Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Wednesday 2 March 2016
Former County Chief Deputy Auditor Sentenced to 84 Months for Embezzling Government Funds, Tax Fraud and Wire FraudRead the Press Release
A former chief deputy auditor for LaPorte County, Indiana, was sentenced today to 84 months in prison for embezzling over $150,000 from the LaPorte County government, tax fraud and defrauding her father-in-law out of more than $600,000, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David A. Capp of the Northern District of Indiana.
Mary Ray, 68, of LaPorte, was also ordered to forfeit $137,249.59 and pay $801,315.66 in restitution as part of her sentence, which was imposed by U.S. District Judge Jon E. Deguilio of the Northern District of Indiana. On Sept. 17, 2015, Ray was convicted of two counts of theft of government monies, two counts of making false statements on a tax return and seven counts of wire fraud.
According to evidence presented at trial, from September 2011 through December 2012, while she served as chief deputy auditor for LaPorte County, Ray embezzled more than $150,000 from county coffers and underreported her income on her U.S. Individual Tax Returns by failing to report the embezzled funds. Evidence at trial also showed that Ray defrauded her father-in-law, an 86-year-old disabled veteran, out of more than $600,000 in funds that he entrusted her to oversee. The evidence also demonstrated that Ray used the illegally-obtained funds to gamble at casinos.
The FBI and Internal Revenue Service-Criminal Investigation investigated the case with assistance from the Indiana State Police, the LaPorte County Sheriff’s Department and the Indiana State Board of Accounts. Trial Attorney Peter Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Donald J. Schmid of the Northern District of Indiana prosecuted the case.
Former County Chief Deputy Auditor Sentenced to 84 Months for Embezzling Government Funds, Tax Fraud and Wire FraudRead the Press Release
WASHINGTON – A former chief deputy auditor for LaPorte County, Indiana, was sentenced today to 84 months in prison for embezzling over $150,000 from the LaPorte County government, tax fraud and defrauding her father-in-law out of more than $600,000, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David A. Capp of the Northern District of Indiana.
Mary Ray, 68, of LaPorte, was also ordered to forfeit $137,249.59 and pay $801,315.66 in restitution as part of her sentence, which was imposed by U.S. District Judge Jon E. Deguilio of the Northern District of Indiana. On Sept. 17, 2015, Ray was convicted of two counts of theft of government monies, two counts of making false statements on a tax return and seven counts of wire fraud.
According to evidence presented at trial, from September 2011 through December 2012, while she served as chief deputy auditor for LaPorte County, Ray embezzled more than $150,000 from county coffers and underreported her income on her U.S. Individual Tax Returns by failing to report the embezzled funds. Evidence at trial also showed that Ray defrauded her father-in-law, an 86-year-old disabled veteran, out of more than $600,000 in funds that he entrusted her to oversee. The evidence also demonstrated that Ray used the illegally-obtained funds to gamble at casinos.
The FBI and Internal Revenue Service-Criminal Investigation investigated the case with assistance from the Indiana State Police, the LaPorte County Sheriff’s Department and the Indiana State Board of Accounts. Trial Attorney Peter Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Donald J. Schmid of the Northern District of Indiana prosecuted the case.
# # #
16-244
Former Corrections Officer Sentenced for Unlawfully Trafficking “Suboxone”Read the Press Release
ALBUQUERQUE – Edward Owens, 21, of Santa Fe, N.M., was sentenced today in federal court in Albuquerque, N.M., to three years of probation for participating in a conspiracy to distribute Buprenorphine, more commonly known as “Suboxone,” in violation of the federal narcotics laws. At the time he committed the crime, Owens was employed as a corrections officer at the Santa Fe County Adult Correctional Facility.
Owens was arrested on Feb. 12, 2015, on an indictment charging him and codefendant James Barela, 41, of Santa Fe, with conspiracy and possession of Suboxone with intent to distribute. According to the indictment, Owens and Barela committed these crimes between Aug. 6, 2014 and Aug. 12, 2014, in Santa Fe County, N.M.
On Dec. 3, 2015, Owens pled guilty to the indictment and admitted that from Aug. 4, 2014 through Aug. 12, 2014, while he was employed as a corrections officer at the Santa Fe County Adult Correctional Facility, he agreed to bring contraband into the jail for Barela who was an inmate at the facility. Owens admitted that he agreed to smuggle 47 sublingual Suboxone strips into the jail in exchange for payment from Barela, but was apprehended while attempting to do so.
Barela pled guilty to participating in the Suboxone trafficking conspiracy on June 10, 2015, and admitted that from Aug. 4, 2014 through Aug. 12, 2014, while he was incarcerated he conspired with Owens to distribute Suboxone to inmates in the correctional facility. Barela was sentenced on Oct. 8, 2015, to 12 months and one day in federal prison followed by three years of supervised release.
This case was investigated by the Albuquerque office of the FBI, the Santa Fe County Sheriff’s Office, and the Santa Fe Corrections Department with assistance from the First Judicial District Attorney’s Office.
Assistant U.S. Attorney Shaheen P. Torgoley prosecuted the case pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative 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 trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Former Chief Executive Officer Sentenced to over Seven Years in Prison for Illegally Exporting Technology Equipment to China and Money LaunderingRead the Press Release
Louis Brothers, 63, of Covington, Kentucky, was sentenced to 93 months in prison for illegally exporting sophisticated technology equipment to the People’s Republic of China (PRC) and concealing the unlawful proceeds. The sentence also includes a monetary judgment of $1.1 million.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky, Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C. Office and Special Agent in Charge Howard Marshall of the FBI’s Louisville Division jointly made the announcement today.
U.S. District Judge Amul R. Thapar of the Eastern District of Kentucky sentenced Brothers for conspiracy, aiding and abetting in the illegal export of defense articles and conspiracy to launder funds.
Brothers, a former president and CEO of Valley Forge Composite Technologies, pleaded guilty to the offenses in July 2015. He admitted that from 2009 until 2013, he unlawfully exported microcircuits to the PRC. Under federal law, anyone exporting a defense article, including microcircuits, to the PRC must obtain the permission of the Department of State for the purposes of maintaining national security.
According to his plea agreement, Brothers intentionally avoided notifying the Department of State about his activity and labeled his shipments as “computer parts” in order to conceal the true identity of the items.
Brothers further admitted that he falsified paper work to make it appear that the proceeds he received from his business with the PRC were actually profits from a business he owned in Kentucky.
The investigation was conducted by the FBI and HSI. The case is being prosecuted by Assistant U.S. Attorney Robert McBride of the Eastern District of Kentucky and Trial Attorney Casey Arrowood of the National Security Division’s Counterintelligence and Export Control Section.
Former Chief Executive Officer Sentenced to over Seven Years in Prison for Illegally Exporting Technology Equipment to China and Money LaunderingRead the Press Release
WASHINGTON – Louis Brothers, 63, of Covington, Kentucky, was sentenced to 93 months in prison for illegally exporting sophisticated technology equipment to the People’s Republic of China (PRC) and concealing the unlawful proceeds. The sentence also includes a monetary judgment of $1.1 million. Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky, Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C. Office and Special Agent in Charge Howard Marshall of the FBI’s Louisville Division jointly made the announcement today. U.S. District Judge Amul R. Thapar of the Eastern District of Kentucky sentenced Brothers for conspiracy, aiding and abetting in the illegal export of defense articles and conspiracy to launder funds. Brothers, a former president and CEO of Valley Forge Composite Technologies, pleaded guilty to the offenses in July 2015. He admitted that from 2009 until 2013, he unlawfully exported microcircuits to the PRC. Under federal law, anyone exporting a defense article, including microcircuits, to the PRC must obtain the permission of the Department of State for the purposes of maintaining national security. According to his plea agreement, Brothers intentionally avoided notifying the Department of State about his activity and labeled his shipments as “computer parts” in order to conceal the true identity of the items. Brothers further admitted that he falsified paper work to make it appear that the proceeds he received from his business with the PRC were actually profits from a business he owned in Kentucky. The investigation was conducted by the FBI and HSI. The case is being prosecuted by Assistant U.S. Attorney Robert McBride of the Eastern District of Kentucky and Trial Attorney Casey Arrowood of the National Security Division’s Counterintelligence and Export Control Section.
Florida Man Pleads Guilty to Tax ChargeRead the Press Release
ROANOKE, VIRGINIA – A Miami, Florida man, who prepared false tax returns for others without their consent, pled guilty yesterday in the United States District Court for the Western District of Virginia in Roanoke, United States Attorney John P. Fishwick Jr. announced today.
Audrey Obin, 36, of Miami, Fla., pled guilty this afternoon to Count One, conspiracy to obtain refunds from the filing of false tax returns. Two co-conspirators, Agwell Fayette and Darold Daniels are awaiting trial.
According to evidence presented at yesterday’s guilty plea hearing by Assistant United States Attorney C. Patrick Hogeboom III, Obin owed Vision Tax Services, an income tax preparation service located in Florida. Vision Tax Services filed tax returns electronically and Advent Financial processed the refund payments.
On or about June 11, 2012, Obin prepared and filed a Form 1040 for the 2011 tax year for K.L. The returned included K.L.’s name and social security number but the address listed was not hers. K.L. did not file the return or authorize anyone to file the return on her behalf. K.L. said she never spoke to Obin nor provided him with any of the information needed to prepare a tax return. She did, however, provide personal identifiers to Agwel Fayette, who told K.L. the information would be used to assist her in obtaining public assistance.
Obin admitted that he never met K.L. but was provided the personal identifiers by Darold Daniels. Obin charged $700 to prepare the tax return and sent the refund check to Roanoke, Virginia where it was deposited into a bank account controlled by Fayette.
On or about March 22, 2012, a 2011 Form 1040 was prepared and filed by Obin in C.R.’s name. C.R. resided in Roanoke, Virginia, but provided his personal identifiers to Fayette with the understanding that it was for potential employment purposes. Daniels provided the information to Obin, which was used to file a false tax return claiming a refund of $1,782. The refund check, minus $700 for the preparation fee to Obin, was cashed at a convenience store operated by Fayette.
The investigation of the case was conducted by Internal Revenue Service and United States Postal Service. Assistant United States Attorney C. Patrick Hogeboom III will prosecute the case for the United States.
Felon in Possession of a Firearm Goes to PrisonRead the Press Release
A man with a prior felony and misdemeanor domestic abuse conviction was sentenced yesterday to nearly three years in federal prison.
Willie Hampton, age 56, from Cedar Rapids, Iowa, received the prison term after entering a guilty plea on December 2, 2015, to being a prohibited person in possession of a firearm. He was prohibited from possessing firearms because he had a previous felony drug conviction and a misdemeanor domestic abuse assault conviction.
At the guilty plea, Hampton admitted he was prohibited from possessing a firearm because of the two convictions. A .22 caliber revolver was found in his home after the police was alerted to its presence. At sentencing, it was pointed out that Hampton had criminal convictions covering three decades, including: drug offenses; assaults; interference with official acts; OWIs; driving while suspended/revoked/ barred; criminal mischief; and, false reporting. The court noted Hampton’s criminal history plus his threatening and aggressive manner toward others then sentenced him to the maximum allowed within the sentencing range.
Hampton was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. He was sentenced to 33 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Hampton is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Steve Young and investigated by Cedar Rapids Safe Streets Task Force. The task force is composed of representatives from the Federal Bureau of Investigation, United States Marshal Service, and the Cedar Rapids Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 14-CR-104.
Follow us on Twitter @USAO_NDIA.
Felon Charged with Illegally Possessing a FirearmRead the Press Release
PITTSBURGH - A resident of Pittsburgh has been indicted by a federal grand jury in Pittsburgh on a charge of possession of a firearm by a convicted felon, United States Attorney David J. Hickton announced today.
The one-count indictment, returned on March 1, named William C. Miller, 22, of Pittsburgh, Pa, as the sole defendant.
According to the indictment, Miller was found in possession of a firearm on or about Sept. 29, 2015, following four felony convictions in 2014. Federal law prohibits a person convicted of a crime punishable by in excess of one year imprisonment from possessing a firearm or ammunition.
The law provides for a maximum total sentence of not less than 15 years and up to life in prison, a fine of $250,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney Ryan K. Hart is prosecuting this case on behalf of the government.
This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crimes. The Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Pittsburgh Bureau of Police conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
East Texans Charged in Northeast Texas Opportunities, Inc. ConspiracyRead the Press Release
TEXARKANA, Texas - U.S. Attorney John M. Bales announced today that eleven individuals have been indicted on federal charges involving conspiracy to commit an offense and to defraud the U.S. government and theft of government property or money in the Eastern District of Texas.
The defendants were named in a three-count indictment returned by a federal grand jury on Feb. 17, 2016, charging them with conspiracy to commit an offense against and to defraud the U.S. government and theft of government property or money. These violations are alleged to have caused over $1.2 million in losses to a distributor of federal grant funds to the needy and elderly. Those charged are:
Cynthia Hillard Campbell, 54, of Mount Pleasant, Texas
Beverly Thomas Logan, 64, of Mount Vernon, Texas
Lana Bowie Dethrow, 58, of Honey Grove, Texas
Marco Antonio Alcaraz-Guerrero, 40, of Greenville, Texas
Paula Wallis Trantham, 50, of Winnsboro, Texas
Christy Lynn Shelby, 41, of Mount Vernon, Texas
Brenda McGill Fountain, 60, of Mount Vernon, Texas
Darlene Hargrave Hatcher, 61, of Mount Vernon, Texas
Karinda Anne Breaux, 52, of Mount Vernon, Texas
Pamela Powe Gossett, 61, of Pittsburg, Texas
Maria Delaluz Telles, 35, of Mount Vernon, TexasThe indictment was unsealed today after the defendants made initial appearances before U.S. Magistrate Judge Caroline Craven in the federal court in Texarkana.
Northeast Texas Opportunities, Inc. (NETO), headquartered in Mount Vernon, Texas, was a distributor of federal grant funds to the elderly and needy in an eight-county region. Those counties included: Delta, Franklin, Hopkins, Lamar, Morris, Rains, Red River, and Titus counties. NETO administered multiple programs, including Head Start Programs, Low-Income Energy Assistance Programs, Community Services Block Grant Programs, Title III Part-C Nutrition Services Programs, Nutrition Services Incentive Programs, and others. NETO received more than $3 million per year in federal funds from multiple agencies, including the U.S. Department of Transportation, U.S. Department of Health and Human Services, U.S. Office of Management and Budget (through the Agency of Children and Families), and the U.S. Department of Agriculture.
