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25 March 2016
Two Metro Denver Residents Sentenced to Prison for Defrauding Department of Education Student Loan ProgramRead the Press Release
DENVER – A Metro Denver couple, Raquel A. Espinoza, age 37, and George F. Durbin, age 55, were both sentenced to federal prison by Senior U.S. District Court Judge Wiley Y. Daniel for their involvement in defrauding the U.S. Department of Education student loan program, the Colorado U.S. Attorney’s Office, the U.S. Department of Education, Office of the Inspector General and the U.S. Postal Inspector in Charge in Denver announced. In addition to the federal prison sentence, both defendants were ordered to pay restitution to the Department of Education, the State of Colorado, and various Denver metro area community colleges. They were remanded into custody at the conclusion of the sentencing hearings.
Espinoza and Durbin both pled guilty to one count of mail fraud and one count of aggravated identity theft. Espinoza was sentenced to serve 54 months in federal prison, followed by 3 years of supervised release. She was also ordered to pay restitution to the U.S. Government totaling $262,853.72. Durbin was sentenced to serve 45 months in federal prison, followed by 3 years of supervised release. He was ordered to pay restitution to the U.S. Government totaling $183,806.45. The two defendants are to pay portions of their restitution jointly and severally.
Both defendants were indicted by a federal grand jury on October 22, 2104. Espinoza pled guilty on December 17, 2015. Durbin pled guilty on December 1, 2015. They were both sentenced on March 10, 2016.
According to the stipulated facts contained in both defendants’ plea agreements, defendants Durbin and Espinoza lived together when they concocted a scheme where they would apply for financial aid and enroll in colleges—with no intent to attend—and pocket the financial aid money. As part of the scheme, they enrolled and applied for money not only in their own names, but also in the names of both witting and unwitting third parties. Defendants Espinoza and Durbin applied for and received financial aid under at least twenty-seven different identities, including their own. All of the identities used were the actual identities of friends, acquaintances, family members, or other known persons. In most cases, Defendant Espinoza would present herself as able to assist others in signing up to attend college. She would obtain identifying information from the potential students and promise to obtain financial aid and college enrollment for the person. In return, she or Durbin asked for a portion of the financial aid funds as a fee. Espinoza frequently told persons without a GED or high school diploma that she could still get them enrolled.
Some of the enrollees were in on the scam—they received their money, minus the fee, but never attended classes. Other applicants, however, including applicants connected to Durbin, never heard back from the defendants and were not privy to the scheme. There were also a few instances where Defendants obtained personal information surreptitiously and enrolled people without any cooperation from the victim.
Defendants would fill out online forms in the names of these people, where they would lie or make up information about the applicant’s income, assets, and diploma/GED status. They would also enroll these people at community colleges in the Denver metro area: Arapahoe Community College, Community College of Aurora, Community College of Denver, Front Range Community College, and Red Rocks Community College. When the person was enrolled and approved for financial aid, the Department of Education would disburse financial aid funds to the college in the student’s name. A small amount of financial aid also sometimes came from the State of Colorado. The college would apply the funds to the outstanding balance on the student’s school account -- which generally constituted tuition and fees for the semester. Then, after attendance was verified, the money would be deposited into an account in the student’s name at Higher One, a company with which the community colleges contracted to help manage the distribution of financial aid funds to students.
Once a Higher One account was created, the defendants would access that account, directing the Higher One debit cards to mailing addresses they controlled. To obscure their activities, the two defendants used a combination of various contact information, including at least five different mailing addresses, eleven different phone numbers, and ten different e-mail addresses. Accessing the Higher One account generally required defendants to confirm their identity, which they were usually able to do using the personally identifiable information they had obtained.
Once the defendants received the debit cards or cashed the checks, they would spend the money for their own personal uses. This included, among other things, significant spending at casinos in Colorado—Defendants’ activities resulted in over $22,000 in financial aid funds being spent on gambling and associated fees.
“The defendants not only victimized government college financial aid programs, but victimized students and others by hijacking their personal information and identities to steal financial aid funds,” said U.S. Attorney John Walsh. “Thanks to a team of investigators, the defendants’ scheme to defraud the government, the State, schools and other victims was uncovered, and now they sit in prison as a consequence to their actions.”
"I'm proud of the work of OIG special agents, our law enforcement partners, and the U.S. Attorneys' Office for shutting down this fraud ring and holding Raquel Espinoza and George Durbin and their coconspirators accountable for their criminal actions," said Natalie Forbort, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Western Regional Office. “OIG is committed to fighting student financial aid fraud, and we will continue to aggressively pursue those who participate in these types of crimes."
“The U.S. Postal Inspection Service will continue to vigorously pursue those who utilize the U.S. Mail to perpetrate fraud schemes.” said Craig Goldberg, Inspector in Charge of the U.S. Postal Inspection Service Denver Division. “We are appreciative of the hard work put into this case and our quality law enforcement relationships with the U.S. Department of Education and the Colorado U.S. Attorney’s Office.”
This case was investigated by the U.S. Department of Education, Office of the Inspector General, the United States Postal Inspection Service and the United States Secret Service.
The defendants were prosecuted by Assistant U.S. Attorney Matthew Kirsch, Chief of the U.S. Attorney’s Office Criminal Division, and Special Assistant U.S. Attorney Daniel Burrows.
Two Hampden County Men Indicted for Large Scale Drug ConspiracyRead the Press Release
A Holyoke man and a Chicopee man were charged in U.S. District Court in Springfield yesterday in connection with operating a scheme to transport drugs and cash between Texas and western Massachusetts that were concealed in secret compartments of vehicles.
Javier Gonzalez, 44, of Holyoke, and Jamil Roman, 38, of Chicopee, were indicted on one count of conspiring to distribute and possess with intent to distribute cocaine and heroin and one count of distribution and possession with intent to distribute cocaine. They were charged in a criminal complaint and arrested in March 2014.
According to charging documents, in January 2014, a long-term investigation of a cocaine distribution conspiracy centered in Holyoke and West Springfield led law enforcement to Gonzalez and Roman. It is alleged that Gonzalez used tractor trailers associated with his business, JGL Truck Sales, to drive to Texas to pick up kilograms of cocaine and heroin from his Mexican supply source. He then returned to Massachusetts where Roman sold the drugs on his behalf. In order to transport the drugs, Gonzalez had vehicles modified to contain hidden compartments. He hid the drugs and cash in the compartments of the vehicles, loaded them onto his tractor trailer, and drove to Texas. Gonzalez allegedly made trips to Texas to transport the drugs and cash multiple times per year for the last several years.
According to court documents, on March 25, 2014, Gonzalez was stopped in Agawam by law enforcement as he drove the JGL tractor trailer south. During a search of the tractor trailer, $1.17 million was recovered from a hidden compartment of the cab. Also that day, $350,000 was recovered from the residence of Roman.
The charge of conspiring to distribute and possess with intent to distribute cocaine and heroin provides for a sentence of no greater than a lifetime in prison, a minimum of five years and up to a lifetime of supervised release and a fine of $10 million and restitution. The charge of distribution and possession with intent to distribute cocaine provides for a sentence of no greater than 40 years in prison, a minimum of four years and up to a lifetime of supervised release and a fine of $5 million and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement. The case is being prosecuted by Assistant U.S. Attorneys Neil L. Desroches and Kevin O’Regan of Ortiz’s Springfield Office.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Three Previously Charged Defendants, Three Additional Defendants Indicted on Charges Involving in Drugs Linked to A Mexican Drug Cartel; One Defendant Includes Bank of America EmployeeRead 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 a federal grand jury has returned a 23 count superseding indictment charging six defendants allegedly involved in an illegal narcotics operation stretching from Sinaloa, Mexico to Western New York. Named in the superseding indictment are three defendants previous charged in the case, Jose Manuel Lua-Guizar, 25, Max Riestra, 40, both of Mexico, and Pethrod Dunnigan, 37, of Buffalo, NY. Also charged in the superseding indictment:• Gerardo Ballardo, 23 of Stockton, California
• Bryant Hudson, 36, of Buffalo
• Presiliano Garcia, 31, of Los Angeles, California, a Bank of America employee who allegedly used his position to facilitate money laundering activities in the drug operation.“As the scourge of heroin continues to take a deadly toll on our community, this case shows that law enforcement will go wherever necessary to stop these traffickers in their tracks,” said U.S. Attorney Hochul. “Whether across the country or across the border, from street corners to bank offices, to we will stop the flow of these drugs into our community.”
