one count of enticement of a minor to engage in sexual activity, one count of transportation of a minor with the intent to engage in sexual activity, one count of attempted production of child pornography, and two counts of production of child pornography.
The charges in the indictment were based on an investigation that began in August 2014, when a minor disclosed to her mother and the Maumelle Police Department that Ganahl had previously asked her to engage in illicit sexual activity on multiple occasions. After the minor’s disclosure, a second minor disclosed that Ganahl had also asked her to engage in illicit sexual activity.
Ganahl was arrested by the Maumelle Police Department on August 27, 2014. Electronic devices seized and searched pursuant to federal search warrants revealed that Ganahl was using the name Christian Canon, and his business, Little Rock Models, to entice minors to send him photographs and videos of the minors engaged in sexually explicit conduct. Ganahl would then pay the minors for the photographs and videos.
On April 12, 2016, Ganahl entered a plea to one count of production of child pornography. Ganahl admitted to meeting minors on various social networking websites and communicating with them via Skype. Ganahl admitted that he asked a minor, via Skype, to send him a nude photograph with his name and the date on it to prove she was not law enforcement. After sending the photograph, the minor later asks Ganahl "do I have to be over a certain age to do this? I will be 16 this month if that is alright." Ganahl responded, "your age is perfect." Ganahl then asked the minor for multiple photographs and videos of her engaging in sexually explicit conduct and paid her at least $900 for the images. Ganahl also admitted to doing a sexually explicit photo shoot at his home with the minor where he made her wear a dog collar and chain.
"The conduct by the defendant in this case continues to show the dangers of the internet and the ability of adults to easily manipulate and prey on children through the internet," Thyer said. "My office hopes that a sentence of 20 years imprisonment plus lifetime supervision sends the message that the internet is not anonymous and we will continue to locate these perpetrators who hide behind screen names and false personas to take advantage of the most vulnerable among us."
Pursuant to a Rule 11(c)(1)(C) plea agreement, the United States and Ganahl agreed to the sentence of 20 years imprisonment. United States District Judge Kristine G. Baker also sentenced Ganahl to a lifetime of supervised release following imprisonment.
"Individuals who produce child pornography are directly responsible for what is, in plain language, the rape of children. Production of child pornography steals the innocence of children and destroys lives," Parmer said. "Criminals who prey on children will continue to be one of the agency’s highest priorities in order to protect the innocent from these terrible crimes."
"This case began with a call to the Arkansas State Police Child Abuse Hotline by the Maumelle Police Department," Bryant said. "It illustrates the importance of a teamwork approach, beginning with the public, and working together with multiple law enforcement agencies to identify and arrest those individuals who prey on innocent children," Bryant said.
The investigation was conducted by the Little Rock Office of Homeland Security Investigations, the Arkansas State Police Crimes Against Children Division, and the Maumelle Police Department. The case was prosecuted by Assistant United States Attorney Kristin Bryant.