According to the indictment, it is alleged that beginning in January 2011 and continuing until June 2015, NETO employees and contractors conspired to defraud NETO of money by writing checks drawn on NETO accounts that they would often split among themselves, and convert those funds to personal use. It is alleged that NETO employees would also create fraudulent invoices from vendors to support and conceal those unauthorized checks. It is also alleged that NETO employees would overpay vendors and then require kickbacks from the vendors. The indictment alleges that NETO employees also used NETO funds to pay personal debts or other personal benefits. Campbell, Logan, Dethrow, Alcaraz, Trantham, Shelby, Fountain, Hatcher, Breaux, and Telles were NETO employees, and Gossett was a contract nurse to NETO. NETO ceased operations and shut its doors on Aug. 31, 2015 due to financial insolvency, employee malfeasance, and stoppage of funding sources due to discoveries during an audit and the ongoing criminal investigation.
If convicted of conspiracy to commit an offense against or defraud the U.S. government, the defendants each face up to five years in federal prison. If convicted of theft of government property or money, the defendants each face up to 10 years in federal prison.
This case is being investigated by the Federal Bureau of Investigation with assistance from the Texas Rangers and the Franklin County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorney D. Ryan Locker.
An indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Conspirator in Counterfeit Credit Card Scheme Sentenced to Four Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Zachary O’Brien, age 31, of Bronx, New York, today to four years in prison, followed by four years of supervised release, for bank fraud conspiracy and aggravated identity theft arising from a scheme to use counterfeit credit cards to purchase merchandise.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to his plea, from February 2014, through October 2014, O’Brien conspired with his co-defendants, Jerry Anderson, Steven Harris, Marquis Johnson, and Steven Tejeda, as well as others, to use stolen credit card and other personal information of customers of victim financial institutions to purchase items, including Apple iPhones, at retail locations in Maryland and elsewhere.
For example, on April 10, 2014, the Baltimore County Police Department (BCPD) responded to a fraud in progress at an Apple Store in Towson, Maryland, where Johnson and Harris purchased iPhones with Visa Vanilla gift cards. Johnson and Harris were arrested and the Visa Vanilla gift cards they used to purchase the phones were recovered and determined to be re-encoded with stolen credit information. A search of Harris’ phone revealed multiple texts between Harris and Anderson. Investigation determined that Anderson had supplied the re-encoded cards used by, or recovered from, Harris and Johnson.
On April 17, 2014, a search warrant was executed at Anderson’s home in Towson. Several items were recovered including: five Blackberry cell phones; two Apple iPhones; two apple iPads; an Apple computer; a shipping box and packaging for a credit card embossing machine; and miscellaneous gift cards. Anderson was at the residence at the time the search warrant was executed and a room keycard for a nearby hotel was recovered from his wallet. Later that day, a search warrant was executed at the hotel room. O’Brien and Tejeda were in the room when the search warrant was executed. The items recovered from the hotel room included: 30 counterfeit credit cards (re-encoded with stolen credit information); three Apple iPhone 5s; 43 blank counterfeit credit cards; eight pre-paid gift cards (unopened/in packaging); a credit card embossing machine; an Acer laptop computer; a credit card encoder; and over 50 credit cards embossed with the names of either O’Brien, Anderson, or Tejeda.
Forensic examinations of the computers and other digital media seized during the searches recovered emails containing personal identifying information (PII) of victims, including name, date of birth, and social security number; compromised bank credit card numbers and corresponding customers’ names; and a document containing over 25 credit card numbers and other PII. Further examination of records recovered during forensic examinations revealed that at least two of the credit card numbers were purchased from a known “carding site” where perpetrators of identity theft and related crimes can purchase stolen credit card numbers and other PII.
O’Brien admitted that he had traveled from New York City to the motel room, where Anderson brought him the laptop and “credit card machine.” Several counterfeit credit cards were made and distributed to people in the motel room, including O’Brien, and used to buy high end consumer electronics, which were then resold in New York.
The total actual loss resulting from the conspiracy which operated from at least February to October 2014 was $419,807.14, and the potential loss was over $1.8 million. The conspiracy involved over 250 victims.
Ronnie Mejia, age 26, of Bronx, New York; Marquis Johnson, age 21, of Severna Park, Maryland; and Jerry Anderson, age 29, of Towson, have pleaded guilty to their roles in the scheme. All are awaiting sentencing.
Steven Tejeda, age 23, of Richmond, Virginia, and Steven Harris, age 23, both of Bronx, New York; also pleaded guilty and were each sentenced to four years in prison.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Secret Service, Baltimore County Police Department, and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Ayn B. Ducao and Zachary A. Myers, who are prosecuting the case.
Columbus Man Pleads Guilty to Producing Child Pornography Involving Three Young ChildrenRead the Press Release
ALBUQUERQUE – Samuel Elliott, 32, of Columbus, N.M., pleaded guilty today in federal court in Las Cruces, N.M., to producing child pornography involving three young children and possessing child pornography. Elliott entered his guilty plea under a plea agreement that permits him to appeal from a court order denying his motion to suppress evidence. Elliot will be permitted to withdraw his guilty plea if he prevails on his appeal.
Elliott’s guilty plea was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, Tex., New Mexico State Police Chief Pete N. Kassetas and Las Cruces Police Chief Jaime Montoya.
Elliott was arrested on Nov. 21, 2014, on an eight-count indictment charging him with production and possession of child pornography. Counts 1 through 3 of the indictment alleged that between Dec. 2012 and July 2013, Elliott used three young children to engage in sexually explicit conduct for the purpose of producing visual depictions of such conduct. According to the indictment, two of the children were between one and five years of age and the third child was over the age of five years. The remaining five counts alleged that Elliott possessed child pornography in July 2013. The indictment asserted that Elliott committed all eight crimes in Luna County, N.M. A superseding indictment alleging the same charges was filed in July 2015.
“By his own admission, Samuel Elliott violated three young children and produced images and videos memorializing their abuse, stripping them of their innocence and forever tarnishing their childhood,” said U.S. Attorney Damon P. Martinez. “The physical, emotional, and psychological harm children suffer from sexual abuse and sexual exploitation through molestation and the production of child pornography is well known. This case is no different. The tremendous harm these young victims have suffered at the hands of Elliott will significantly impact them for the rest of their lives. I commend Homeland Security Investigations, the New Mexico State Police and Las Cruces Police Department for devoting tremendous time and energy to an investigation that exposed this despicable behavior and holding Elliott accountable for preying on these innocent children.”
HSI Special Agent in Charge Waldemar Rodriguez said individuals who produce child pornography scar children – psychologically, physically and emotionally – for life. And child predators who trade those images, victimize children again and again. “Child exploitation is a heinous crime,” said Rodriguez. “But rest assured that HSI special agents together with our law enforcement partners stand firm in our commitment to investigate and prosecute child predators to the fullest extent of the law.”
During today’s change of plea hearing, Elliott pled guilty to all eight counts of the indictment. In his plea agreement, Elliott admitted using a video camera to record a video of himself engaging in sexually explicit conduct with a child between one and five years of age. Elliott also admitted using a video camera to produce sexually explicit visual depictions of a sleeping child between five and eleven years of age. Elliott admitted committing these two crimes between Dec. 2012 and July 2013. Elliott also admitted that on Dec. 10, 2012, he used his iPhone to produce sexually explicit depictions of a third child who was between one and five years of age.
In his plea agreement, Elliott also acknowledged that in July 2013, the New Mexico State Police executed a search warrant at his residence and seized his iPhone, two desktop computers and a hard-drive. He also acknowledged that HSI executed a search warrant on his Dropbox online storage account. Elliott acknowledged that forensic examinations recovered thousands of images of child pornography from his iPhone; 48 images of child pornography from his hard-drive, more than 900 images of child pornography from his desktop computers, and 72 videos of child pornography from his Dropbox online storage account.
Elliott has been in custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Elliott faces a prison term of not less than 15 years and not more than 30 years on each of the three production of child pornography charges. He faces up to 20 years in prison on each of the five possession of child pornography charges. Elliott will have to serve at least five years of supervised release after completing his prison sentence. He also will be required to register as a sex offender.
In his plea agreement, Elliott agreed to pay $210,012 in restitution to each of the three victims associated with the three production of child pornography charges if they request restitution prior to sentencing. He also agreed to pay restitution of $25,000 to each victim associated with the five possession of child pornography charges who requests restitution prior to sentencing.
“This case is a great example of agencies working together to keep kids safe,” said New Mexico State Police Chief Pete Kassetas. “We will do whatever it takes to locate and apprehend child sexual predators!”
“Our computer forensics investigator spent a considerable amount of time delving into electronic files and recovering vital evidence,” said Las Cruces Police Chief Jaime Montoya. “This is a tremendous example of multiple law enforcement agencies working together to uncover evidence that helped build a strong case and ultimately led to today’s guilty plea.”
This case was investigated by the Las Cruces office of Homeland Security Investigations, the New Mexico State Police and the Las Cruces Police Department, all of which are members of the New Mexico Internet Crimes Against Children (ICAC) Task Force.
The case is being prosecuted by Assistant U.S. Attorney Alexander B. Shapiro of the U.S. Attorney’s Las Cruces Branch Office as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.
The case also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 82 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the NMOAG. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Chicago Police Officer Sentenced to Two Years in Prison for Using Excessive Force Against a Handcuffed Store ClerkRead the Press Release
CHICAGO — A Chicago Police officer was sentenced today to two years in federal prison for using excessive force against an employee of a Southeast Side convenience store.
A store surveillance camera captured ALDO BROWN punching and kicking the clerk on Sept. 27, 2012. BROWN had entered the store while on duty and without a search warrant, and proceeded to interrogate the victim about whether he possessed narcotics or weapons. Brown punched the victim’s face, causing him to stumble backwards into a cooler. Brown later kicked the victim in his ribs while he was handcuffed and lying on the ground.
A federal jury last year convicted Brown, 39, of Chicago, on one count of using excessive force. U.S. District Judge Virginia M. Kendall imposed the 24-month sentence in federal court in Chicago.
“Even apart from the physical pain inflicted, defendant’s conduct has significant ramifications for the criminal justice system,” Assistant U.S. Attorney Jessica Romero argued in the government’s sentencing memorandum. “Sworn law enforcement officers are held to a higher standard of conduct, not merely because of the authority that they enjoy, but because society relies on their trustworthiness, their honor, and their integrity in upholding and enforcing the laws that protect the community.”
Evidence at trial revealed that the victim was compliant with Brown’s instructions and did not resist. Brown can be seen on the video placing the victim in handcuffs and forcing him to lie on the floor. After removing a gun from the victim’s back pocket, Brown kicked the victim in his ribs.
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 Ms. Romero and Assistant U.S. Attorney Lindsay Jenkins.
Chicago Man Found Guilty of Conspiring to Distribute Heroin and Fentanyl That Caused Multiple Deaths and OverdosesRead the Press Release
A man who conspired to distribute heroin, fentanyl, and crack cocaine that led to several overdoses and deaths was convicted by a jury today, after a 6-day trial in federal court in Cedar Rapids.
Max Julian Wright, age 35, from Chicago, Illinois, was convicted of two counts of distribution of fentanyl and one count of conspiring to distribute heroin, crack cocaine, and fentanyl that resulted in six serious bodily injuries and two deaths. The verdict was returned this afternoon following about 3 ½ hours of jury deliberations.
The evidence at trial showed that, between about 2013 and June 2015, Wright brought large quantities of heroin, fentanyl, and crack cocaine from Chicago to Cedar Rapids. Wright and other individuals, including DeShaun Anderson and Marcus Wallace, sold the drugs to various users in Cedar Rapids. Fentanyl is a synthetic opiate similar to heroin, but many times more potent than heroin. Witness testimony showed that by at least late 2014, the potency of the heroin being sold by Wright and Anderson increased, which led to at least six individuals immediately overdosing on the drugs. Testimony showed the users who overdosed lost consciousness nearly immediately after using the drugs, and had severely reduced breathing function due to the effects of the opiate drugs. One of the injured victims died two days later from the injuries sustained from using the drugs. Another victim died in early April of a mixed-drug overdose that included a toxic level of fentanyl in the victim’s blood. All of the deaths and overdose injuries found by the jury occurred between late February and mid-May of 2015.
The jury also found that Wright twice distributed fentanyl during controlled transactions conducted by police in May and June 2015. Evidence at trial showed the fentanyl was sold to a heroin customer of Wright’s, and that at the time the customer and the police believed the substance was heroin.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Wright remains in the custody of the United States Marshal pending sentencing. Wright faces a mandatory minimum sentence of life imprisonment, a $12,000,000 fine, $300 in special assessments, and a lifetime term of supervised release if he were released from prison.
The case was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of the Cedar Rapids Police Department and the Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Cedar Rapids Police Department; the Linn County Sheriff's Office; the Marion Police Department; the Iowa City Police Department; and the Iowa Division of Narcotics Enforcement, and the Linn County Medical Examiner’s Office, and prosecuted by Assistant United States Attorneys Dan Chatham and Patrick Reinert.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-00046-LRR.
Follow us on Twitter @USAO_NDIA.
Cheektowaga Woman Sentenced on Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Ashley Marie Gnocchini, 29, of Cheektowaga, NY, who was convicted of conspiracy to possess with intent to distribute cocaine, was sentenced to 15 months in prison by U.S. District Judge Elizabeth Wolford.
Assistant U.S. Attorney Mary Catherine Baumgarten, who handled the case, stated that on November 15, 2010, law enforcement officers searched the residence of Ricky Lee Pyzikiewicz on Maurice Street in Buffalo. Officers seized baggies later determined to contain cocaine and marijuana as well as a rifle and ammunition. The search was part of an ongoing criminal investigation into narcotics trafficking by Pyzikiewicz and Gnocchini.