Charges includes conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine and one kilogram or more of heroin, money laundering conspiracy, international money laundering conspiracy, conspiracy to structure transactions, and structuring transactions. The charges carry a minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine.
Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that according to the superseding indictment and previously filed court documents, law enforcement officers began investigating a sophisticated drug trafficking organization with ties to a Mexican drug cartel operating out of Los Angeles, California area in 2014. The organization shipped drug packages to various states including New York, New Jersey, Illinois, and Colorado. Defendant Max Riestra was identified as being responsible for managing multiple bank accounts that were used to launder proceeds from the drug sales. Defendant Presiliano Garcia was a Bank of America employee who is accused of facilitating the opening of multiple accounts used for laundering drug proceeds. Garcia also facilitated wire transfers of drug proceeds from the United States to bank accounts in Mexico.
During the course of the investigation, officers executed search warrants that resulted in the seizure of drugs including one seizure of 21 kilograms of cocaine and three kilograms of heroin. Officers also seized numerous boxes that members of the drug trafficking operation attempted to mail which included an additional kilograms of cocaine and kilograms of heroin.
The investigation further revealed that a FedEx account controlled by Max Riestra was used to send packages to Buffalo, NY, including some to co-defendants Jose Manuel Lua-Guizar and Gerardo Ballardo. Guizar and Ballardo would travel from California to Buffalo to receive the packages and distribute the cocaine to local Buffalo area drug dealers, including defendant Pethrod Dunnigan. Investigators believe approximately 200 packages containing cocaine and heroin were shipped to cities including Buffalo, Chicago, New York and Denver.
The proceeds from the cocaine sales were deposited in local Bank of America branches in amounts just under $10,000. Deposits of $10,000 or more require the bank to report the transaction. There were also deposits in bank branches across the country. The total amount of money deposited in this fashion had reached more than $10,000,000. Local deposits totaled over $1,000,000 and involved at least 120 transactions.
The superseding indictment is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, Immigration and Custom Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office. Additional assistance was provided by ICE-HSI in Los Angeles, California.
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.
Smuggler Sentenced to Five Years for Abandoning His Customers in the Otay MountainsRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Alexandra F. Foster (619) 546-6735
NEWS RELEASE SUMMARY – March 25, 2016
SAN DIEGO – Alien smuggler Efrain Delgado-Rosales was sentenced today by U.S. District Judge Cathy A. Bencivengo to five years in prison for smuggling four non-U.S. Citizens into the United States and then leaving three of them behind in the Otay Mountains once across the border into the United States.
Delgado-Rosales collected four Mexican citizens who sought to enter the United States illegally from a stash house in Tijuana. In anticipation of the trip, Delgado-Rosales sold them brown clothing to wear as camouflage so they would be less visible to U.S. Border Patrol agents as they crossed through the mountains into the United States. Once the four men bought the clothes, Delgado-Rosales took them from the stash house and walked them to the U.S.-Mexico border fence.
Delgado-Rosales left the four men for a period of hours on the Mexico side of the border fence. During that time, thieves swooped in and robbed the men of all their cash (thousands of dollars) and some of their cell phones. When Delgado-Rosales returned to resume the crossing into the United States, according to one of the robbed men, Delgado-Rosales was “indifferent” to the robbery. His lack of surprise caused his four charges to suspect that Delgado-Rosales was involved in the robbery.
Once over the border fence and into the U.S., Delgado-Rosales guided the four men into the Otay Mountains. Three of the four men had a hard time maintaining Delgado-Rosales’s pace. Instead of slowing down, Delgado-Rosales left the men behind. He only grudgingly returned to retrieve them after one of the three men called the one man who had kept pace with the Delgado-Rosales and begged him to return with the guide.
After almost a day of hiking through the mountains, Border Patrol was alerted to the men’s whereabouts. Border Patrol agents responded to the location –about one mile north of the U.S.-Mexico border and three miles east of the closest checkpoint at the Otay Mesa Port of Entry- to find Delgado-Rosales and the four men. All five men were arrested for being illegally in the United States. All four men identified Delgado-Rosales as their foot guide and explained that they and their families each promised to pay others $5,000 to get them each into the United States, for a total of $20,000.
The area where these men were arrested is remote and mountainous, far from human habitation and unlikely to have cell phone service. The location of the arrests matters, because Delgado-Rosales was implicated in another smuggling operation in the Otay Mountains, further east in more rugged and desert-like terrain. In the August 2014 event, one of the smuggled men, Jose de Jesus Hernandez-Adono, died. His mummified body was found by Border Patrol and Homeland Security Investigations Agents in late September 2014. A witness was located, who had been smuggled in with Hernandez-Adono. The witness identified Delgado-Rosales as the foot guide. According to the witness, Hernandez-Adono died, and the other three barely survived the trek.
The facts detailed in the August 2014 smuggling event mirror those detailed by the men in this case. As in this case, the men in August 2014 were housed at a stash house in Tijuana while waiting to be smuggled into the United States. Delgado-Rosales required that the men buy and wear drab, brown clothing during the crossing to hide from Borer Patrol. The group again consisted of four men and again Delgado-Rosales had them cross over the Otay Mountains. The smuggling fee was the same, $5,000, and Delgado-Rosales again appeared to lack any concern for the welfare of his charges.
Delgado-Rosales has been apprehended by Border Patrol 24 times dating back to July 19, 1999. Only once was he apprehended alone. Every other time, he was apprehended with at least two and up to 46 other undocumented individuals. Once, on September 14, 2003, he was apprehended in a load house in Los Angeles with 61 other undocumented individuals.
U.S. Attorney Laura Duffy said, “This case serves as an example of the extreme dangers associated with crossing illegally into the United States. Smuggling activities are run by criminal organizations that have little concern over the welfare of their charges. Our office will aggressively prosecute those who smuggle illegal aliens into the United States for financial gain, place those in their company in grave danger and needlessly cause deaths.”
Chief Border Patrol Agent Richard A. Barlow added, “The sentence of Delgado-Rosales sends a stern message to those who use dangerous means to smuggle individuals into this country for profit. I would like to acknowledge the U.S. Attorney’s Office for their efforts in this case.”
DEFENDANT Criminal Case No. 15CR02830-CAB
Efrain Delgado-Rosales 35 years old
SUMMARY OF CHARGE
Count 1: Title 18, United States Code, Section 1324 - Bringing in Illegal Alien for Financial Gain – statutory minimum of five years, statutory maximum of 10 years, a maximum fine of $250,000, a 3-year term of supervised release, and $100 special assessment.
INVESTIGATING AGENCY
Border Patrol - Chula Vista Intelligence Division
Sex Offender James Campbell of Swanton, Vermont Indicted for Possession of Child PornographyRead the Press Release
The United States Attorney’s Office for the District of Vermont announced that James Campbell, 55, of Swanton, Vermont, was indicted on March 24, 2016 by a federal grand jury for possession of child pornography involving minors under the age of 12. Campbell’s arraignment is scheduled for March 29, 2016.
According to court documents, Campbell was detected sharing child pornography over the Internet. Subsequently, law enforcement agents obtained and executed a warrant to search Campbell’s house in Swanton, Vermont. During the search, law enforcement seized a computer and electronic media containing child pornography. Campbell also made admissions regarding his possession of child pornography. Campbell was arrested and charged via a criminal complaint later that day. On March 17, 2016, Campbell made an initial appearance in federal court and U.S. Magistrate Judge John M. Conroy ordered Campbell detained pending trial.
The charges against Campbell are merely accusations and he is presumed innocent until and unless he is proven guilty. If convicted, Campbell faces a maximum penalty of up to 20 years in prison and up to lifetime supervised release, although the sentence will be advised by the federal sentencing guidelines.
Campbell is a registered sex offender who has a 2007 Vermont state court conviction for sexual assault of a minor. State court records indicate that the victim in Campbell’s prior case was under 12 years of age at the time of the offense.