During the morning hours of November 15, 2010, officers set up an undercover purchase with the defendants. As Pyzikiewicz and Gnocchini drove to the area of Milestrip Road and McKinley Parkway in Hamburg, NY, Orchard Park, NY police officers pulled over a gray Saturn Ion the two were riding in. Pyzikiewicz appeared to hide something under his seat. A Hamburg Police Department canine unit responded to the scene, and the ensuing canine sniff was positive for the presence of narcotics. A subsequent search was conducted and quantities of cocaine were recovered.
The sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction Special Agent in Charge Delano A. Reid, the Orchard Park Police Department, under the direction of Chief Mark Pacholec, and the Hamburg Police Department, under the direction of Chief Gregory Wickett.
Ricky Lee Pyzikiewicz was convicted of conspiracy to possess with intent to distribute and to distribute cocaine and being felon in possession of a firearm and is scheduled to be sentenced by Judge Wolford on May 4, 2016 at 10:00 a.m.
California Man Sentenced to Prison for Federal Drug Trafficking Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Phillip Tracy Rodgers, Sr., 61, of Long Beach, Calif., was sentenced this morning in federal court in Las Cruces, N.M., to 33 months in prison followed by two years of supervised release for his drug trafficking conviction.
Rodgers was arrested on Sept. 4, 2014, on a criminal complaint charging him with unlawfully possessing chemicals that could be used to manufacture a controlled substance. Rodgers was arrested by U.S. Border Patrol and DEA agents at the Border Patrol Checkpoint on I-10 in Las Cruces, after agents discovered that Rodgers was concealing gasoline canisters of chemicals used in the manufacture of PCP and methamphetamine. More specifically, Rodgers possessed 42 gallons of Diethyl Ether, ten gallons of Bromobenzene and five gallons of Cyclohexanone.
Rodgers was subsequently indicted on Dec. 10, 2014, and charged with possession of diethyl ether, while knowing that the chemical would be used to manufacture PCP. On April 28, 2015, Rodgers pled guilty to the indictment and admitted that on Sept. 4, 2014, he was in possession of 13 five-gallon gasoline containers containing Diethyl Ether, Bromobenzene, and Cyclohexanone when he was stopped at the U.S. Border Patrol checkpoint on I-10 in New Mexico. Rodgers admitted that he was transporting the chemicals from San Antonio, Texas, to Los Angeles, Calif., where he expected to be paid for delivering the chemicals.
This case was investigated by the Las Cruces office of the DEA and the Las Cruces Station of the U.S. Border Patrol. Assistant U.S. Attorney Anna R. Wright of the U.S. Attorney’s Las Cruces Branch Office prosecuted the case.
Buffalo Woman Admits Role in Murder in Connection with Rico Conspiracy ConvictionRead 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 Alexis Mills, 23, of Buffalo, NY, pleaded guilty to RICO conspiracy before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of life in prison and a $250,000 fine.“This case presents a version of the ‘black widow’ crime scenario occasionally seen by law enforcement,” said U.S. Attorney Hochul. “The defendant, taking advantage of a prior intimate relationship with the victim, induced the victim to open a locked door, allowing an accomplice to enter the premises and execute the victim.”
Assistant U.S. Attorney Thomas S. Duszkiewicz, who is handling the case, stated that the defendant was a member and associate of the LRGP Gang which operated primarily in the area of Lombard, Rother, Playter and Gibson Streets in the City of Buffalo. The gang is alleged to be an organization engaged in violent criminal activity, including the distribution of cocaine and crack cocaine and the use of firearms.
Between 2009 and January 23, 2012, the defendant conspired with others, including LRGP leader Dewayne Gray, to distribute crack cocaine. Mills also assisted Gray by managing 42 Memorial Drive in Buffalo which was used by the gang and Gray as a distribution point.In April 2011, the defendant and others, while at 318 Sobieski Street in Buffalo, agreed that a member of the Cold Springs Gang, a rival criminal organization, should be murdered in retaliation for the killing of Dewayne Gray's brother, Alonzo Scott, in March 2011. The individuals settled upon killing Amir Chambers, whom they believed to be associated with the Cold Springs Gang.
After a failed attempt to poison Amir Chambers, it was agreed that Chambers would be killed by shooting him. On April 20, 2011, Mills arranged to meet Amir Chambers at a residence at 111 Mills Street in Buffalo, taking advantage of a prior intimate relationship she had with him. Mills was accompanied by a co-defendant, who was to kill the victim once the victim allowed Mills inside the residence. As planned by Mills and the co-defendant, Chambers opened the residence door upon seeing the defendant, at which time the co-defendant killed Chambers by shooting him in the head. Mills, for her part, kicked the victim in the head following the shooting to ensure that Chambers was in fact deceased.
U.S. Attorney Hochul further stated “This case also shows precisely why this Office continues to target street gangs and narcotics trafficking organizations. Fortunately, with this conviction, one less gang member is now able to walk the streets of Buffalo.”
The plea is the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent in Charge Adam S. Cohen, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Office and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Sentencing is scheduled for July 14, 2016 at 12:30 p.m. before Judge Arcara.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Basehor Business Owner Pleads Guilty to Not Paying Employment TaxesRead the Press Release
TOPEKA, KAN. - A woman who owned a home health care business in Basehor, Kan., pleaded guilty Wednesday to failing to pay more than $856,000 in federal taxes, U.S. Attorney Barry Grissom said.
Elizabeth Lucero, 53, Basehor, Kan., pleaded guilty to one count of willful failure to collect or pay over employment tax. In her plea, she admitted the crime occurred while she owned Sunshine Home Health Care in Basehor. The company had 65 to 70 employees and 1,400 patients.
From 2007 to 2011, Lucero’s company withheld payments from employee’s paychecks including federal income taxes, Medicare and Social Security taxes. Even though the company was growing and profitable, it made no payments to the Internal Revenue Service as required. Furthermore, against her accountant’s advice, Lucero had the company pay for hundreds of thousands of dollars of her personal expenses, including cash withdrawals at casinos for gambling and a $50,000 Cadillac Escalade.
In her plea, Lucero agreed to pay restitution of $856,784.
Sentencing will be set for a later time. She faces a maximum penalty of five years in federal prison and a fine up to $250,000. Grissom commended the Internal Revenue Service and Assistant U.S. Attorney Jabari Wamble for their work on the case.
Avon Property Developer Pleads Guilty to Exposing Workers to Asbestos During Removal OperationsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Anastasios “Taso” Kolokouris, 32, of Avon, NY, pleaded guilty to violating the Clean Air Act asbestos work practice standards involving asbestos removal and disturbance before Chief U.S. District Judge Frank P. Geraci. The charge carries a maximum sentence of five years in prison and a $250,000 fine.
“Simply to save money, this defendant knowingly exposed untrained, temporary workers to asbestos – a highly dangerous substance long known to cause cancer,” said U.S. Attorney Hochul. “While all of us welcome re-development in our community, it is critical to the health and safety of employees, as well as to residents living in nearby neighborhoods, that proper removal guidelines be strictly followed. This Office will continue to prosecute those who put profit ahead of people in this important area of law.”
Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that the defendant was one of the owners of a warehouse located at 920 Exchange Street in Rochester. Acting on a complaint, an inspector from the New York State Department of Labor, Asbestos Control Bureau visited the Exchange Street warehouse on December 13, 2011. Upon arrival, the inspector observed people, including a 16 year old child, working in a large dumpster next to a loading dock. The inspector observed large quantities of white fibrous material, later confirmed to be asbestos, in and around the dumpster. He also noted that the people working in the dumpster did not have proper personal protective equipment, and that there was no asbestos warning signs on the dumpster.
The warehouse at 920 Exchange Street sits directly adjacent to residential homes on both the Exchange Street and Violetta Street sides, and there is a school bus stop directly outside its main gate.
When the Asbestos Control Bureau inspector made contact with the workers, they called Kolokouris to tell him about the inspection. However, the defendant told the workers not to speak with the inspector, and instead directed them to leave the area and lock the gate, which they did. While on site, however, the inspector took samples of the white fibrous material from in and around the dumpster. A lab later confirmed these samples to contain high levels of friable asbestos.
Criminal investigators from the United States Environmental Protection Agency (EPA) and the New York Department of Environmental Conservation (DEC) were notified and responded to secure the scene. A federal search warrant was obtained and federal and state agents entered the property wearing full containment suits. When agents entered the warehouse, they discovered over 90 bags of dry, friable asbestos inside the loading dock area. Agents also discovered evidence of unlawful abatement inside the warehouse involving asbestos contamination of more than 150,000 square feet. Agents took multiple samples from in and around the warehouse. These samples were analyzed by a lab, and they all tested positive for high levels of asbestos. Additional evidence located inside the warehouse connected Kolokouris to the illegal asbestos activities.
During the investigation, workers were interviewed and indicated that they knew Kolokouris from other odd jobs he had hired them to perform at other properties he is connected to. They reported that the defendant told them that he would pay cash to remove asbestos from the dumpster outside the warehouse because the container company would not remove the dumpster while it was full of asbestos. None of the workers that Kolokouris used were certified or trained to work with asbestos. They also confirmed that one of the workers was only 16 years old; and that Kolokouris had picked the child and his mother up from home and drove them to Rochester where he paid them to remove asbestos from the dumpster. Kolokouris never provided any of the workers with proper masks, protective suits, or other personal protective equipment. Instead Kolokouris only gave them simple dust masks.
In 1971, The United States Environmental Protection Agency designated asbestos as a hazardous air pollutant. There is well established scientific data documenting the harmful effects of asbestos. Exposure to asbestos can cause a debilitating lung disease called asbestosis; a rare cancer of the chest and abdominal lining called mesothelioma; and cancers of the lung, esophagus, stomach, colon, and other organs. Congress has found independently that "medical science has not established any minimum level of exposure to asbestos fibers which is considered safe to individuals exposed to fibers.”
The plea was the culmination of an investigation on the part of Special Agents of the U.S. Environmental Protection Agency - Criminal Investigation Division, under the direction of Special Agent-In-Charge Vernesa Jones-Allen, Investigators of the New York State Department of Environmental Conservation Police, BECI, under the direction of Captain John Burke, the New York State Department of Labor, Asbestos Control Bureau, under the direction of Eileen Franco, and Officers from the City of Rochester Police Department, under the direction of Chief Michael Ciminelli.
Sentencing has been set for June 1, 2016 at 3:30 p.m. before Judge Geraci.
Alexandria Man Sentenced to 5 Years for Receipt of Child PornographyRead the Press Release
ALEXANDRIA, Va. – Richard Robinson, 58, of Alexandria, was sentenced today to 60 months in prison and five years of supervised release for receipt of child pornography. Robinson was also ordered to register as a sex offender upon release from prison.
Robinson pleaded guilty on Dec. 7, 2015. According to court documents, from October 2010 to May 2015, Robinson used a peer-to-peer file sharing program to receive and collect child pornography videos and images, including videos of children as young as five years old being sexually abused. In total, Robinson’s child pornography collection included 326 images and 202 videos of children being sexually exploited, including images and videos depicting sadistic or masochistic conduct.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Washington, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema.
This case was investigated by HSI with assistance from the Northern Virginia Internet Crimes Against Children Task Force. Assistant U.S. Attorney Kellen S. Dwyer prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-329.
Tuesday 1 March 2016
Woman Pleads Guilty to Monroe County-Based Sex Trafficking ConspiracyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that a South Carolina woman who resided in the Stroudsburg area at the time of the offense, pleaded guilty today before U.S. District Court Judge Malachy E. Mannion in Scranton, to participating in a sex trafficking conspiracy in which young women were threatened, forced and coerced into engaging in prostitution in northeastern Pennsylvania.
According to United States Attorney Peter Smith, the defendant, Selena Bayer-Davis, age 21, admitted to conspiring with others to commit sex trafficking crimes between 2012 and 2014.
Bayer-Davis was indicted along with six other people by a federal grand jury in Scranton in September 2015, as a result of an investigation by the Federal Bureau of Investigation, the Pennsylvania State Police, Maine State Police, the Monroe County District Attorney’s Office, and local police in Monroe County.
The indictment alleges that Bayer-Davis and her co-defendants joined and participated in a street gang known as the Black P-Stones that male gang members were “beaten-in” to the gang and female members were “sexed-in” to the gang.
The indictment further alleges that some females were “sexed-in” to the gang by being forced to engage in sex with male gang members; recruited and coerced to engage in prostitution; advertised as adult escorts on a website; provided with heroin and other drugs; and placed in various are hotels/motels to work as prostitutes. Bayer-Davis admitted that she and others used threats, force, and intimidation to coerce females to engage in prostitution.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Bayer-Davis faces a mandatory minimum sentence of 15-years in prison and a possible life sentence for her participation in the sex trafficking of others.
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."
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
United States Sues Iowa CAFO and its Owner for Alleged Clean Water Act Violations, including Discharging Manure into a Water of the United StatesRead the Press Release
Meadowvale Dairy, LLC (Meadowvale), and its owner, Sjerp Ysselstein, have been sued by the United States on four counts of alleged Clean Water Act violations. The claims are contained in a Civil Complaint filed on February 26, 2016, in United States District Court in Sioux City. The Complaint alleges that Ysselstein operates Meadowvale, which has concentrated animal feeding operations (CAFOs) near Rock Valley.
The Complaint alleges that Meadowvale Dairy, LLC owns and operates two National Pollutant Discharge Elimination System (NPDES) permitted, interconnected CAFOs as part of a dairy operation with a combined total of approximately 10,000 head of cattle on a combined 185 acres in northwestern Iowa.
On June 19, 2014, the Iowa Department of Natural Resources (State) conducted an inspection at one of Meadowvale’s CAFOs and observed manure and process wastewater spilling over the walls of a concrete bunker used to store manure. The manure and process wastewater then discharged into an unnamed tributary of the Big Sioux River.
Other discharges into a tributary of the Big Sioux River occurred on July 21, 2014, and July 22, 2014. Specifically, on July 21, 2014, the State received reports of an unauthorized discharge into a tributary of the Big Sioux River. Then, on July 22, 2014, the State observed manure laden process wastewater flowing into the same tributary. The State sampled the tributary at four downstream locations, and the results at all four locations showed elevated levels of Escherichia coli (E.coli), a pathogen found in manure and process wastewater.