Campbell’s federal prosecution is part of Project Safe Childhood, a nationwide Department of Justice initiative designed to protect children from online exploitation and abuse. In Vermont, federal prosecutors are teaming up with federal, state, and local law enforcement agents to identify, investigate, and prosecute those individuals who prey upon children and those that distribute, receive, or manufacture child pornography. For more information on Project Safe Childhood, including resources on internet safety education, please visit www.usdoj.gov/psc.
The collaborative team investigating this case includes law enforcement agents from Homeland Security Investigations, the Vermont Attorney General’s Office, and the Internet Crimes Against Children Task Force.
The United States is represented in this case by Assistant United States Attorney Kunal Pasricha. Campbell is represented by Federal Public Defender Michael L. Desautels.
Seattle Area Man who Claimed Fictitious Twin Brother to Collect Additional Federal Benefits Convicted of Theft, Mail Fraud and Making False StatementsRead the Press Release
A SeaTac man who used a second identity to defraud public assistance programs for more than 20 years was convicted late yesterday of multiple federal felonies following a three day jury trial, announced U.S. Attorney Annette L. Hayes. TRAVIS EDWARD FISCHER, 49, lived with his girlfriend and three children in SeaTac, while also claiming benefits under the name Edward Travis Fisher in Seattle. By pretending to be two completely separate people, FISCHER was able to illegally collect hundreds of thousands of dollars in benefits administered by the Social Security Administration, the Washington Department of Social and Health Services, and the United States Department of Housing and Urban Development. The jury deliberated for just under three hours before finding FISCHER guilty on all counts. Sentencing before Chief U.S. District Judge Ricardo S. Martinez is scheduled for June 23, 2016.
According to records filed in the case and testimony at trial, FISCHER applied for Social Security disability benefits in his true name in August 1984, and collects them to the present day. In 1987, FISCHER also applied for Supplemental Security Income (SSI) benefits in the name of Edward Fischer, using a different Social Security number. Benefits were approved and paid to that identity beginning in 1987. In order to keep receiving benefits FISCHER had to make false representations to Social Security at various times over the last 25 years. FISCHER illegally collected more than $160,000 in benefits administered by the Social Security Administration.
The fraud did not stop with Social Security benefits but extended to food and medical assistance from the Washington State Department of Social and Health Services (DSHS) totaling more than $164,000. Further, FISCHER defrauded the Seattle Housing Authority by using the false identity to claim a low income unit in the Queen Anne neighborhood of Seattle while living in SeaTac with his girlfriend and children. From 1990 to 2013, FISCHER used the Queen Anne residence at various times to accommodate guests and to receive mail in his false name. The housing benefits totaled more than $152,000.
A case manager first noticed the potential fraud after finding both names in a DSHS database in 2011. When confronted, FISCHER first claimed he was the victim of identity theft, and then claimed that he had a twin brother who was also collecting benefits.
In all FISCHER was convicted of seven counts of mail fraud, seven counts of theft of government funds, Social Security Fraud, Misuse of a Social Security Number, and two counts of making a false statement to the United States.
Mail fraud is punishable by up to 20 years in prison and a $250,000 fine, Theft of government funds is punishable by up to 10 years in prison and a $250,000 fine, Social Security Fraud, Misuse of a Social Security Number and making false statements are each punishable by up to 5 years in prison and $250,000 fine.
The case was jointly investigated by the Social Security Administration Office of the Inspector General (SSA-OIG), the Department of Housing and Urban Development Office of the Inspector General (HUD-OIG) and the DSHS Office of Fraud and Accountability.
The case was prosecuted by Special Assistant United States Attorney Benjamin Diggs and Assistant United States Attorney J. Tate London. Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court.
Retired Colonel in Orleans Parish Sheriff’s Office Charged with Conspiracy to Commit Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite and FBI Special Agent in Charge Jeffrey S. Sallet announced that ROY AUSTIN, 69, of St. Tammany Parish and a retired Colonel of the Orleans Parish Sheriff’s Office (“OPSO”), was charged today in a one-count Bill of Information with conspiracy to commit wire fraud.
According to the Bill of Information, beginning in 2009 and continuing until January 2014, AUSTIN and others participated in a conspiracy to commit wire fraud. The Bill of Information alleges that AUSTIN, in his role as a Colonel in the Orleans Parish Sheriff’s Office, arranged for security details through a private company (Austin Sales and Service) for local entities and events, including Mardi Gras Krewes, music and food festivals, and sporting events, engaged in a scheme to defraud those local entities and events by padding the billing documents with names of individuals who did not in fact provide any security services (“Ghost Employees”).
Additionally, after submitting the fraudulently inflated invoices via interstate wires, AUSTIN kept a portion of the overbilled amount in the Austin Sales and Service corporate bank account for his own personal use. In some instances, AUSTIN drafted Austin Sales and Service corporate checks made payable to the Ghost Employees who did not work and then fraudulently endorsed those checks and deposited them into his personal bank account for his own personal use. AUSTIN often also drafted checks made payable to other OPSO employee(s)’ family members under the fraudulent guise of payments for detail work that in fact did not take place as those employee(s)’ share of the fraudulently collected funds.
If convicted of conspiring with others to commit wire fraud, AUSTIN faces statutory penalties of up to five years in prison, a $250,000 fine and three years of supervised release.
The Bill of Information also contains Notice of Forfeiture which puts the defendant on notice that the Government intends on forfeiting any and all property and profits concerned with and/or derived from any illegal activity referenced in the bill of information.
U. S. Attorney Polite reiterated that the Bill of Information describes allegations and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter and would also like to acknowledge the assistance provided by the Louisiana Legislative Auditors. Assistant U.S. Attorney Sean Toomey is in charge of the prosecution.
Repeat Offender Sentenced to 121 Months for Possession of Child PornographyRead the Press Release
A Minnesota man was sentenced today to 121 months in prison for possession of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Andrew M. Luger of the District of Minnesota.
On Dec. 8, 2015, Frank Russell McCoy, 72, was found guilty of possession of child pornography after a two-day trial. U.S. District Judge Patrick J. Schiltz of the District of Minnesota sentenced McCoy today and also ordered him to serve a 10 year term of supervised release.
According to the evidence presented at sentencing, for years, McCoy has written and distributed short stories describing extreme sexual abuse and other acts of violence perpetrated against very young children. In 2013, he was convicted in the Middle District of Georgia of one count of transportation of obscene matters after sending one such story via the Internet to an Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) undercover agent. In Dec. 2013, while on bond pending appeal of that conviction, McCoy amassed a large numbers of computers and related equipment in his home in Minnesota that, a search requested by his U.S. Probation Officer revealed, contained dozens of videos of child exploitation. Evidence at trial further demonstrated that though McCoy had installed forensic wiping software on his computers in order to destroy any evidence of child exploitation images, he had transferred the majority of those files onto a portable video player device just before the seizure.
Assistant U.S. Attorney Katharine T. Buzicky of the District of Minnesota and former Trial Attorney Jeffrey Zeeman of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted the case. ICE-HSI and CEOS’s High Technology Investigative Unit investigated the case.
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 CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Repeat Offender Sentenced to 121 Months for Possession of Child PornographyRead the Press Release
An Otsego man was sentenced today to 121 months in prison for possession of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Andrew M. Luger of the District of Minnesota.
On Dec. 8, 2015, Frank Russell McCoy, 72, was found guilty of possession of child pornography after a two-day trial. U.S. District Judge Patrick J. Schiltz of the District of Minnesota sentenced McCoy today and also ordered him to serve a 10 year term of supervised release.
According to the evidence presented at sentencing, for years, McCoy has written and distributed short stories describing extreme sexual abuse and other acts of violence perpetrated against very young children. In 2013, he was convicted in the Middle District of Georgia of one count of transportation of obscene matters after sending one such story via the Internet to an Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) undercover agent. In Dec. 2013, while on bond pending appeal of that conviction, McCoy amassed a large numbers of computers and related equipment in his home in Minnesota that, a search requested by his U.S. Probation Officer revealed, contained dozens of videos of child exploitation. Evidence at trial further demonstrated that though McCoy had installed forensic wiping software on his computers in order to destroy any evidence of child exploitation images, he had transferred the majority of those files onto a portable video player device just before the seizure.
Assistant U.S. Attorney Katharine T. Buzicky of the District of Minnesota and former Trial Attorney Jeffrey Zeeman of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted the case. ICE-HSI and CEOS’s High Technology Investigative Unit investigated the case.
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 CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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President of Miami-Based Transportation Company Sentenced to 60 Months in Prison for Role in $70 Million Health Care Fraud SchemeRead the Press Release
The president of a transportation company based in Miami was sentenced today to 60 months in prison for his role in a health care fraud scheme involving three mental health centers that resulted in the submission of approximately $70 million in false and fraudulent claims to Medicare.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI’s Miami Division made the announcement.
Damian Mayol, 45, of Miami, was sentenced by U.S. District Judge Ursula Ungaro of the Southern District of Florida, who also ordered Mayol to pay $26,808,841 in restitution and to forfeit the same amount. In January 2016, Mayol was convicted of conspiracy to pay health care kickbacks after a five-day trial.
According to evidence presented at trial, Mayol was the president of Transportation Services Providers Inc. and, along with his co-conspirators, used the company to coordinate the payment of illegal health care kickbacks to recruiters, who in return referred patients to three now-defunct clinics in the Miami area: R&S Community Mental Health Inc. (R&S), St. Theresa Community Mental Health Center Inc. (St. Theresa) and New Day Community Mental Health Center LLC (New Day).
The evidence introduced at trial further established that R&S, St. Theresa and New Day were community mental health centers that purported to provide intensive mental health services to Medicare beneficiaries. On behalf of the recruited beneficiaries, the centers billed Medicare for costly partial hospitalization program (PHP) services that were not medically necessary or not provided to patients, according to trial evidence. Trial evidence demonstrated that patient records, including group therapy session notes, were falsified to support claims for reimbursement from Medicare. Between January 2008 and December 2010, the centers submitted approximately $70 million in false and fraudulent claims to Medicare. Medicare paid approximately $28 million on those claims, the evidence showed.
In December 2015, co-defendants Santiago Borges, Erik Alonso and Cristina Alonso were sentenced to prison terms ranging from 28 months to 120 months on related charges.
The FBI investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. Trial Attorneys A. Brendan Stewart and Timothy Loper of the Criminal Division’s Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
President of Miami-Based Transportation Company Sentenced to 60 Months in Prison for Role in $70 Million Health Care Fraud SchemeRead the Press Release
The president of a transportation company based in Miami was sentenced today to 60 months in prison for his role in a health care fraud scheme involving three mental health centers that resulted in the submission of approximately $70 million in false and fraudulent claims to Medicare.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge George L. Piro of the FBI’s Miami Division made the announcement.
Damian Mayol, 45, of Miami, was sentenced by U.S. District Judge Ursula Ungaro of the Southern District of Florida, who also ordered Mayol to pay $26,808,841 in restitution and to forfeit the same amount. In January 2016, Mayol was convicted of conspiracy to pay health care kickbacks after a five-day trial.
According to evidence presented at trial, Mayol was the president of Transportation Services Providers Inc. and, along with his co-conspirators, used the company to coordinate the payment of illegal health care kickbacks to recruiters, who in return referred patients to three now-defunct clinics in the Miami area: R&S Community Mental Health Inc. (R&S), St. Theresa Community Mental Health Center Inc. (St. Theresa) and New Day Community Mental Health Center LLC (New Day).
The evidence introduced at trial further established that R&S, St. Theresa and New Day were community mental health centers that purported to provide intensive mental health services to Medicare beneficiaries. On behalf of the recruited beneficiaries, the centers billed Medicare for costly partial hospitalization program (PHP) services that were not medically necessary or not provided to patients, according to trial evidence. Trial evidence demonstrated that patient records, including group therapy session notes, were falsified to support claims for reimbursement from Medicare. Between January 2008 and December 2010, the centers submitted approximately $70 million in false and fraudulent claims to Medicare. Medicare paid approximately $28 million on those claims, the evidence showed.
In December 2015, co-defendants Santiago Borges, Erik Alonso and Cristina Alonso were sentenced to prison terms ranging from 28 months to 120 months on related charges.
The FBI investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. Trial Attorneys A. Brendan Stewart and Timothy Loper of the Criminal Division’s Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
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.
Ocean Springs Man Pleads Guilty to Mail Fraud SchemeRead the Press Release
Gulfport, Mississippi. – Eduardo Guillermo Diaz, 58, of Ocean Springs, Mississippi, pled guilty on Tuesday, March 22, 2016, before U.S. District Judge Louis Guirola, Jr., to one count of mail fraud, U.S. Attorney Gregory K. Davis announced today.
Diaz admitted that, while operating an investment business out of his office in Ocean Springs, he devised a mail and wire fraud scheme to defraud his clients of significant sums of money, totaling over $1 million. Diaz represented that he was providing services to his clients as an investment advisor when, in fact, he converted the funds to his own personal use. Diaz also used new investor’s monies to pay alleged dividends and make repayments or refunds to previous investors while, at the same time, deceiving and lulling his clients into believing that the funds were properly and legitimately invested.
Eduardo Guillermo Diaz will be sentenced on June 21, 2016, at 10:00 a.m., by U.S. District Judge Louis Guirola, Jr. He faces a maximum penalty of 20 years in federal prison and a $250,000 fine. This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Andrea Jones.
Mexican Nationals Plead Guilty to Heroin Trafficking Charges Arising Out of Ten Pound Heroin Seizure in New MexicoRead the Press Release
ALBUQUERQUE – Ignacio Nieblas, Jr., 22, a Mexican national residing in Berino, N.M., and Bryan Gabriel Marquez-Flores Jr., 19, a Mexican national residing in Phoenix, Ariz., pleaded guilty today to heroin trafficking charges in federal court in Albuquerque, N.M.
Nieblas and Marquez-Flores were arrested on a criminal complaint charging them with possession of heroin with intent to distribute after the DEA seized 4.65 kilograms (10.416 pounds) of heroin from them during an interdiction investigation at the Amtrak Train Station in Albuquerque on Feb. 5, 2016. The heroin was concealed inside the men’s luggage.
Nieblas and Marquez-Flores were subsequently indicted on Feb. 24, 2016, and charge with conspiracy to distribute heroin and possession of heroin with intent to distribute on Feb. 5, 2016, in Bernalillo County, N.M.
During today’s proceedings, Nieblas and Marquez-Flores both pled guilty to felony informations charging them with conspiracy and possession of heroin with intent to distribute. Each admitted that on Feb. 5, 2016, they conspired with others to deliver the heroin seized from them to an intended destination.
At sentencing, Nieblas and Marquez-Flores each face a statutory maximum penalty of 20 years in federal prison. Both men remain in custody pending sentencing hearings which have yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA. Assistant U.S. Attorney Samuel A. Hurtado 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.
Man Who Resided in Rutland Sentenced to 17 Years in Jail for Multi-Kilo Heroin and Cocaine ConspiracyRead the Press Release
The United States Attorney's Office for the District of Vermont stated that David Baez Garcia, age 49, a citizen of the Dominican Republic, was sentenced on March 18, 2016, to 17 years in jail and five years of supervised release for his role as the leader of a conspiracy to distribute five kilograms or more of cocaine, 100 grams or more of heroin and oxycodone from in or about Summer 2009 through in or about June 2010.
According to documents filed with the Court and testimony from a jury trial that took place starting on September 9, 2015, Baez Garcia, who also used the names Josue Ortiz and Jose Altagracia Ramirez Beltre, came to Rutland, Vermont in 2008. With the assistance of Alexis Jimenez and Florencio Reyes, whom he met in New Hampshire, Baez Garcia brought multiple kilograms of heroin and cocaine and thousands of oxycodone pills into Vermont during the time frame of the conspiracy. Rauddys Barias Tejeda, of Providence, Rhode Island, supplied the heroin as well as some of the cocaine.
In 2009, Baez Garcia also received multi-kilogram shipments of cocaine from two brothers-in-law, Canciano Marquez Mayorga and Candelario Tovar Garcia, who, in turn, were receiving the cocaine from a Mexican drug cartel. After obtaining the cocaine from across the United States-Mexican border in Arizona, Marquez Mayorga and Tovar Garcia, then residing in Manchester, New Hampshire, had it shipped across the country in tractor trailers for redistribution in Vermont and New Hampshire, among other locations. The Vermont group received the final shipment of 10 kilograms of cocaine, worth in excess of $300,000, in late 2009. It traveled across country via tractor trailer to Pawtucket, Rhode Island. Thereafter, it was stored in Worcester, Massachusetts en route to Vermont. Law enforcement seized three kilograms of this shipment during a traffic stop in Massachusetts on December 15, 2009 when it was being transported to Vermont.