The Complaint also alleges that Meadowvale failed to comply with certain requirements of its NPDES-permit, namely, maintaining depth-markers or emptying settled open feedlot effluent basins (SOFEBs). SOFEBs store solids and wastewater to prevent the discharge of these pollutants into surrounding waters.
Since 2001, the State has issued 12 notice-of-violations to Meadowvale for violations of its permit, including repeated failures to maintain adequate storage capacity in the facilities’ SOFEBs. The State has reported discharges from the facilities into waters of the United States on at least five separate occasions with high levels of E.coli, fecal coliform, ammonia, biochemical oxygen demand (BOD) and total suspended solids (TSS). Meadowvale’s unauthorized discharges have resulted in three penalty actions by the State in 2003, 2005 and 2010. On at least two separate dates, Meadowvale’s discharges also resulted in reported fish kills.
In the Complaint, the United States seeks civil penalties and injunctive relief. A trial date has not been set.
As with any civil case, a Complaint is merely an allegation and a defendant is presumed not liable until shown otherwise.
The case is being handled by Zachary N. Moor, Trial Attorney for the Environmental Enforcement Section of the Environment and Natural Resources Division, Christopher Muehlberger, Attorney, Office of Regional Counsel, United States Environmental Protection Agency Region 7, and Assistant United States Attorney Timothy L. Vavricek. The case was investigated by the Environmental Protection Agency.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 5:16-cv-4016-LTS.
Follow us on Twitter @USAO_NDIA.
United States Attorney’s Office announces creation of the Women’s Leadership Initiative, 2016Read the Press Release
Indianapolis – United States Attorney Josh J. Minkler, announced the creation of a Women’s Leadership Initiative today that will bring together employees of the United States Attorney’s Office, the Indiana Federal Community Defenders, the U.S. District Court, and federal investigative agencies to encourage a spirit of leadership through bi-monthly presentations aimed at enriching the skills these public servants bring to bear. Minkler is pleased to welcome several distinguished guest speakers who have been invited to share personal insight about the value of mentor/mentee relationships, professionalism, leadership, the art of a balanced life, and effective communication, among other topical discussions.
Speakers include:
-
The Honorable Sarah Evans Barker, U.S. District Court, SDIN
-
The Honorable Tanya Walton Pratt, U.S. District Court, SDIN
-
The Honorable Jane Magnus Stinson, U.S. District Court, SDIN
-
John Pistole, President of Anderson University, formerly employed as the Executive Director of TSA and the Deputy Director of the FBI
The Women’s Leadership Initiative is managed and directed by a steering committee comprised of female assistant U.S. attorneys and support staff. Its members unanimously agreed to devote a significant portion of their collective time together to continue serving the community at large. To this end, in January the members donated cold medicine and cellular telephones to the Julian Center and travel-size amenities to the Centers of Hope—organizations found within hospitals that offer solace and treatment to victims of sexual assault. At the March meeting, members will be invited to attend a human trafficking workshop in Fishers, Indiana. The Women’s Leadership Initiative members are also excited to “RAISE THE BAR” in April 2016, in celebration of National Volunteer Month, when its members will participate in the following community service outreach efforts:
April 6, 13, 20, 27, 2016: Art with a Heart, Mentor/Mentee Program at Daniel Webster Elementary School, IPS #46
April 20: Gleaners Food Bank
April 28: Southeast Side Community Organization Park Clean-Up.
Minkler encourages Women’s Leadership Initiative members to continue acting as catalysts for good and challenges the legal community and community at large to continue “RAISING THE BAR” in Indianapolis, Indiana.
-
USP Hazelton inmate charged with causing death of fellow prisonerRead the Press Release
CLARKSBURG, WEST VIRGINIA – A federal grand jury returned an indictment today charging Marricco Sykes, 36, an inmate at the United States Penitentiary at Hazelton, with causing the death of a fellow prisoner, United States Attorney William J. Ihlenfeld, II, announced.
Sykes is alleged to have strangled the fellow prisoner during a physical altercation in late 2015. Following an investigation by the Federal Bureau of Investigation and the USP Hazelton Special Investigative Services Unit, Sykes is charged with one count of “First Degree Murder.” He faces life imprisonment or the death penalty as well as a fine of up to $250,000.
The grand jury also returned indictments charging several other federal inmates within the Northern District of West Virginia with offenses including illegal threats, assault, and unlawful possession of weapons.
Jeremy E. Smith, 36, an inmate at the United States Penitentiary at Hazelton, is alleged to have written letters threatening to use explosives to destroy government buildings in Philadelphia, New York, Chicago, Boston and Washington, D.C. He is further alleged to have written a letter threatening the lives of President Barack Obama and former Secretary of State Hilary Clinton. Following an investigation by the United States Secret Service and the USP Hazelton Special Investigative Services Unit, Smith is charged with one count of “Threat to Damage Buildings by Use of Explosives” for which he faces up to 10 years in prison. He is further charged with one count of “Threats Against the President,” and one count of “Threats Against Member of Immediate Family of Former President.” He faces up to five years in prison on each of these counts. He also faces a fine of up to $250,000 on each of the three counts.
Antonio Lee, 33, an inmate at the Federal Correctional Institution at Hazelton, was allegedly discovered inside the prison in unlawful possession of a handcrafted weapon made from sharpened plastic. Following an investigation by the Federal Bureau of Prisons and the FCI Hazelton Special Investigative Services Unit, Lee is charged with one count of “Possession of Contraband in Prison – Weapon.” He faces up to five years in prison and a fine of up to $250,000.
Arnaldo Martinez-Gomez, 30, an inmate at the United States Penitentiary at Hazelton, is alleged to have assaulted a fellow prison during a physical altercation. Following an investigation by the Federal Bureau of Prisons and the USP Hazelton Special Investigative Services Unit, Gomez is charged with one count of “Assault with a Dangerous Weapon with Intent to Cause Bodily Harm,” and one count of “Possession of a Prohibited Object – Weapon.” He faces up to 10 years in prison on the assault charge and up to five years in prison on the prohibited object charge. He also faces a fine of up to $250,000 on each of the two counts.
Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant U.S. Attorney Sarah Montoro is prosecuting Smith, Assistant U.S. Attorney David Perri is prosecuting Lee, and Assistant U.S. Attorney Andrew Cogar is prosecuting Gomez and Sykes on behalf of the government.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Ortiz Conducts Review of Disability Access to Polls on Super TuesdayRead the Press Release
BOSTON – United States Attorney Carmen M. Ortiz announced today that her office’s Civil Rights Unit conducted a review of all polling locations in Lawrence and Barnstable to determine whether the polls are being operated in compliance with the Americans with Disabilities Act of 1990 (ADA).
“Our constitution gives Americans the right to vote, but that right is meaningless if there are physical barriers that prevent people from casting their ballot,” said U.S. Attorney Ortiz. “Disability rights have been a major focus of my office’s civil rights work in recent years, and my office will continue to vigorously ensure compliance with the ADA in Massachusetts.”
The U.S. Attorney’s Office selected these locations for review to ensure that they are accessible to the large numbers of residents who are expected to vote at these polling locations during the Presidential primary election on Super Tuesday. In a study following the previous Presidential election, the Government Accountability Office found that only 27% of polling places had no potential impediments to access by people with disabilities, meaning 73% of polling locations contained architectural barriers to voting. This initiative is being conducted in accordance with the Department of Justice’s statutory responsibility to review compliance with federal law and not in response to any specific complaint against any of the polling locations.
Federal law prohibits discrimination on the basis of disability by the owners and operators of places of public accommodation, including polling locations, and the right to participate in state and local government programs and services. The U.S. Attorney’s Office periodically undertakes ADA compliance reviews to ensure equal access for people with disabilities.
As part of its Super Tuesday ADA compliance review, attorneys, architects, and staff from the U.S. Attorney’s Office and the Department of Justice surveyed every polling place in Lawrence and Barnstable. If these site visits reveal that a particular polling location is not in compliance with the ADA, the U.S. Attorney’s Office will notify the appropriate state and local official of the violation and will provide a timeframe to correct the issue(s). The goal is to ensure that all polling locations are fully compliant in time for the Presidential election on Nov. 8, 2016.
The Civil Rights Unit of the U.S. Attorney’s Office was established in 2015 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, please visit www.justice.gov/usao-ma/civil-rights.
Two Sentenced in Identity Theft SchemeRead the Press Release
HOUSTON – Two men have been ordered to federal prison following their convictions in a scheme in which they used stolen personal information to purchase several high end vehicles in the Houston area, announced U.S. Attorney Kenneth Magidson.
Joel Cruz, 28, of Houston, and Darrion Wells, 27, of Beaumont, both pleaded to conspiracy to commit wire fraud and aggravated identity theft on May 28, 2015, and June 12, 2015, respectively.
Today, U.S. District Judge Nancy F. Atlas, who accepted the pleas, handed each man a sentence of 24 months for the conspiracy as well as an additional 24 months for the aggravate identity theft which must be served consecutively for a total of 48 months in federal prison. They were further ordered to pay $485,136.62 in restitution and must serve three years of supervised release following their release from prison.
Cruz and Ruffin, along with Devante Ruffin, 22, of Houston, have admitted they stole apartment complex leasing records to obtain the personal identifying information of the tenants. They then used that stolen information to make false driver’s licenses and other means of identification. Using that identification, they applied for loans to purchase high end automobiles at car dealerships in the Houston area.
The defendants took possession of the cars but never made payments on the fraudulently obtained loans. In total, the evidence demonstrated that they purchased 12 cars in this manner valued at approximately $480,000.
Cruz and Wells will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. Ruffin, also in custody, is scheduled to be sentenced May 3, 2016.
The charges are the result of an investigation conducted by the U.S. Postal Inspection Service and the Houston Police Department. Assistant U.S. Attorney Jay Hileman is prosecuting the case.
Sugar Grove Woman Pleads Guilty to Weapons ChargeRead the Press Release
ABINGDON, VIRGINIA – United States Attorney John P. Fishwick Jr. announced today the guilty plea of a Sugar Grove, Virginia woman on an illegal weapons charge.
Toby Anne Mock, 44, of Sugar Grove, Va., waived her right to be indicted and pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to a one count Information charging her with being a previously convicted felon illegally in possession of firearm.
“Keeping prohibited persons from possessing illegal firearms is a priority for this United States Attorney’s Office,” United States Attorney John P. Fishwick Jr. said today. “Keeping communities safe from violence starts with keeping illegal firearms off the streets, even if we have to do that one gun at a time.”
The investigation of the case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Special Assistant United States Attorney Kathleen Carnell is prosecuting the case for the United States.
Stockton Bank Robber Sentenced to over 15 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Phillip Dale Selfa, 63, of Stockton, was sentenced today to 15 years and eight months in prison for six counts of bank robbery, United States Attorney Benjamin B. Wagner announced.
On July 7, 2015, Selfa pleaded guilty to robbing the following banks:
-
December 27, 2010, Bank of Stockton in Pine Grove for $2,000;
-
January 13, 2011, Bank of the West in Lockeford for $4,000;
-
February, 25, 2011, Farmers and Merchants Bank in Linden for $351;
-
March 30, 2011, Westamerica Bank in Turlock, CA for $4,500;
-
April 29, 2011, Bank of the West in Ripon for $3,050, and
-
May 5, 2011, Bank of the West in Lodi for $4,037.
In each of his six robberies, Selfa carried boxes, bags, and satchels into the financial institutions. He also displayed a purported detonator during his robberies and claimed to bank personnel that he could set off explosives that were supposedly in his boxes and bags that he left in the banks as he exited. After each robbery, each bank was closed and streets neighboring the banks were barricaded for bomb squad personnel. The bombs and detonators were each determined to be fake. During his robberies, Selfa also wore various disguises and head coverings.
This case was the product of an investigation by the FBI with the assistance from the Stockton Police Department, the Modesto Police Department, the Amador County Sheriff’s Office, the San Joaquin County Sheriff’s Office, and the Stanislaus County Sheriff’s Office. Assistant U.S. Attorneys William Wong and Michelle Rodriguez prosecuted the case.
-
Stamford Podiatrist Who Submitted False Claims is SentencedRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that AMIRA MANTOURA, 53, of Greenwich, was sentenced yesterday by U.S. District Judge Michael P. Shea in Hartford to three years of probation, and a fine that will result in MANTOURA paying three times the amount of money she stole by submitting false claims to Medicare and other health insurance plans. MANTOURA also will be required to perform 200 hours of community service as part of her sentence.
On October 5, 2015, MANTOURA pleaded guilty to one count of making a false statement to the Medicare program.
According to court documents and statements made in court, MANTOURA, a Doctor of Podiatric Medicine, operates a podiatry practice at 95 Morgan Street in Stamford. As a podiatrist, she was fully aware and understood the procedure to perform a “nail avulsion” and she understood that a nail avulsion was a surgical procedure to treat an ingrown toenail. Between January 2009 and August 2013, MANTOURA knowingly submitted materially false claims to the Medicare program and to private insurance companies to obtain payment for a nail avulsion when she knew that she had not performed a nail avulsion. Rather than perform a nail avulsion, in most of these instances MANTOURA had merely provided her patients with routine foot care including clipping the patients’ toenails.
As a result of submitting false claims to the Medicare and Medicaid programs and private insurance companies, MANTOURA was paid approximately $206,000.
As part of her sentence, MANTOURA was required to pay approximately $64,000 in restitution to private health insurance plans. In a related civil settlement, MANTOURA paid $288,538.24 to the government in connection with her submission of false claims to the Medicare and Medicaid program, which was twice the amount of false claims MANTOURA submitted to those programs. As part of her sentence, MANTOURA was ordered to pay an additional $266,000 fine, which will result in MANTOURA paying a total of $618,000, or three times the amount she gained from her fraud.
MANTOURA is ordered to pay the restitution within seven days and to pay her fine within 90 days.
On October 1, 2015, MANTOURA was excluded from the Medicare program and will no longer be permitted to submit federal health care claims.
This matter was investigated by the U.S. Department of Health and Human Services, Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys David J. Sheldon and Anne F. Thidemann.
U.S. Attorney Daly encourages individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at (203) 777-6311 or. 1-800-HHS-TIPS.