As the United States Attorney’s Office stated in its filings, none of these men had any connection to Vermont prior to engaging in drug trafficking here. “Collectively, these men preyed upon addicted individuals in the Rutland area, as well as in other places, for their own profit.”
Baez Garcia pleaded guilty to the charged conspiracy five days into the jury trial. Thereafter, the jury trial was discontinued. In addition to being found responsible for distributing multiple kilograms of cocaine and heroin, the Court also found that Baez Garcia engaged in a drug for guns exchange with one of his customers.
As a result of the broader investigation, the United States Attorney’s Office has convicted seventeen defendants associated with this drug conspiracy, including Baez Garcia. They include Alexis Jimenez, age 48, of Nashua, New Hampshire, Florencio Reyes, age 46, of Worcester, Massachusetts, Canciano Marquez Mayorga, age 29, Candelario Tovar Garcia, age 43, and Rauddys Barias Tejeda, age 43. All of these men are currently serving jail sentences.
The United States also has convicted Justine Durfee, Jessica Lever, Thomas Morrissey, Peter Stout, Samantha Thuman, and Danielle Jankowski, of Rutland, Vermont. These individuals were involved in supporting the drug conspiracy by delivering drugs, providing housing, registering vehicles, or doing other tasks related to the conspiracy for Baez Garcia. In addition, the United States has convicted Edgar Corona and Ramiro Reyes of Worcester, Massachusetts, and Roberto Melendez and Elijah Kleinhans, of Lebanon, New Hampshire for their roles in delivering drugs or otherwise assisting the drug conspiracy. Letitia Carstensen, of Milton, Vermont, also was convicted of drug charges related to her involvement in drug distribution with her then-boyfriend, Alexis Jimenez. These individuals were sentenced to terms of imprisonment by the Court for their roles in assisting the conspiracy.
This case was investigated by the Drug Enforcement Administration with assistance from the Southern Vermont Drug Task Force, the Vermont State Police, and the Burlington Police Department. United States Attorney Eric Miller commends the exemplary work of the federal, state and local law enforcement agencies working collaboratively to investigate this matter.
The United States was represented in this matter by Assistant U.S. Attorney Heather Ross. Baez Garcia was represented by David Williams, Esq. and Brooks McArthur, Esq. of Burlington.
Madisonville, Kentucky, Former Business Owner, Sentenced to 30 Months in Prison for Filing False Tax ReturnsRead the Press Release
Ordered to pay $649,506.15 in restitution
OWENSBORO, Ky. - The former owner of Madisonville, Kentucky businesses was sentenced in United States District Court this week, by Chief Judge Joseph H. McKinley Jr., to 30 months in prison and ordered to pay $649,506.15 in restitution, for filing false tax returns and for conspiring to commit mail and wire fraud, announced United States Attorney John E. Kuhn, Jr.
Gholam A. Sattar-Shamsabadi, 58, operated a photo processing business in Madisonville, which he converted to a café, and a business called Fast Foto Finishing in Henderson, Kentucky, which he began in 2009.
According to court records, Shamsabadi, with the aid of an unindicted co-conspirator, filed false invoices for insurance claims for his business and one personal claim from 2006 to 2012. The total loss amount based on payout on six fraudulent claims totaled $649,506.15. In each of the claims, Shamsabadi claimed that his photo processing equipment was damaged by a power surge from lightning. Also, he claimed that neon signs were destroyed. In each claim, Shamsabadi submitted invoices and estimates for new equipment, and submitted invoices falsely claiming that he had purchased new replacement equipment. According to court documents, Shamsabadi received $135,804 2008 from Hartford Insurance in 2006; $53,993 from Zurich North America in 2010; $216,356 from State Farm Insurance in 2010; $7,613.22 from Liberty Mutual Auto in 2012; $205,000 from Kentucky Farm Bureau (Business Claims and Personal) in 2012; and $30,738.94 from Kentucky Farm Bureau (Personal) in 2012.
Further, Shamsabadi failed to report the proceeds of his insurance fraud as taxable income. In 2010, Shamsabadi failed to report $170,000 of unreported income and in 2012, he failed to report $247,156 in unreported income. Also, in each of these years, Shamsabadi filed tax returns under two different social security numbers creating a total Tax Loss of $82,381.
This case was prosecuted by Assistant United States Attorney Joshua Judd. The Kentucky Insurance Fraud Investigation Division (KIFID) started this investigation and brought it to the attention of the FBI and IRS Criminal Investigations (CI).
Local Woman Sentenced on Health Care Fraud ChargesRead the Press Release
St. Louis, MO – Brandy Archie, St. Louis, Missouri, was sentenced to one year and one day in prison for selling her prescription drugs that had been submitted and paid by Medicaid.
According to court documents, Archie visited a doctor on numerous occasions and falsely represented to the doctor that she needed prescription drugs to treat her medical conditions. She had already decided to sell the drugs.
Archie pled guilty last December to two felony counts of healthcare fraud and two felony counts of possession with intent to distribute prescription drugs. She appeared today for sentencing before United States District Judge Ronnie L. White.
This case was investigated by the U.S. Department of Health and Human Services-Office of Inspector General, the Drug Enforcement Administration and the Missouri Medicaid Fraud Control Unit. Assistant United States Attorney Dorothy McMurtry handled the case for the U.S. Attorney’s Office.
Local Food Service Company Owner Indicted for FraudRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that an Indictment was handed down this week by a federal grand jury charging Frank D. Dolce, age 50, of Wilmington, Delaware with eight counts of tax fraud, one count of structuring to avoid reporting requirements, one count of conspiracy to commit theft from the National School Breakfast and Lunch Programs, and 22 counts of theft from the National School Breakfast and Lunch Programs. Dolce faces up to 10 years of imprisonment for the structuring charge, 3 years of imprisonment on the tax fraud charges, and five years of imprisonment on the conspiracy and each theft offense, and a maximum of a $500,000 fine for structuring, a $100,000 fine for tax fraud, and a $250,000 fine for each remaining offense.
According to the Indictment, Dolce was the owner of Primos Food Service (“Primos”), a food service management company located in Wilmington, Delaware. Primos provided cafeteria services to charter schools in Philadelphia and to the Delaware County Courthouse and Government Center in Media, Pennsylvania. The Indictment alleges that Dolce filed false tax returns both personally and on behalf of Primos, because he failed to report certain cash collected from the schools and the Courthouse Café.
The Indictment further alleges that in January and February 2013, Dolce made or directed one of his employees to make twenty-seven cash deposits, each slightly below $10,000, into different accounts at two branches of TD Bank, N.A. The total cash deposited was over $250,000. The Indictment alleges that Dolce structured the cash transactions in this manner with the intention of avoiding the bank’s requirements to report cash transactions greater than $10,000 to the Department of the Treasury. After the above cash deposits were made, Dolce then used that cash in part to purchase a boat for approximately $355,500.
Finally, the Indictment charges that Dolce conspired with others to steal money directly or indirectly from the U.S. Department of Agriculture (“USDA”), because he falsely inflated claims for reimbursement for meals served to qualifying students at charter schools between April 2011 and January 2014. Specifically, by claiming more meals served under the National School Breakfast and Lunch Programs than were actually served, the Indictment alleges that Dolce stole USDA funds on a number of dates relating to claims for student meals served at Imhotep Institute Charter High School, Community Academy of Philadelphia Charter School, and Mariana Bracetti Academy Charter School, all in Philadelphia.
“This Indictment serves notice to individuals who knowingly defraud federal programs designed to benefit our children. These programs are funded with the tax dollars of the American public. It is the responsibility of all federal contractors to provide all services that have been promised and to accurately report all income earned from those contracts. The Internal Revenue Service, Criminal Investigation Division will gladly provide their financial expertise to pursue those who attempt to enrich themselves by defrauding the federal government.” said Akeia Conner, Internal Revenue Service, Special Agent in Charge.
This case is the result of a joint investigation conducted by the Internal Revenue Service - Criminal Investigation Division, and the United States Department of Agriculture Office of Inspector General - Investigations. The prosecution is being handled by Assistant United States Attorney Jennifer K. Welsh, District of Delaware.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Lincoln Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that on March 25, 2016, Kenneth Lee Johnson, 33, of Lincoln, was sentenced to five years and 10 months, (70 months), in prison for his role in a conspiracy to distribute 50 grams or more of a mixture or substance containing methamphetamine. Following the prison term, Johnson will serve four years on supervised release.
Information provided to law enforcement indicated Johnson was involved in the distribution of at least 350 grams, (approximately 12 ½ ounces) of methamphetamine in the Lincoln area between December 4, 2013, and January 30, 2015.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Lexington Farm Pleads Guilty to Employing Illegal Aliens and Pays a Million Dollar FineRead the Press Release
Contact Person: Jim May (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that HW Group LLC, a Lexington County Farming Operation, has entered a guilty plea to a pattern and practice of employing illegal aliens, a violation of Title 8, United States Code § 1324a, and was sentenced to a one million dollar fine and 4 years of intensive supervision. Senior United States District Judge Joseph F. Anderson, Jr. of Columbia presided over the hearing.
Evidence presented at the hearing established that HW Group is one of several related entities that participate in major farming operations in Lexington County and is better known by a related entity, WP Rawl and Sons. An investigation found that the farm had a pattern and practice of employing illegal aliens in their agriculture business. This employment of illegal aliens was both directly by the farm and by the various subcontractors used. An analysis of company records showed that employees had documentation which was often outdated, counterfeit, or improper. Moreover, some of the subcontractors that were used by the farm had little or no documentation for the workers performing services on HW Group’s land. In total, the investigation found that the farm employed between 300-350 illegal aliens in its farming operations.
The Government and the corporate defendant entered into a plea agreement, whereby the corporation agreed to a one million dollar fine and four years of intensive supervision by the United States Probation Office and the Department of Homeland Security.
The United States Attorney Bill Nettles stated, "This plea and sentencing should serve as a notice to businesses that this District is focused on the demand side enforcement of immigration laws. The law applies to businesses as it does to the individuals.”
The case was investigated by agents of the Homeland Security Investigations. Assistant United States Attorneys Jim May and Jay Richardson of the Columbia office prosecuted the case.
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Lehigh County Man Indicted on Child Exploitation ChargesRead the Press Release
PHILADELPHIA - Michael Lees, a/k/a “Michael Lewis,” a/k/a “Michael Dontask,” 39, of Catasaqua, PA, was charged yesterday by indictment with the enticement of a minor, production of child pornography, attempted production of child pornography and possession of child pornography, announced United States Attorney Zane David Memeger.
According to the indictment, between October and December of 2015, Lees contacted, via Internet, a person that he believed was a 12-year old child and enticed that person to engage in sexual activity and to create a visual depiction of that activity. It is further alleged that Lees possessed a cell phone containing child pornography.
If convicted the defendant faces a mandatory minimum term of 15 years in prison up to life, a mandatory minimum of five years of supervised release, a $500 special assessment, and an additional $25,000 special assessment, and a possible fine.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by the FBI and the Office of the Pennsylvania Attorney General. It is being prosecuted by Assistant United States Attorney Sherri A. Stephan.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Last Defendants in Heroin Trafficking Organization Plead GuiltyRead the Press Release
Memphis, TN – The last two defendants of a drug ring responsible for transporting heroin from Texas to Memphis for mass distribution have pleaded guilty. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the pleas today.
According to information presented in court, in November 2013, members of the Memphis Police Department Organized Crime Unit began investigating members of a drug trafficking organization who were selling large quantities of heroin in the Memphis and Shelby County area.
Abel Gamez, Sr. and Abel Gamez, Jr. were identified as two of the organization’s heroin sources of supply in Texas. The defendants reportedly had people transport heroin from Texas to Memphis via Greyhound.
In January 2015, Organized Crime Unit personnel set up random searches at the Memphis bus station. A narcotics-detection K-9 alerted on Liza Torress, who, along with her son, Arthur Olague, was a passenger on the bus. A search of Torress revealed 350 grams of heroin.
In September 2015, a federal grand jury returned a two-count superseding indictment against the aforementioned defendants, along with multiple others.
According to the indictment, between November 2013 and April 2015, Reginald Brewer aka "Blue," Clarence Carter, Cedric Caruthers aka "Jomo," Tremayne Jackson aka "Bookie," LaCedric Ruffin aka "Ced," and Anthony Wilbourn aka "Dale" conspired to possess with the intent to distribute less than 100 grams of heroin.
The indictment further alleges that Gamez, Sr., Gamez, Jr., Olague, Torres, and Larry Woodley aka "Coffee" conspired to possess with the intent to distribute 100 grams or
more of heroin. During the same time period, Carter and Woodley conspired to possess with the intent to distribute 500 grams or more of cocaine.
In December 2015, Carter, Wilbourn, Ruffin, Torress, Woodley, Olague, Brewer, and Caruthers all pleaded guilty to their charges in the indictment. In early March 2016, Gamez Sr. pleaded guilty to his charges.
On Wednesday, March 23, 2016, Gamez Jr. pleaded guilty to his charges in the indictment.
On Thursday, March 24, 2016, Jackson pleaded guilty to his charges in the indictment.
This case is being investigated by the Memphis Drug Enforcement Administration and the Memphis Police Department Organized Crime Unit.
Special Assistant U.S. Attorney Sam Stringfellow, and Assistant U.S. Attorneys Jerry Kitchen and Michelle Kimbril-Parks are prosecuting this case on the government’s behalf.
Last Defendants in Heroin Trafficking Organization Plead GuiltyRead the Press Release
Memphis, TN – The last two defendants of a drug ring responsible for transporting heroin from Texas to Memphis for mass distribution have pleaded guilty. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the pleas today.
According to information presented in court, in November 2013, members of the Memphis Police Department Organized Crime Unit began investigating members of a drug trafficking organization who were selling large quantities of heroin in the Memphis and Shelby County area.
Abel Gamez, Sr. and Abel Gamez, Jr. were identified as two of the organization’s heroin sources of supply in Texas. The defendants reportedly had people transport heroin from Texas to Memphis via Greyhound.
In January 2015, Organized Crime Unit personnel set up random searches at the Memphis bus station. A narcotics-detection K-9 alerted on Liza Torress, who, along with her son, Arthur Olague, was a passenger on the bus. A search of Torress revealed 350 grams of heroin.
In September 2015, a federal grand jury returned a two-count superseding indictment against the aforementioned defendants, along with multiple others.
According to the indictment, between November 2013 and April 2015, Reginald Brewer aka "Blue," Clarence Carter, Cedric Caruthers aka "Jomo," Tremayne Jackson aka "Bookie," LaCedric Ruffin aka "Ced," and Anthony Wilbourn aka "Dale" conspired to possess with the intent to distribute less than 100 grams of heroin.
The indictment further alleges that Gamez, Sr., Gamez, Jr., Olague, Torres, and Larry Woodley aka "Coffee" conspired to possess with the intent to distribute 100 grams or
more of heroin. During the same time period, Carter and Woodley conspired to possess with the intent to distribute 500 grams or more of cocaine.
In December 2015, Carter, Wilbourn, Ruffin, Torress, Woodley, Olague, Brewer, and Caruthers all pleaded guilty to their charges in the indictment. In early March 2016, Gamez Sr. pleaded guilty to his charges.
On Wednesday, March 23, 2016, Gamez Jr. pleaded guilty to his charges in the indictment.
On Thursday, March 24, 2016, Jackson pleaded guilty to his charges in the indictment.
This case is being investigated by the Memphis Drug Enforcement Administration and the Memphis Police Department Organized Crime Unit.
Special Assistant U.S. Attorney Sam Stringfellow, and Assistant U.S. Attorneys Jerry Kitchen and Michelle Kimbril-Parks are prosecuting this case on the government’s behalf.
Ketchikan Man sentenced to five years in prison for distribution of child pornographyRead the Press Release
Ketchikan, Alaska-U.S. Attorney Karen L. Loeffler announced today that, on March 24, 2016, a resident of Ketchikan was sentenced in federal court in Ketchikan for distribution of child pornography.