St. Louis Joins Justice Department's Violence Reduction NetworkRead the Press Release
WASHINGTON – Deputy Attorney General Sally Q. Yates, Assistant Attorney General Karol V. Mason of the Office of Justice Programs (OJP) and United States Attorney Richard Callahan today announced that New Orleans, Louisiana; St. Louis, Missouri; and Milwaukee, Wisconsin, will join ten existing sites which have adopted crime-fighting strategies as part of the Violence Reduction Network (VRN). The initiative is a comprehensive approach to reducing violent crime that complements the Attorney General’s Smart on Crime Initiative and leverages existing Justice Department resources in communities around the country.
"It has been only a year-and-a-half since we launched the first Violence Reduction Network," said Deputy Attorney General Sally Quillian Yates. "In just that short period of time, the partnerships we have built through VRN have helped to reduce crime rates. These results could only have happened through the kind of creative collaboration promoted through the VRN."
Today’s announcement was made before an audience of U.S. Attorneys, police chiefs, local leaders from the new and existing VRN sites and department officials. Through VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Marshals Service, the Drug Enforcement Administration, the Executive Office of the United States Attorneys, the Office of Community Oriented Policing Services and the Office on Violence Against Women.
In 2014, VRN was launched in Camden, Chicago, Detroit, Wilmington, and Oakland and Richmond, California. In September 2015, VRN was expanded to Compton, California; Flint, Michigan; Little Rock and West Memphis, Arkansas; and Newark, New Jersey.
VRN’s core components include customized training and technical assistance; a strategic site liaison to guide the coordination of Justice Department resources; tools to enhance information sharing, including peer-to-peer exchanges; community practice collaboration among existing sites and an annual summit in September.
Shad Huston Sentenced for Corruption on the Rocky Boy's Indian ReservationRead the Press Release
GREAT FALLS - The United States Attorney’s Office announced that Shad James Huston, 40, of Havre, Montana, was sentenced on February 29, 2016, before U.S. District Judge Brian M. Morris. Huston was sentenced to 41 months of prison for Bribery, False Claims Act Conspiracy, and failure to file Currency Transaction Reports as required by law. In addition, the district court ordered Huston to pay $500,000 in restitution.
The Chippewa Cree Tribe of the Rocky Boy’s Indian Reservation is located in north-central Montana and has a population of 2,500 members. Between October 2007 and September 2012, the Chippewa Cree Tribe received $420,439,495 in federal funding. In addition, the Tribe received a $25,000,000 insurance payment after the flooding of 2010, and $8,400,000 under the Cobell v. Salazar settlement in July of 2012. The total money received by the Tribe, during this five-year time period, was over $450,000,000.
Huston became associated with a local trucking operation, known as K Bar K Trucking. While operating the company, Huston engaged in a “pay-to-play” scheme, where he was awarded no-bid, sole-source hauling contracts with the Tribe. In exchange for the contracts, Huston paid Tim Rosette, Director of the Roads Branch, cash kick-backs of $100 to $200 on a per truck, per trip basis. The financial records confirm this pattern, showing that Huston companies withdrew approximately $238,000 in cash, in close proximity to contract payments. When questioned by business partners, Huston explained he would falsely inflate invoices in order to pay bribes to Rosette, and others, in exchange for contracts with the Tribe. Rosette was previously sentenced to prison in December of 2015.
In addition to submitting false claims and bribing Tim Rosette, Huston also operated various businesses, including Leon’s Buy and Sell in Havre, Montana. These businesses were registered as Money Service Businesses with the Financial Crimes Enforcement Network (FinCEN), of the U.S. Department of Treasury. FinCEN’s mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.
In order for FinCEN to track money laundering and other fraud, Huston, as a money service business, was required to file Currency Transaction Reports (“CTRs”) when cashing checks for others in excess of $10,000. Huston cashed checks in excess of $10,000 for Hailey Belcourt, who was previously indicted and convicted for fraud, and other individuals implicated in fraud on the Rocky Boy’s Indian Reservation. All total, Huston cashed 19 checks that should have been reported, but were not. This failure to report the transactions was done with the deliberate intent to avoid exposing the transactions to FinCEN.
Huston’s convictions for corruption and failing to file CTRs is the latest in a series of prosecutions and convictions relating to public corruption, fraud, and theft in federal grants, contracts, and programs brought by the investigators and prosecutors of the U.S. Attorney’s Guardians Project, an anti-corruption strike force created in 2011. The Huston case was investigated by the Department of Interior Office of Inspector General and the Internal Revenue Service, Criminal Division.
San Francisco Resident Pleads Guilty to “Straw Hat Bandit” Bank RobberiesRead the Press Release
SAN FRANCISCO - Richard Laurence Stewart pleaded guilty today to robbing four San Francisco banks announced Acting United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge David J. Johnson. As part of the plea agreement, Stewart acknowledged his role in committing a string of additional bank robberies throughout San Francisco.
Stewart, 52, of San Francisco, was indicted on October 27, 2015, and charged with four counts of bank robbery or attempted bank robbery, in violation of 18 U.S.C. § 2113(a).
According to today’s plea agreement, Stewart admitted robbing San Francisco banks on May 12, 2015; May 13, 2015; October 14, 2015; and October 16, 2015. The agreement also describes Stewart’s robberies of an additional eight banks in San Francisco from October 27, 2014, through February 27, 2015.
According to papers filed by the government, the FBI was investigating the bank robberies of the so-called Straw Hat Bandit since October of 2014. The government documents describe the FBI’s investigation of the person who wore a number of different disguises during bank robberies. The disguises included glasses, hats, a black curly wig, a fake beard and mustache, and a single surgical glove. According to these documents, Stewart eventually was identified as the bandit after a witness saw him leaving the scene of one of the robberies in a taxicab. Stewart was arrested on October 18, 2015, after authorities linked him to the taxicab request.
Stewart faces a maximum sentence of 20 years’ imprisonment and $250,000 on each of the bank robbery counts. Further, additional terms of supervised release, penalties, and restitution may be ordered upon conviction. However, any sentence following this conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. Sentencing is scheduled to take place before the Honorable William Alsup on June 14, 2016.
The case is being prosecuted by Assistant U.S. Attorney Shailika Kotiya with the assistance of Patricia Mahoney. The prosecution is the result of an investigation by the FBI and the San Francisco Police Department.
San Antonio Doctor Found Guilty of Failure to Pay Withholding Taxes and Tax EvasionRead the Press Release
Fifty-nine-year old Anthony P. Sertich, Jr., faces up to 55-years in federal prison after a jury in San Antonio convicted him today of ten counts of failure to truthfully account for and pay withholding taxes and one count of tax evasion, announced United States Attorney Richard L. Durbin, Jr., and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge William Cotter.
According to court documents, Sertich was a medical doctor who was the Member, Director and President of Advanced Artistic Facial Plastic Surgery of Texas, PA (hereinafter AAFPST) and South Texas Otorhinolaryngology, PA (hereinafter STO). During the calendar years 2008 through 2010, Sertich failed to pay over $226,000.78 to the Internal Revenue Service in payroll taxes withheld from AAFPST’s employees’ paychecks.
In addition, Sertich was found guilty of tax evasion. Between 2002 and 2010, Sertich accrued $2,927,366.45 in unpaid payroll taxes penalties and interest for AAFPST and STO. Sertich evaded paying the taxes by withholding and keeping money, which should have been paid to the IRS, and by repeatedly filing bankruptcy to take unfair advantage of the automatic stay of creditors.
Instead of paying the payroll taxes, Sertich paid himself millions of dollars in salary, which in turn paid for personal expenses such as a large mortgage and interest payments, real estate tax payments and alimony payments. Sertich also filed four personal and one corporate bankruptcy petitions, all but one of which was subsequently dismissed by the court.
“Dr. Anthony P. Sertich, Jr., deliberately evaded paying federal payroll taxes for over eight years, cheating the tax system and ultimately, all other taxpayers. He withheld money from his employees’ pay, which he applied to his own use, and abused the bankruptcy process to defeat possible collection efforts. Today’s verdict holds him accountable for his criminal conduct,” said U.S. Attorney Durbin.
“The jury’s guilty verdict of Dr. Anthony P. Sertich Jr. represents IRS Criminal Investigation's continued commitment to identifying and prosecuting those individuals who evade the tax laws,” said Special Agent in Charge William Cotter of the Internal Revenue Service - Criminal Investigation, San Antonio. “The tax law is very clear – every employer is responsible for withholding employment taxes from the salaries of their employees. Those employers who do not withhold employment taxes are breaking the law.”
Sertich remains on bond pending sentencing set for May 23, 2016.
This case was investigated by special agents with the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney William R. Harris prosecuted this case on behalf of the Government.
####
Rwandan national sentenced to 70 months in prison for resisting deportation ordersRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that a Rwandan national was sentenced Monday to 70 months in prison for refusing to leave the country after being ordered to depart.
Innocent Safari Nzamubereka, 38, of Rwanda, was sentenced by U.S. District Judge Dee D. Drell on two counts of failure to depart for resisting removal after final deportation orders. According to evidence admitted at a two-day trial that ended on November 20, 2015, Nzamubereka refused to sign visa applications necessary for him to be sent back to the Republic of Rwanda where he had been ordered to return on March 12, 2013 and April 11, 2013.
The Immigration and Customs Enforcement - Enforcement and Removal Operations conducted the investigation. Assistant U.S. Attorneys Howard C. Parker and Dominic Rossetti prosecuted the case.
Robstown Man Convicted of Distributing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – Jorge Betancourt, 37, of Robstown, has pleaded guilty to distribution of child pornography, announced U.S. Attorney Kenneth Magidson.
The court heard today that the case began when a detective with the Corpus Christi Police Department was able to successfully download various files containing child pornography from an IP address that was associated with Betancourt. As a result, Homeland Security Investigations (HSI) was contacted to assist in the investigation.
In June 2015, authorities executed a search warrant at Betancourt’s residence, at which time they seized several digital devices. Forensic analysis on the digital devices revealed more than 530 videos and more than 540 images of child pornography. Betancourt admitted to using peer-to-peer software to download child pornography for approximately 11 years.
Senior U.S. District Judge Hayden Head accepted the guilty plea today and set sentencing for May 25, 2016. At that time, Betancourt faces a minimum of five and up to 20 years in federal prison and a possible $250,000 maximum fine. Upon completion of any prison term imposed, Betancourt also faces a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the Internet.
Betancourt was arrested on the federal charges in October 2015 and has been in custody since that time where he will remain pending his sentencing hearing.
The charges against Betancourt are the result of an investigation conducted by the Corpus Christi Police Department-Internet Crimes Against Children Task Force with the assistance of Homeland Security Investigations.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, 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."
Robert Heath London Sentenced to 51 Months for Possession of Child PornographyRead the Press Release
GREENEVILLE, Tenn. – On Feb. 22, 2016, Robert Heath London, 43, of Rogersville, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 51 months in federal prison for the possession of child pornography.
According to the plea agreement on file with the U.S. District Court Clerk, London downloaded child pornography via the internet at his home in Rogersville from 2011 to mid-2015. Law enforcement officers found a total of 799 still images of child pornography on London's computer.
In addition to 51 months in prison, Judge Greer sentenced London to serve 10 years on federal supervised release with special sex offender conditions of release and to register as a convicted sex offender under Tennessee law.
Law enforcement agencies participating in this investigation include Hawkins County Sheriff's Office and Sullivan County Sheriff's Office. Assistant United States Attorney Helen Smith represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
###
Punta Gorda Man Found Guilty in Multi-State Cocaine ConspiracyRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury today found Leslie Chin (Punta Gorda, 35) guilty of conspiracy to possess with intent to distribute, and to distribute, five or more kilograms of cocaine and a substance containing a detectable amount of marijuana. He faces a mandatory minimum penalty of 10 years, up to life, in federal prison. A sentencing hearing is scheduled for June 6, 2016.
Chin was indicted on December 3, 2014,
According to evidence presented at trial, Chin was involved in a conspiracy with at least 10 persons to distribute crack cocaine in Florida, Georgia, and South Carolina. Two co-conspirators, Andrew Chin and Jerome Antonio Vaughn, have pleaded guilty to their roles in the conspiracy. They are currently awaiting sentencing.
This case was investigated by the U.S. Drug Enforcement Administration, the Florida Highway Patrol, and the Sarasota County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Robert P. Barclift.
Project Safe Neighborhoods grant announcementRead the Press Release
SHREVEPORT/MONROE/ALEXANRIA/LAKE CHARLES/LAFAYETTE, La.: United States Attorney for the Western District of Louisiana Stephanie A. Finley and the Project Safe Neighborhoods Task Force announced today that the Department of Justice, the Office of Justice Programs and the Bureau of Justice Assistance is seeking applications for funding of a grant under the Violent Gang and Gun Crime Reduction Program, also known as Project Safe Neighborhoods (PSN).
PSN furthers the Department of Justice=s mission to reduce violent crime by providing support to state, local and tribal efforts to create safer neighborhoods through a sustained reduction in gang violence and violent crimes committed with firearms. Contingent on the availability of funds, grant awards totaling $300,000 are possible in the Western District of Louisiana to fund new and current comprehensive gun crime reduction and gang violence reduction strategies. The application for this fiscal year 2016 (FY2016) PSN grant must be submitted to and received by the U.S. Attorney’s Office in Lafayette before noon on April 5, 2016.
Various types of single or multi‑grantee grant applications are welcome including those that address the following:
-
Gang violence and gun violence reduction, deterrence, prevention, community outreach and education;
-
Enforcement, adjudication and supervision programs;
-
Prisoner reentry programs; or
-
Other innovative related projects.
The FY2016 PSN Competitive Grant Announcement, BJA-2016-9342, can be found at www.bja.gov/funding/PSN16.pdf. For the announcement or more information on the PSN program visit the U.S. Attorney’s Office website at www.justice.gov/usao/law/ and www.justice.gov/usao/law/psn.html or at www.psn.gov or www.bja.gov/programs/psn.
More information about the FY2016 PSN grant announcement and the PSN program can also be found by contacting Assistant U.S. Attorney and PSN and Anti-Gang Coordinator Robert W. Gillespie Jr. at (318) 676-3600.