Don Arthur Henderson, 37, of Ketchikan, Alaska, was sentenced by U.S. District Chief Judge Timothy M. Burgess to serve five years in prison, to be followed by a 20 year term of supervised release, for a single count of distribution of sexually explicit images and videos of children. Many of the images were prepubescent children engaged in sexually explicit conduct. Henderson was also ordered to pay restitution of $5,000 to the victims of the offense.
According to Assistant U.S. Attorney Jack S. Schmidt, who prosecuted the case, Henderson, who had no criminal record, was identified in February 2015 by the FBI in Juneau as an individual who was distributing known images of child pornography to the internet using a peer to peer (P2P) program. Henderson had made available and distributed five known images of child pornography on the Internet using his P2P program. Further investigation revealed that Henderson had the five images of child pornography he made available on the Internet located on his personal computer for a total of 716 images and nine videos containing images of children engaged in sexually explicit conduct, including images depicting prepubescent children and sadistic and masochistic conduct.
In ordering Henderson’s sentence, Chief Judge Burgess noted the seriousness of the underlying offense of distributing child pornography and that Henderson’s actions “perpetuate the sexual exploitation of children.” Chief Judge Burgess also noted the need to protect the public, the need to deter the defendant and others, as well as, treating the defendant in the most effective manner as reasons for the sentence imposed in this case.
Ms. Loeffler commends the agents of the Federal Bureau of Investigation who conducted the investigation that led to the prosecution of Henderson.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood combines federal, state and local resources to better identify, 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.
Jicarilla Apache Woman Pleads Guilty to Federal Child Abuse ChargeRead the Press Release
ALBUQUERQUE – Fawn Lynnstar Vigil, 30, an enrolled member of the Jicarilla Apache Nation who resides in Dulce, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to a child abuse charge.
Vigil was charged on Jan. 26, 2016, in a two-count indictment with (1) child abuse resulting in great bodily harm, and (2) child abuse by operating a motor vehicle recklessly on April 13, 2012, in Indian Country in Rio Arriba County, N.M.
During today’s proceedings, Vigil entered a guilty plea to Count two of the indictment charging her with child abuse. In her plea agreement, Vigil admitted that on April 13, 2012, she negligently operated a motor vehicle recklessly within the Jicarilla Apache Indian Reservation at an excessive speed, causing the vehicle to leave the roadway and roll-over. Vigil admitted that her actions endangered the life and health of a Jicarilla Apache child who was in the vehicle.
At sentencing, Vigil faces a maximum of three years in federal prison followed by up to one year of supervised release. A sentencing hearing has yet to be scheduled.
This case was investigated by the Jicarilla Apache Tribal Police Department and the New Mexico State Police. Assistant U.S. Attorney Joseph Michael Spindle is prosecuting the case.
Highest-Ranking Navy Official Sentenced to 46 Months in Prison for Accepting Bribes from Foreign Defense Contractor in Massive Bribery and Fraud SchemeRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – March 25, 2016
SAN DIEGO – U.S. Navy Captain Daniel Dusek, the highest-ranking official charged in the massive Navy bribery scandal, was sentenced in federal court today to 46 months in prison for giving classified information to foreign defense contractor Leonard Glenn Francis in exchange for prostitutes, luxury travel and other gifts.
In addition to imposing the prison term, U.S. District Judge Janis L. Sammartino ordered Dusek to pay a $70,000 fine and $30,000 in restitution to the Navy. He was ordered to report to the U.S. Bureau of Prisons on June 15.
Dusek, 49, pleaded guilty in January 2015 to a single count of conspiracy to commit bribery. Dusek admitted that he used his influence as Deputy Director of Operations for the 7th Fleet, headquartered in Yokosuka, Japan, and later as executive officer of the USS Essex and the commanding officer of the USS Bonhomme Richard, to benefit Francis and his company, Singapore-based Glenn Defense Marine Asia, which for decades provided port services to U.S. Navy ships. Dusek admitted that in return, Francis plied him with meals, alcohol, entertainment, gifts, dozens of nights and incidentals at luxury hotels and the services of prostitutes.
Underscoring his importance to the conspiracy, in an email to one of his employees, Francis wrote: “(Dusek) is a golden asset to drive the big decks (aircraft carriers) into our fat revenue GDMA ports.”
During the sentencing hearing, Judge Sammartino told Dusek: “It’s truly unimaginable to the court that someone in your position with the United States Navy would sell out based on what was provided to you – hotel rooms, entertainment and the services of prostitutes.” She noted that Dusek’s actions “potentially jeopardized national security.”
“Captain Dusek’s betrayal is the most distressing because the Navy placed so much trust, power and authority in his hands,” said U.S. Attorney Laura Duffy. “This is a fitting sentence for a man who was so valuable that his conspirators labeled him their ‘Golden Asset.’”
“As a Navy officer, Captain Dusek took an oath to bear true faith and allegiance to the United States. Instead, he chose self-interest, greed and prurience,” said Assistant Attorney General Leslie R. Caldwell. “And when he learned of the investigation, Captain Dusek deleted his email accounts in an attempt to shield his crimes from law enforcement. The Department of Justice is committed to holding public officials responsible when they betray the public trust.”
“This outcome again sends the message that corruption will be vigorously investigated and prosecuted,” said Director James B. Burch of the Department of Defense, Defense Criminal Investigative Service. “This is an unfortunate example of dishonorable Naval officers who recklessly risked the safety of our troops by trading classified information for cash, extravagant gifts and prostitutes. Cases such as these are not motivated by need or other difficult personal circumstances; they are the product of simple greed. This investigation should serve as a warning that those who compromise the integrity of the United States will face their day of reckoning. DCIS and our law enforcement partners will pursue these crimes relentlessly.”
“Captain Dusek put greed and personal pleasure above the safety of his shipmates, and, in doing so, violated his sworn oath as a naval officer,” said Naval Criminal Investigative Service Director Andrew Traver. “His sentence today attests to the seriousness of his crimes. NCIS, along with our partners at the Department of Justice, the Defense Criminal Investigative Service, and the Defense Contract Audit Agency have been steadfast in our commitment to fully investigate the actions of all those involved in the GDMA case, and will continue with the same determination as the investigation proceeds.”
Anita Bales, director, of Defense Contract Audit Agency, said, “DCAA is honored to be a partner with DCIS, NCIS, and the Department of Justice in this investigation. Our investigative support auditors did an outstanding job analyzing the evidence. I'm proud of their work and its impact on bringing justice to those who corruptly defraud the government.”
According to Dusek’s plea agreement, he hand-delivered Navy ship schedules to the GDMA office in Japan or emailed them directly to Francis or a GDMA employee on dozens of occasions, each time taking steps to avoid detection by law enforcement or U.S. Navy personnel.
Dusek was so helpful to GDMA that an employee gloated, Dusek is “an official GDMA card holder.” He was lavishly rewarded for his efforts. In one example cited in the plea agreement, GDMA paid for a hotel for Dusek and his family at the Marriott Waikiki in Hawaii on July 19, 2010. A few weeks later, on August 5, 2010, GDMA paid for a hotel room for Dusek at the Shangri-La in Makati, Philippines and while there, GDMA provided him with the services of a prostitute.
Soon after Dusek’s vacations in Hawaii and the Philippines, Francis asked Dusek to exercise his influence on GDMA’s behalf by steering the aircraft carrier USS Abraham Lincoln and its associated strike group to Port Klang, Malaysia – a port terminal owned by Francis. Dusek replied in a series of emails to GDMA in late August 2010 that he would make it happen. “Good discussion with N00 (Admiral) today and convince him that PKCC (Francis’ terminal) is the better choice,” Dusek wrote to Francis on August 21, 2010. Three days later, Dusek reported to Francis that he had “everyone in agreement that the next CSG (Carrier Strike Group) through the AOR (area of responsibility) will stop at PKCC. Dates will be 08-12 Oct.”
In fact, the USS Abraham Lincoln Carrier Strike Group did make that visit to Francis’ port on October 8-12, 2010, a port visit that cost the United States approximately $1.6 million.
On September 17, 2013, when Dusek learned that Francis and Navy personnel had been arrested, he deleted the contents of his email accounts in an effort to avoid detection by law enforcement.
To date, 10 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including Dusek, Lieutenant Commander Todd Malaki, Commander Michael Vannak Khem Misiewicz, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; and on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine; the others await sentencing.