-
Principal of Dietary Ingredient Companies Pleads Guilty to Multi-Million Dollar Fraud and Meth Precursor SchemeRead the Press Release
The principal of a series of dietary ingredient companies in New Jersey pleaded guilty today in connection with the sale of methamphetamine precursor chemicals, a separate scheme to defraud purchasers of dietary supplements and money laundering, the Department of Justice announced.
“The Department of Justice has increased its enforcement efforts against unlawful dietary supplements in recent years,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This case underlines the need for both consumers and the government to be vigilant in investigating what the American public is ingesting in the guise of weight loss or health enhancement supplements.”
David Romeo, 46, of Washington Township, New Jersey, pleaded guilty to a four-count Information charging him with conspiracy to distribute three kilograms or more of meth precursors, money laundering, mail fraud and introduction of misbranded food into interstate commerce with intent to defraud or mislead. As part of his plea agreement, Romeo has agreed to forfeit more than $1.2 million in money derived from his crimes.
In pleading guilty, Romeo admitted that he was a principal of Global Nutrients, Stella Labs and Nutraceuticals, all of which were New Jersey-based entities engaged in the sale of dietary ingredients intended for use in dietary supplements sold to consumers. Starting at least as early as 2003, Romeo directed his employees to use cheaper substitutes in place of the dietary ingredients that had actually been ordered by customers, most of whom were companies engaged in production of dietary supplements. These substitutes were sent in many instances without the customer’s consent or knowledge. As alleged in charging documents, Romeo and his associates referred to the substitution of cheaper ingredients as “SOP,” meaning “standard operating procedure.”
Romeo admitted that, as part of the scheme, his businesses purported to sell a weight-loss ingredient called “hoodia.” Stella Labs and Nutraceuticals represented to consumers that they were selling hoodia that had been sourced from a rare South African plant, Hoodia gordonii. As alleged in the charging document, the substance being sold by Romeo’s business entities was manufactured at a facility in China. As part of his plea agreement, Romeo agreed that the fraud scheme caused a loss of more than $7 million.
Special agents of the Food & Drug Administration (FDA)’s Office of Criminal Investigations investigated the false supplement allegations of the case.
“Manufacturing and selling misbranded dietary supplements puts American consumers at risk,” said Director George M. Karavetsos of FDA Office of Criminal Investigations. “Our office is fully committed to working with the Department of Justice to protect consumers from public health risks and fraud.”
The mail fraud charge carries a statutory maximum sentence of 20 years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. The misbranding charge carries a statutory maximum sentence of three years in prison. Sentencing is scheduled for May 18, 2016.
Romeo and his companies were the subject of a prior action by the Federal Trade Commission (FTC) seeking a court order to prevent the sale of bogus dietary ingredients. The case was resolved by a court order barring Romeo from making weight loss claims about supplements he sold. FTC v. Stella Labs, 09-cv-1262 (D.N.J.).
Acting Principal Deputy Assistant Attorney General Mizer thanked the FDA’s Office of Criminal Investigations and Office of Chief Counsel, the Drug Enforcement Agency and the U.S. Postal Inspection Service for their investigative support of the case. The case is being prosecuted by Trial Attorney Patrick Runkle of the Civil Division’s Consumer Protection Branch, Paul Laymon of the Justice Department’s Narcotics and Dangerous Drugs Section and Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office for the District of New Jersey.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at http://www.justice.gov/usao-nj.
Pharmacist and Four Other Individuals Charged in Manhattan Federal Court in Oxycodone Distribution SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, the Police Commissioner of the City of New York (“NYPD”), announced charges today against five individuals for their participation in an oxycodone distribution ring. The alleged conspiracy involved the distribution of oxycodone from a pharmacy in Brooklyn to individuals in the New York metropolitan area. Four of those charged were arrested this morning and presented today in the Southern District of New York, before United States Magistrate Judge Debra Freeman.
Manhattan U.S. Attorney Preet Bharara said: “Recent reports suggest a connection between opioid abuse and declining life expectancy. Yet allegedly these defendants schemed to illegally obtain and resell thousands of oxycodone pills. I want to thank our partners at the FBI and NYPD for their work to fight this public health emergency.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Opioid and prescription drug abuse is sweeping the country. By allegedly engaging in a conspiracy to distribute oxycodone within our community, the defendants engaged in behavior that ultimately contributes to this epidemic – one that has a lasting impact on all segments of society. Today's arrests are not only a victory for the FBI and our partners, but for everyone who confronts the tragic outcomes of opioid addiction and abuse.”
NYPD Commissioner William J. Bratton said: “Oxycodone and other prescription pain killers have the potential to become highly addictive. And they are a driving force behind a rise in fatal overdoses and a spike in heroin addiction that are impacting parts of our City. I commend the work of the US Attorney, the FBI and the NYPD in bringing charges against these five defendants who, as alleged, willfully conspired to peddle these potentially dangerous pills to those likely snared in the downward spiral of addiction.”
According to the allegations in the criminal Complaint[1] unsealed today:
GILBERTO CABRERA, ROBERT HESPETH, KIAN GOHARI, a/k/a “Danny,” SHERI BOWEN, and CALVIN BARRETT, JR., were all members of a drug trafficking organization that, among other things: (i) arranged for individuals to visit doctors’ offices and receive prescriptions for oxycodone that they did not intend to use; (ii) filled those prescriptions at Ekwunife Pharmacy, d/b/a “Afam Pharmacy Associates,” in Brooklyn, New York (the “Pharmacy”); and (iii) distributed those oxycodone pills to purchasers in the New York metropolitan area.
CABRERA, HESPETH, GOHARI, and BOWEN were arrested this morning; BARRETT remains at large.
The conspiracy was led by CABRERA and HESPETH, neither of whom was a medical professional. CABRERA and HESPETH recruited co-conspirators – like BOWEN – willing to obtain prescriptions of oxycodone they did not intend to use. CABRERA and BOWEN then arranged for the co-conspirators to visit doctors’ offices in Brooklyn, New York. Certain doctors tried to monitor patients’ use of oxycodone to insure that they were actually using the pills prescribed to them. Frequently, before co-conspirators visited those doctors, CABRERA or HESPETH provided urine that would test positive for oxycodone, so that the doctor would believe that the co-conspirator was, in fact, taking the oxycodone, rather than selling or distributing it.
After a co-conspirator received the oxycodone prescription, CABRERA arranged for the prescription to be sent to the Pharmacy to be filled, or he took the prescription to the Pharmacy himself. CABRERA gave the prescriptions to a particular pharmacist – GOHARI – who filled the prescriptions for CABRERA. After receiving the oxycodone pills, CABRERA distributed the pills to individuals in the New York metropolitan area. For example, CALVIN BARRETT, JR., frequently purchased distribution-level quantities of oxycodone from CABRERA.
GILBERTO CABRERA, ROBERT HESPETH, KIAN GOHARI, a/k/a “Danny,” SHERI BOWEN, and CALVIN BARRETT, JR., are charged in Count One of the Complaint with conspiring to distribute and possess with the intent to distribute oxycodone, a schedule II controlled substance. The charges in Count One carry a maximum penalty of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Bharara praised the outstanding investigative work of the FBI’s New York Health Care Fraud Task Force, which includes investigators from the FBI, the NYPD, and other federal, state, and local law enforcement agencies.
This prosecution is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Megan Gaffney and Jordan Estes are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Pensacola Resident Pleads Guilty in Multi-State Money Laundering ConspiracyRead the Press Release
PENSACOLA, FLORIDA – Kenneth Grandison, 42, of Pensacola, pled guilty late yesterday to conspiracy to commit money laundering and conspiracy to utilize a telephone facility to further a drug trafficking offense. The guilty plea was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
During his guilty plea, Grandison admitted that, between January 2012 and January 2016, he received illegal drugs from California, including marijuana and codeine, for further distribution in Florida. An investigation identified dozens of Bank of America and Wells Fargo accounts that Grandison used to launder the drug trafficking proceeds. In total, the Bank of America accounts received more than 200 cash deposits, and the Wells Fargo accounts received more than 600 cash deposits. This investigation involved the laundering of between $1.5 and $3.5 million.
The sentencing hearing is scheduled for May 24, 2016, at 12:30 p.m. at the United States Courthouse in Pensacola.
Grandison faces a maximum of 20 years in prison for conspiracy to commit money laundering and a maximum of four years in prison for conspiracy to utilize a telephone facility to further a drug trafficking offense.
This case resulted from an investigation by the Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration, the Escambia County Sheriff’s Office, the Pensacola Police Department, and the Gulf Breeze Police Department. Assistant United States Attorney David L. Goldberg is prosecuting the case.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Operator of South Jersey Tax Preparation Company Pleads Guilty to $340,000 Tax Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Cumberland County, New Jersey, woman today admitted her role in a conspiracy to boost business at a tax preparation company she operated by preparing bogus income tax returns for her clients, U.S. Attorney Paul J. Fishman announced.
Noemi Pender, 57, of Rosenhayn, New Jersey, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to Count One of an indictment charging her with conspiring to aid and assist others in the preparation of false and fraudulent tax returns.
According to documents filed in this case and statements made in court:
Pender was a tax preparer who operated Pender Tax Services in Rosenhayn. For the tax years 2007 through 2011, Pender and Grace Garrett, 63, of Pittsgrove, New Jersey, sought to increase referrals, enhance their business, and enrich themselves by preparing and filing income tax returns based on false information. They used a number of fraudulent practices, including falsely claiming a filer was a “head of household,” inventing and inflating deductions, creating fictitious dependents, and creating false credits for education and childcare.
The bogus returns resulted in a tax loss to the government of more than $340,000.
The conspiracy charge to which Pender pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for June 10, 2016. Garrett previously pleaded guilty to her role on May 19, 2015, and awaits sentencing on March 22, 2016.
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 guilty plea.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.
Defense counsel: Jeffrey Zucker Esq., Camden
One of Two Individuals Charged in Serial Armed Bank Extortion Scheme Pleads Guilty in Federal CourtRead the Press Release
KNOXVILLE, Tenn. – On Mar. 1, 2016, Brian Scott Witham, 45, of Waterville, Maine, pleaded guilty to charges contained in a December 2015, 15-count indictment involving armed bank extortions of the Y-12 Federal Credit Union in Oak Ridge, Tenn., SmartBank in Knoxville, Tenn., and Northeast Community Credit Union in Elizabethton, Tenn.
Additionally, as a part of his plea agreement, Witham agreed to plead guilty to similar charges from three other federal jurisdictions including the Western District of North Carolina, the Middle District of Pennsylvania and the District of Connecticut which he, the U.S. Attorneys and the federal judge all consented to transfer to U.S. District Court in the Eastern District of Tennessee. These charges include: being a felon in possession of a firearm in Haywood County, N.C.; armed robbery of an Ingles in Arden, N.C.; armed robbery of the Peoples Security Bank and Trust in Clarks Summit, Pa.; and attempted armed bank extortion of the Achieve Financial Credit Union in New Britain, Conn.
Sentencing for Witham is set for Aug. 17, 2016, in U.S. District Court in Knoxville.
The plea agreement, which is on file with U.S. District Court in Knoxville, contains detailed information regarding the crimes Witham admits to committing along with co-defendant Michael Anthony Benanti, 43, of Lake Harmony, Pa. Benanti is also charged in this case and is currently in custody awaiting trial currently scheduled for March 29, 2016.
Numerous law enforcement agencies were involved in this investigation. Tennessee agencies included: FBI Knoxville Resident Agency, along with the FBI Safe Streets Task Force; Knoxville Police Department; Knox County Sheriff’s Department; Johnson City Police Department; Carter County Police Department; Oak Ridge Police Department; and Elizabethton Police Department. North Carolina agencies included: FBI Asheville Resident Agency; North Carolina State Highway Patrol; North Caroline State Bureau of Investigation; Asheville Police Department; Maggie Valley Police Department; Waynesville Police Department; Haywood County Sheriff’s Office; and, Buncombe County Sheriff’s Office. Pennsylvania agencies included the FBI Harrisburg Resident Agency assisted by state and local law enforcement. Connecticut agencies included: FBI New Haven Resident Agency; Bristol Police Department; New Britain Police Department; Connecticut State Police; Farmington Police Department; and Berlin Police Department.
The following Assistant U.S. Attorneys were assigned to represent the United States in their various districts: Jacabed Rodriguez-Coss, District of Connecticut; Assistant U.S. Attorney John Gurganus, Middle District of Pennsylvania; and Assistant U.S. Attorney Don Gast; Western District of North Carolina. Assistant U.S. Attorneys David P. Lewen, Jr. and Steven H. Cook from the Eastern District of Tennessee represent the United States in this combined guilty plea.
###
New Orleans, St. Louis, and Milwaukee Join Justice Department's Violence Reduction NetworkRead the Press Release
Deputy Attorney General Sally Q. Yates and Assistant Attorney General Karol V. Mason of the Office of Justice Programs (OJP) today announced that New Orleans, Louisiana, St. Louis, Missouri, and Milwaukee, Wisconsin, will join 10 existing sites which have adopted crime-fighting strategies as part of the Violence Reduction Network (VRN). The initiative is a comprehensive approach to reducing violent crime that complements the Attorney General’s Smart on Crime Initiative and leverages existing Justice Department resources in communities around the country.
“It has been only a year-and-a-half since we launched the first Violence Reduction Network,” said Deputy Attorney General Yates. “In just that short period of time, the partnerships we have built through VRN have helped to reduce crime rates. These results could only have happened through the kind of creative collaboration promoted through the VRN.”
Today’s announcement was made before an audience of U.S. Attorneys, police chiefs, local leaders from the new and existing VRN sites and department officials. Through VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Marshals Service, the Drug Enforcement Administration, the Executive Office of the United States Attorneys, the Office of Community Oriented Policing Services and the Office on Violence Against Women.
In addition to the announcement about the three new VRN sites, the Deputy Attorney General also announced the Police-Prosecutor Partnership, which is soliciting proposals to encourage out-of-the-box collaborations between law enforcement agencies and prosecutors’ offices. This grant solicitation encourages proposals that build on evidence-based crime-fighting models – focusing on reducing violence, sharing intelligence, and engaging the community –by merging and maximizing the expertise of law enforcement officers and prosecutors. The new solicitation is posted at www.bja.gov/funding.aspx.
In 2014, VRN was launched in Camden, Chicago, Detroit, Wilmington, and Oakland and Richmond, California. In September 2015, VRN was expanded to Compton, California; Flint, Michigan; Little Rock and West Memphis, Arkansas; and Newark, New Jersey.
VRN’s core components include customized training and technical assistance; a strategic site liaison to guide the coordination of Justice Department resources; tools to enhance information sharing, including peer-to-peer exchanges; community practice collaboration among existing sites and an annual summit in September.
New Orleans Musician “Big Freedia” Charged with Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that FREDDIE ROSS, JR., age 37, of New Orleans, who performs under the stage name BIG FREEDIA, was charged in a one-count Bill of Information with theft of government funds.
According to the Bill of Information, between about 2010 and continuing until December 2014, ROSS stole money to which he was not entitled from the United States Department of Housing and Urban Development. Although the amount was not specified in the Bill of Information, ROSS was charged with stealing more than $1,000, making his crime a felony.
If convicted, ROSS faces a maximum term of imprisonment of not more than ten years in prison, followed by up to three years of supervised release, and a $250,000 fine.
United States Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by agents with the United States Department of Housing and Urban Development – Office of the Inspector General and the Federal Bureau of Investigation, with assistance from the Housing Authority of New Orleans. The case is being prosecuted by Assistant United States Attorneys Jordan Ginsberg and Maria Carboni.
New Orleans Joins Justice Department’s Violence Reduction NetworkRead the Press Release
WASHINGTON – Deputy Attorney General Sally Q. Yates, Assistant Attorney General Karol V. Mason of the Office of Justice Programs (OJP), and U.S. Attorney Kenneth A. Polite today announced that New Orleans, Louisiana, St. Louis, Missouri, and Milwaukee will join ten existing sites which have adopted crime-fighting strategies as part of the Violence Reduction Network (VRN). The initiative is a comprehensive approach to reducing violent crime that complements the Attorney General’s Smart on Crime Initiative and leverages existing Justice Department resources in communities around the country.
“It has been only a year-and-a-half since we launched the first Violence Reduction Network,” said Deputy Attorney General Sally Quillian Yates. “In just that short period of time, the partnerships we have built through VRN have helped to reduce crime rates. These results could only have happened through the kind of creative collaboration promoted through the VRN.”
“We thank the Department of Justice and OJP in particular, for its continued commitment to improving our local law enforcement efforts,” stated U.S. Attorney Polite. “By providing strategic, technical, and training expertise to NOPD, VRN will help improve public safety in the Greater New Orleans area.”
Today’s announcement was made before an audience of U.S. Attorneys, police chiefs, local leaders from the new and existing VRN sites and department officials. Through VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Marshals Service, the Drug Enforcement Administration, the Executive Office of the United States Attorneys, the Office of Community Oriented Policing Services and the Office on Violence Against Women.In 2014, VRN was launched in Camden, Chicago, Detroit, Wilmington, and Oakland and Richmond, California. In September 2015, VRN was expanded to Compton, California; Flint, Michigan; Little Rock and West Memphis, Arkansas; and Newark, New Jersey.
VRN’s core components include customized training and technical assistance; a strategic site liaison to guide the coordination of Justice Department resources; tools to enhance information sharing, including peer-to-peer exchanges; community practice collaboration among existing sites and an annual summit in September.
In addition to the announcement about the three new VRN sites, the Deputy Attorney General also announced the Police-Prosecutor Partnership, which is soliciting proposals to encourage out-of-the-box collaborations between law enforcement agencies and prosecutors’ offices. This grant solicitation encourages proposals that build on evidence-based crime-fighting models – focusing on reducing violence, sharing intelligence, and engaging the community – by merging and maximizing the expertise of law enforcement officers and prosecutors. The new solicitation is posted athttps://www.bja.gov/funding.aspx.
Mobile Man Sentenced on Gun and Drug ChargesRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Barron O’Neal Brisker, also known as Barron O’Neal Salter, 39, of Mobile, Alabama, was sentenced today in federal court on charges involving conspiracy to possess with intent to distribute crack cocaine and using, carrying, and possessing a firearm in furtherance of and in relation to a drug trafficking felony. Brisker pled guilty to the charges in April of 2015.
At the sentencing hearing, the case prosecutor pointed out to United States District Court Judge Callie V. S. Granade that Brisker had four prior drug felonies in Mobile County Circuit Court, and that the last two were for distribution charges. The prosecutor also pointed out that Brisker had been arrested on eight additional distribution charges in 2013, which were still pending in state court and involved allegations that he was selling the drugs near a school. The prosecutor argued that the statutory mandatory penalties were appropriate for Brisker and that he represented a menace to the community.
Judge Granade imposed the mandatory sentence of 181 months imprisonment, which consisted of a minimum mandatory sentence of 121 months on the drug charge, which will be followed by a minimum mandatory consecutive sentence of 60 months on the gun charge. The judge also ordered that Brisker serve a five-year term of supervised release when he is released from his incarceration. The judge further ordered that during his imprisonment and his supervision, Brisker will undergo mental health treatment as well as treatment for drug abuse. No fine was imposed, but the judge ordered that Brisker pay $200 in special mandatory assessments.
The case was investigated by the Mobile Police Department, the United States Marshals Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorney Gloria Bedwell.
Miami Resident Pleads Guilty for his Participation in an Identity Theft Tax Fraud Scheme Involving the IRS “Get Transcript” ServiceRead the Press Release
A Miami resident pled guilty for his participation in an identity theft tax fraud scheme where he used stolen personal identification information (PII) to access the IRS “Get Transcript” service and obtain tax records of his identity theft victims.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Timothy Camus, Deputy Inspector General for Investigations, Treasury Inspector General for Tax Administration (TIGTA), Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and William Hernandez, Chief, North Miami Beach Police Department (NMBPD), made the announcement.
Marvin Ricardo Herard, 26, of Miami, pled guilty to one count of wire fraud, in violation of Title 18, United States Code, Section 1343, one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1). As part of the plea agreement, Herard agreed to restitution in the amount of $172,521. At sentencing, Herard faces a maximum statutory sentence of twenty years in prison for the wire fraud charge, a maximum statutory sentence of ten years in prison for the access device charge, and a mandatory term of two years’ imprisonment, consecutive to any other prison term, for the aggravated identity theft charge.
According to court documents, the IRS maintained a “Get Transcript” service that allowed an individual taxpayer to request and receive a transcript of their IRS tax records online, including line-by-line tax return information for prior years. To obtain access to the “Get Transcript” service, the user was required to create a user account and provide PII.
Log files from the “Get Transcript” service revealed that an email address controlled by defendant Herard attempted to access 38 different taxpayers’ accounts in “Get Transcript”, and had successfully accessed 22 accounts. Additionally, log files captured the IP addresses from which Herard’s email address was used to access the “Get Transcript” service. For the 2014 tax year, over 100 fraudulent tax returns, seeking over $500,000 in refunds, were filed from these IP addresses. The IRS paid out $172,521 in refunds on these fraudulent tax returns. Some of these fraudulent tax returns were for taxpayers whose information was accessed in the “Get Transcript” service using Herard’s email address.
Law enforcement obtained a federal search warrant for the contents of Herard’s email account. The email account contained over 1,150 unique pieces of PII, including names, dates of births, and Social Security numbers. In addition, there were hundreds of automated messages from the IRS “Get Transcript” service, indicating that Herard’s email account had been used to attempt to access numerous taxpayers’ accounts.
Herard is scheduled to be sentenced on May 10, 2016 at 9:30 a.m. before United States District Judge Darrin P. Gayles.
Mr. Ferrer commended the investigative efforts of TIGTA, IRS-CI, and NMBPD. The case is being prosecuted by Assistant U.S. Attorney Daya Nathan.
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.
Methamphetamine Traffickers SentencedRead the Press Release
ABILENE, Texas — An Abilene, Texas, man, Roy Rene Andrade, 31, was sentenced this morning by Chief U.S. District Judge Jorge A. Solis, in federal court in Abilene, to 240 months in federal prison, following his guilty plea in December 2015 to one count of possession with intent to distribute 50 grams or more of methamphetamine, announced U.S. Attorney John Parker of the Northern District of Texas.
Earlier this month, co-defendants Dion Ray Wheeler, 33, and Scott Andrew Michael, 39, also of Abilene, were each sentenced by Judge Solis to 60 months in federal prison. Each pleaded guilty in October 2015 to one count of possession with intent to distribute five grams or more of methamphetamine.
Andrade pleaded guilty in open court, without a factual resume or plea agreement, to count six of the superseding indictment. According to documents filed in the case and statements made in court, on November 18, 2014, investigators with the Taylor County Sheriff’s Office (TCSO) were conducting surveillance at an apartment complex in Abilene. Investigators observed Andrade, a known drug trafficker, drive away from the complex in a red vehicle. Andrade then began driving at a high rate of speed through a residential area and was eventually arrested. After a drug detection dog alerted on his vehicle, investigators found methamphetamine, in a can with a hidden compartment, and more than $12,000 cash in the vehicle. Investigators returned to the apartment complex and gained access to the apartment where Andrade had been staying. An additional 123 grams of methamphetamine and a .40 caliber Glock semiautomatic pistol were found in a safe to which Andrade had the keys.
On January 21, 2014, approximately 660 grams of methamphetamine were found in a vehicle that was registered to and driven by Andrade.
In June 2014, investigators with the TCSO conducted a traffic stop on a vehicle driven by Michael. As they approached the vehicle, investigators smelled a strong odor of marijuana coming from the vehicle. Pursuant to a search, investigators discovered marijuana, baggies, a pipe, digital scales, a safe and approximately 14.4 grams of methamphetamine packed for distribution.
In October 2014, investigators with the TCSO stopped Wheeler’s vehicle for a traffic violation. A drug detection dog alerted, and a subsequent search discovered a clear baggie containing 9.35 grams of methamphetamine. Wheeler admitted that he was a methamphetamine user, had gotten the methamphetamine from Andrade and that he intended to sell it.
The Texas Department of Public Safety and the TCSO investigated. Assistant U.S. Attorney Juanita Fielden was in charge of the prosecution.
# # #
Medical Equipment Company Will Pay $646 Million for Making Illegal Payments to Doctors and Hospitals in United States and Latin AmericaRead the Press Release
Olympus Corp. of the Americas, Nation’s Largest Distributor of Endoscopes, Also Agrees to Reforms and Subsidiary Admits to Foreign Bribery
The United States’ largest distributor of endoscopes and related equipment will pay $623.2 million to resolve criminal charges and civil claims relating to a scheme to pay kickbacks to doctors and hospitals, U.S. Attorney Paul J. Fishman of the District of New Jersey and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division announced today. U.S. Attorney Fishman and Principal Deputy Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division also announced that a subsidiary of the distributor will pay $22.8 million to resolve criminal charges relating to the Foreign Corrupt Practices Act (FCPA) in Latin America.
Anti-Kickback Statute Violations
Olympus Corp. of the Americas (OCA) was charged in a criminal complaint filed today in Newark, New Jersey, federal court with conspiracy to violate the Anti-Kickback Statute (AKS), which prohibits payments to induce purchases paid for by federal health care programs. OCA has entered into a three-year deferred prosecution agreement (DPA) that will allow it to avoid conviction if it complies with the reform and compliance requirements outlined in the agreement.
“For years, Olympus Corporation of the Americas and Olympus Latin America dropped the compliance ball and failed to have in place policies and practices that would have prevented the substantial kickbacks and bribes they paid,” said U.S. Attorney Fishman. “It is appropriate that they be punished for that. At the same time, the deferred prosecution agreement takes into account the companies’ cooperation and commitment to fully functional corporate compliance.”
As a result of the conduct outlined in the government’s criminal complaint and DPA, OCA has agreed to pay a $312.4 million criminal penalty and an additional $310.8 million to settle civil claims under the federal and various state False Claims Acts, the largest total amount paid in U.S. history for violations involving the AKS by a medical device company.
“The Department of Justice has longstanding concerns about improper financial relationships between medical device manufacturers and the health care providers who prescribe or use their products,” said Principal Deputy Assistant Attorney General Mizer. “Such relationships can improperly influence a provider’s judgment about a patient’s health care needs, result in the use of inferior or overpriced equipment, and drive up health care costs for everybody. In addition to yielding a substantial recovery for taxpayers, this settlement should send a clear message that we will not tolerate these types of abusive arrangements, and the pernicious effects they can have on our health care system.”
In a separate DPA, Olympus Latin America Inc. (OLA), a subsidiary of OCA, will pay a $22.8 million criminal penalty for violations of the FCPA.
The criminal complaint against OCA, which OCA agrees is true, charges that OCA won new business and rewarded sales by giving doctors and hospitals kickbacks, including consulting payments, foreign travel, lavish meals, millions of dollars in grants and free endoscopes. For example:
-
OCA gave a hospital a $5,000 grant to facilitate a $750,000 sale;
-
OCA held up a $50,000 research grant until a second hospital signed a deal to purchase Olympus equipment;
-
OCA paid for a trip for three doctors to travel to Japan in 2007 as a quid pro quo for their hospital’s decision to switch from a competitor to Olympus; and
-
a doctor with a major role in a New York medical center’s buying decisions received free use of $400,000 in equipment for his private practice.
These and other kickbacks helped OCA obtain more than $600 million in sales and realize gross profits of more than $230 million.
The criminal complaint alleges that the improper payments happened while Olympus lacked training and compliance programs. Unlike other medical and surgical products companies, Olympus did not create the position of compliance officer until 2009 and did not hire an experienced compliance professional until August 2010.
The DPA requires OCA to adopt several compliance measures to remedy its problems:
-
OCA must enhance its compliance training and maintain an effective compliance program;
-
OCA must maintain a confidential hotline and website for OCA employees and customers to report wrongdoing;
-
OCA’s chief executive officer and board of directors must certify annually that the program is effective; and
-
OCA must adopt an executive financial recoupment program requiring executives who engage in misconduct or fail to promote compliance to forfeit up to three years of performance pay.
Larry Mackey, a former federal prosecutor best known for trying the Oklahoma City bombing cases, has been selected as an independent monitor to evaluate and oversee Olympus’ compliance with the DPA. He was selected by U.S. Attorney Fishman under department guidelines and approved by the Deputy Attorney General. The DPA and monitor will remain in place for three years and can be extended for another two years if Olympus violates the DPA.
In the civil settlement, Olympus agrees to pay $310.8 million to the federal government and the states to resolve claims that Olympus’s payment of kickbacks caused false claims to be submitted to federal health care programs Medicare, Medicaid and TRICARE, and thus violated not only the AKS but also the federal and various state False Claims Acts. The federal share of the civil settlement is $267,288,323, and Olympus will pay $43,512,053 million to participating states that contributed to the falsely claimed Medicaid payments at issue.
The civil settlement resolves a lawsuit filed by John Slowik, the former chief compliance officer of OCA, in the District of New Jersey, under the federal and various state False Claims Acts. The acts permit whistleblowers to file suit for false claims against the government entities and to share in any recovery. Mr. Slowik will receive $44,102, 573 million from the federal share and $7 million from the state share of the civil settlement amount.
FCPA Violations
In a separate criminal complaint filed today in Newark federal court, OCA’s Miami-based subsidiary OLA was charged with FCPA violations in connection with improper payments to health officials in Central and South America, and OLA entered into a separate three-year DPA. According to court documents, from 2006 until August 2011, OLA implemented a plan to increase medical equipment sales in Central and South America by providing payments to health care practitioners at government-owned health care facilities. These payments included cash, money transfers, personal grants, personal travel and free or heavily discounted equipment. The primary method to deliver these illicit benefits was through “training centers,” nominally set up to educate and train doctors, but which OLA used to provide benefits to pre-selected practitioners. OLA and its conspirators paid nearly $3 million to practitioners to induce the purchase of Olympus products and recognized more than $7.5 million in profits as a result.
“Olympus Latin America admitted to bribing publicly employed health care providers and hospital officials across Central and South America so that it could illegally win business and sell its products,” said Principal Deputy Assistant Attorney General Bitkower. “OLA’s illegal tactics in Central and South America mirrored Olympus’s conduct in the United States. The FCPA resolution announced today demonstrates the department’s commitment to ensuring the integrity of the health-care equipment market, regardless whether the illegal bribes occur in the U.S. or abroad.”
OLA entered into the DPA with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the District of New Jersey. The agreement requires OLA to pay a criminal penalty of $22.8 million, retain the same compliance monitor as for OLA (Mr. Mackey) for a period of three years and implement a number of compliance measures. The department reached this resolution based on a number of factors, including that OLA did not voluntarily disclose the misconduct in a timely manner, but OLA did receive credit of a 20 percent reduction on its penalty for its cooperation, including its extensive internal investigation, translation of numerous foreign language documents and collecting, analyzing and organizing voluminous evidence.
Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Olympus executed a corporate integrity agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG). The CIA details the compliance program OCA must maintain, which must include:
-
compliance responsibilities for OCA management and the board of directors;
-
a health care compliance code of conduct that includes certain standards;
-
training and education that includes specified standards;
-
requirements for consulting arrangements, grants and charitable contributions, management of field assets and review of travel expenses;
-
risk assessment and mitigation process; and
-
review procedures for testing the compliance program.
“Olympus Corp. of the Americas’ and its subsidiaries’ greed-fueled kickback scheme threatened the impartiality of medical decision-making and the financial integrity of Medicare and Medicaid,” said Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, we remain vigilant and committed to protecting beneficiaries and taxpayers from those seeking to unlawfully enrich themselves.”
* * *
The U.S. Attorney’s Office of the District of New Jersey prosecuted the criminal case under the AKS against Olympus and, with the Civil Division’s Commercial Litigation Branch, reached the civil settlement. The U.S. Attorney’s Office of the District of New Jersey and the Criminal Division’s Fraud Section prosecuted the criminal case under the FCPA against OLA. The HHS Office of Counsel to the Inspector General, the FBI, HHS-OIG Office of Criminal Investigations and the National Association of Medicaid Fraud Control Units provided assistance.
The FBI’s Newark Field Office, HHS-OIG and the FBI Allentown, Pennsylvania, Field Office investigated the case.
Assistant U.S. Attorneys R. David Walk Jr. and Deborah J. Gannett of the District of New Jersey’s Health Care and Government Fraud Unit in Newark represented the government in the AKS criminal prosecution. Assistant U.S. Attorney David E. Dauenheimer of the District of New Jersey and Senior Trial Counsel David T. Cohen of the Civil Division’s Commercial Litigation Branch represented the government in the prosecution of the civil case. Mary Riordan and Nicole Caucci of the HHS-OIG negotiated the CIA.
Fraud Section Trial Attorney James P. McDonald and Assistant U.S. Attorneys Walk and Gannett prosecuted the FCPA case. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office of the District of New Jersey, including creating a stand-alone Health Care and Government Fraud Unit, which handles both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.
-
Medical Device Company Will Pay $646 Million for Making Illegal Payments to Doctors and Hospitals in United States and Latin AmericaRead the Press Release
Olympus Corp. of the Americas, Nation’s Largest Distributor of Endoscopes, Also Agrees to Reforms and Subsidiary Admits to Foreign Bribery
NEWARK, N.J. – The United States’ largest distributor of endoscopes and related equipment will pay $623.2 million to resolve criminal charges and civil claims relating to a scheme to pay kickbacks to doctors and hospitals, U.S. Attorney Paul J. Fishman of the District of New Jersey and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division announced today. U.S. Attorney Fishman and Principal Deputy Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division also announced that a subsidiary of the distributor will pay $22.8 million to resolve criminal charges relating to the Foreign Corrupt Practices Act (FCPA) in Latin America.
Anti-Kickback Statute Violations
Olympus Corp. of the Americas (OCA) was charged in a criminal complaint filed today in Newark, New Jersey, federal court with conspiracy to violate the Anti-Kickback Statute (AKS), which prohibits payments to induce purchases paid for by federal health care programs. OCA has entered into a three-year deferred prosecution agreement (DPA) that will allow it to avoid conviction if it complies with the reform and compliance requirements outlined in the agreement.
“For years, Olympus Corporation of the Americas and Olympus Latin America dropped the compliance ball and failed to have in place policies and practices that would have prevented the substantial kickbacks and bribes they paid. It is appropriate that they be punished for that,” U.S. Attorney Fishman said. “At the same time, the deferred prosecution agreement takes into account the companies’ cooperation and commitment to fully functional corporate compliance.”
As a result of the conduct outlined in the government’s criminal complaint and DPA, OCA has agreed to pay a $312.4 million criminal penalty and $310.8 million to settle civil claims under the federal and various state False Claims Acts, the largest total amount paid in U.S. history for violations of the AKS and the largest amount ever paid by a medical device company.
“The Department of Justice has longstanding concerns about improper financial relationships between medical device manufacturers and the health care providers who prescribe or use their products,” said Principal Deputy Assistant Attorney General Mizer. “Such relationships can improperly influence a provider’s judgment about a patient’s health care needs, result in the use of inferior or overpriced equipment, and drive up health care costs for everybody. In addition to yielding a substantial recovery for taxpayers, this settlement should send a clear message that we will not tolerate these types of abusive arrangements, and the pernicious effects they can have on our health care system.”
“The FBI’s stance on corruption and fraud is that of zero tolerance and therefore one of our highest priorities,” said Acting Special Agent in Charge Andrew Campi, FBI-Newark. “In this time of international commerce, whether at home or overseas, the FBI is committed to fighting both corruption and fraud. Companies should have the opportunity to prosper through honest business practices, not the practice of bribery and back room deals.”
In a separate DPA, Olympus Latin America Inc. (OLA), a subsidiary of OCA, will pay a $22.8 million criminal penalty for violations of the FCPA.
The criminal complaint against OCA, which OCA agrees is true, charges that OCA won new business and rewarded sales by giving doctors and hospitals kickbacks, including consulting payments, foreign travel, lavish meals, millions of dollars in grants and free endoscopes. For example:
-
OCA gave a hospital a $5,000 grant to facilitate a $750,000 sale;
-
OCA held up a $50,000 research grant until a second hospital signed a deal to purchase Olympus equipment;
-
OCA paid for a trip for three doctors to travel to Japan in 2007 as a quid pro quo for their hospital’s decision to switch from a competitor to Olympus; and
-
a doctor with a major role in a New York medical center’s buying decisions received free use of $400,000 in equipment for his private practice.
These and other kickbacks helped OCA obtain more than $600 million in sales and realize gross profits of more than $230 million.
The criminal complaint alleges that the improper payments happened while Olympus lacked training and compliance programs. Unlike other medical and surgical products companies, Olympus did not create the position of compliance officer until 2009 and did not hire an experienced compliance professional until August 2010.
The DPA requires OCA to adopt several compliance measures to remedy its problems:
-
OCA must enhance its compliance training and maintain an effective compliance program;
-
OCA must maintain a confidential hotline and website for OCA employees and customers to report wrongdoing.
-
OCA’s chief executive officer and board of directors must certify annually that the program is effective; and
-
OCA must adopt an executive financial recoupment program requiring executives who engage in misconduct or fail to promote compliance to forfeit up to three years of performance pay.
Larry Mackey, a former federal prosecutor best known for trying the Oklahoma City bombing cases, has been selected as an independent monitor to evaluate and oversee Olympus’ compliance with the DPA. He was selected by U.S. Attorney Fishman under department guidelines and approved by the Deputy Attorney General. The DPA and monitor will remain in place for three years and can be extended for another two years if Olympus violates the DPA.
In the civil settlement, Olympus agrees to pay $310.8 million to the federal government and the states to resolve claims that Olympus’s payment of kickbacks caused false claims to be submitted to federal health care programs Medicare, Medicaid and TRICARE, violating not only the AKS but also the federal and various state False Claims Acts. The federal share of the civil settlement is $267.3 million, and Olympus will pay $43.5 million to participating states that contributed to the falsely claimed Medicaid payments at issue.
The civil settlement resolves a lawsuit filed by John Slowik, the former chief compliance officer of OCA, in the District of New Jersey, under the federal and various state False Claims Act. The federal False Claims Act contains a qui tam, or whistleblower, provision that permits whistleblowers to file suit on behalf of the United States for false claims against the government, and to share in any recovery. Mr. Slowik will receive $44.1 million from the federal share and $7 million from the state share of the civil settlement amount.
FCPA Violations
In a separate criminal complaint filed today in Newark federal court, OCA’s Miami-based subsidiary OLA was charged with FCPA violations in connection with improper payments to health officials in Central and South America, and OLA entered a separate three-year DPA. According to court documents, from 2006 until August 2011, OLA implemented a plan to increase medical equipment sales in Central and South America by providing payments to health care practitioners at government-owned health care facilities. These payments included cash, money transfers, personal grants, personal travel and free or heavily discounted equipment. The primary method to deliver these illicit benefits was through “training centers,” nominally set up to educate and train doctors, but which OLA used to provide benefits to pre-selected practitioners. OLA and its conspirators paid nearly $3 million to practitioners to induce the purchase of Olympus products and recognized more than $7.5 million in profits as a result.
“Olympus Latin America admitted to bribing publicly employed health care providers and hospital officials across Central and South America so that it could illegally win business and sell its products,” said Principal Deputy Assistant Attorney General Bitkower. “OLA’s illegal tactics in Central and South America mirrored Olympus’s conduct in the United States. The FCPA resolution announced today demonstrates the department’s commitment to ensuring the integrity of the health-care equipment market, regardless whether the illegal bribes occur in the U.S. or abroad.”
OLA entered into the DPA with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the District of New Jersey. The agreement requires OLA to pay a criminal penalty of $22.8 million, retain the same compliance monitor as for OLA (Mr. Mackey) for a period of three years, and implement a number of compliance measures. The department reached this resolution based on a number of factors, including that OLA did not voluntarily disclose the misconduct in a timely manner, but did receive credit of a 20 percent reduction on its penalty for its cooperation, including its extensive internal investigation, translation of numerous foreign language documents and collecting, analyzing and organizing voluminous evidence.
Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Olympus executed a corporate integrity agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG). The CIA details the compliance program OCA must maintain, which must include:
-
compliance responsibilities for OCA management and the board of directors;
-
a health care compliance code of conduct that includes certain standards;
-
training and education that includes specified standards;
-
requirements for consulting arrangements, grants and charitable contributions, management of field assets and review of travel expenses;
-
risk assessment and mitigation process; and
-
review procedures for testing the compliance program.
”Olympus Corp. of the Americas' and its subsidiaries' greed-fueled kickback scheme threatened the impartiality of medical decision-making and the financial integrity of Medicare and Medicaid,” said Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services, Office of Inspector General's region including NJ. “HHS-OIG and our law enforcement partners remain vigilant and committed to protecting beneficiaries and taxpayers from those seeking to unlawfully enrich themselves.”
The U.S. Attorney’s Office of the District of New Jersey prosecuted the criminal case under the AKS against Olympus and, with the Civil Division’s Commercial Litigation Branch, reached the civil settlement. The U.S. Attorney’s Office of the District for New Jersey and the Criminal Division’s Fraud Section prosecuted the criminal case under the FCPA against OLA. The HHS Office of Counsel to the Inspector General, the FBI, HHS-OIG Office of Criminal Investigations and the National Association of Medicaid Fraud Control Units provided assistance.
The investigations were conducted jointly by special agents and investigators from the FBI Newark Field Office, under the direction of Acting Special Agent in Charge Andrew Campi; the HHS-OIG, under the direction of Special Agent in Charge Scott J. Lampert; and the FBI Allentown, Pennsylvania, Field Office, under the direction of Special Agent in Charge William F. Sweeney Jr. in Philadelphia.
Assistant U.S. Attorneys R. David Walk Jr. and Deborah J. Gannett of the District of New Jersey’s Health Care and Government Fraud Unit in Newark represented the government in the AKS criminal prosecution. David E. Dauenheimer, deputy chief of the Civil Division for the District of New Jersey, and Senior Trial Counsel David T. Cohen of the DOJ Civil Division’s Commercial Litigation Branch represented the government in the prosecution of the civil case. Mary Riordan and Nicole Caucci of the HHS-OIG negotiated the CIA.
DOJ Fraud Section Trial Attorney James P. McDonald and Assistant U.S. Attorneys Walk and Gannett prosecuted the FCPA case. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office of the District of New Jersey, including creating a stand-alone Health Care and Government Fraud Unit, which handles both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
-