The ongoing investigation is being conducted by NCIS, DCIS and the Defense Contract Audit Agency. The case is being prosecuted by Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANT Case Number: 15-CR-131-JLS
Daniel Dusek Age: 49 San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371. Maximum penalty five years in prison, $250,000 fine or twice the gross pecuniary gain or loss from the offense, whichever is greater.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Highest-Ranking Navy Official Sentenced to 46 Months in Prison for Accepting Bribes from Foreign Defense Contractor in Massive Bribery and Fraud SchemeRead the Press Release
The highest-ranking official charged in a massive Navy bribery scandal was sentenced in federal court today to 46 months in prison for giving classified information to a foreign defense contractor in exchange for prostitutes, luxury travel and other gifts.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director James B. Burch of the Department of Defense’s Defense Criminal Investigative Service (DCIS), Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Director Anita Bales of Defense Contract Audit Agency (DCAA) made the announcement.
U.S. Navy Capt. Daniel Dusek was sentenced by U.S. District Judge Janis L. Sammartino of the Southern District of California, who also ordered Dusek to pay a $70,000 fine and $30,000 in restitution to the Navy. He was ordered to report to the U.S. Bureau of Prisons on June 15, 2016.
Dusek, 49, pleaded guilty in January 2015 to a single count of conspiracy to commit bribery. Dusek admitted that he used his influence as Deputy Director of Operations for the Seventh Fleet, headquartered in Yokosuka, Japan, and later as executive officer of the USS Essex and the commanding officer of the USS Bonhomme Richard, to benefit Leonard Glenn Francis and his company, Glenn Defense Marine Asia (GDMA). For decades, GDMA provided port services to U.S. Navy ships and in return, Francis plied Dusek with meals, alcohol, entertainment, gifts, dozens of nights and incidentals at luxury hotels and the services of prostitutes, Dusek admitted.
Underscoring his importance to the conspiracy, in an email to one of his employees, Francis wrote: “(Dusek) is a golden asset to drive the big decks (aircraft carriers) into our fat revenue GDMA ports.”
“As a Navy officer, Captain Dusek took an oath to bear true faith and allegiance to the United States,” said Assistant Attorney General Caldwell. “Instead, he chose self-interest, greed and prurience. And when he learned of the investigation, Captain Dusek deleted his email accounts in an attempt to shield his crimes from law enforcement. The Department of Justice is committed to holding public officials responsible when they betray the public trust.”
“Captain Dusek’s betrayal is the most distressing because the Navy placed so much trust, power and authority in his hands,” said U.S. Attorney Duffy. “This is a fitting sentence for a man who was so valuable that his conspirators labeled him their ‘Golden Asset.’”
“This outcome again sends the message that corruption will be vigorously investigated and prosecuted,” said Director Burch. “This is an unfortunate example of dishonorable naval officers who recklessly risked the safety of our troops by trading classified information for cash, extravagant gifts and prostitutes. Cases such as these are not motivated by need or other difficult personal circumstances; they are the product of simple greed. This investigation should serve as a warning that those who compromise the integrity of the United States will face their day of reckoning. DCIS and our law enforcement partners will pursue these crimes relentlessly.”
“Captain Dusek put greed and personal pleasure above the safety of his shipmates and, in doing so, violated his sworn oath as a naval officer,” said Director Traver. “His sentence today attests to the seriousness of his crimes. NCIS, along with our partners at the Department of Justice, the Defense Criminal Investigative Service and the Defense Contract Audit Agency have been steadfast in our commitment to fully investigate the actions of all those involved in the GDMA case, and will continue with the same determination as the investigation continues.”
“DCAA is honored to be a partner with DCIS, NCIS and the Department of Justice in this investigation,” said Director Bales. “Our investigative support auditors did an outstanding job analyzing the evidence. I’m proud of their work and its impact on bringing justice to those who corruptly defraud the government.”
According to Dusek’s plea agreement, he hand-delivered Navy ship schedules to the GDMA office in Japan or emailed them directly to Francis or a GDMA employee on dozens of occasions, each time taking steps to avoid detection by law enforcement or U.S. Navy personnel.
Dusek was lavishly rewarded for his efforts to help GDMA. For example, according to the plea agreement, GDMA paid for a hotel for Dusek and his family at the Marriott Waikiki in Hawaii on July 19, 2010, and on Aug. 5, 2010, GDMA paid for a hotel room for Dusek at the Shangri-La in Makati, Philippines, and provided him with the services of a prostitute.
Soon after, Francis asked Dusek to exercise his influence on GDMA’s behalf by steering the aircraft carrier USS Abraham Lincoln and its associated strike group to Port Klang, Malaysia (PKCC) – a port terminal owned by Francis. Dusek replied in a series of emails to GDMA in late August 2010 that he would make it happen. “Good discussion with N00 (Admiral) today and convince him that PKCC is the better choice,” Dusek wrote to Francis on Aug. 21, 2010. Three days later, Dusek reported to Francis that he had “everyone in agreement that the next CSG (Carrier Strike Group) through the AOR (area of responsibility) will stop at PKCC. Dates will be 08-12 Oct.” The port visit cost the United States approximately $1.6 million.
On Sept. 17, 2013, when Dusek learned that Francis and Navy personnel had been arrested, he deleted the contents of his email accounts in an effort to avoid detection by law enforcement.
To date, 10 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including Dusek, Lieutenant Commander Todd Malaki, Commander Michael Vannak Khem Misiewicz, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine; and on March 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and $34.8 million in restitution to the Navy; the others await sentencing.
The ongoing investigation is being conducted by NCIS, DCIS and DCAA. The case is being prosecuted by Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
Heroin Trafficker, Raymond Valentino Bowser, SentencedRead the Press Release
MARQUETTE, MICHIGAN —U.S. District Judge Robert Holmes Bell sentenced Raymond Valentino Bowser, age 31, of Chicago, IL, to 60 months in federal prison and 12 years of supervised release, U.S. Attorney Patrick Miles announced today. Sentencing followed Bowser’s guilty plea, entered last December, to distribution of heroin within 1,000 feet of a playground.
Bowser was the subject of an investigation conducted by the Gogebic-Iron Area Narcotics Team (GIANT). GIANT made an undercover purchase of heroin from Bowser in Bessemer, Michigan on February 20, 2015. The next day, Bowser was arrested on an unrelated domestic violence charge and taken into custody. During the arrest, Bowser provided a false name and a fake Illinois driver’s license bearing his photo. He was released on bond and then disappeared.
GIANT learned Bowser’s true identity and that he had a 2008 federal drug conviction in Minnesota. In addition, they learned that Bowser was still on federal supervised release and that he was not supposed to leave Minnesota.
GIANT next encountered Bowser on April 17, 2015, when they again bought heroin from him in Bessemer. After the purchase, GIANT executed a search warrant at Bowser’s residence in Bessemer and found a part of a brick of heroin that weighed about 35 grams. According to GIANT, this piece of heroin could be broken up into 350 dosage units or "points." Bowser was arrested on State of Michigan charges, and then turned over to the U.S. Drug Enforcement Administration (DEA) for federal prosecution.
Rather than proceeding to the Federal Bureau of Prisons to commence his sentence, Bowser is being transported to Douglas County, Wisconsin, to face heroin-related charges there, and to the U.S. District Court in Minnesota to answer for violations of the terms of supervised release that were imposed on him as a result of his 2008 federal drug conviction.
This case was prosecuted by Assistant U.S. Attorney Maarten Vermaat.
END
Georgia Resident Pleads Guilty to Laundering Proceeds from a Stolen Identity Tax Refund Fraud SchemeRead the Press Release
An Austell, Georgia, resident pleaded guilty today to one count of money laundering, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney John A. Horn of the Northern District of Georgia.
According to court documents, Rapheal Atebefia, his co-defendants and others obtained the means of identification of actual individuals, including their names and social security numbers and used this information to access the Internal Revenue Service’s (IRS) “Get Transcript” database. Get Transcript is an IRS web application program that enabled individuals to access their tax filing information. The stolen names and the information obtained from Get Transcript were used to file false income tax returns.
Atebefia and his co-conspirators obtained prepaid debit cards from stores located in multiple states and registered the cards in the names of the stolen identities. These debit cards were used to receive the income tax refunds requested on the false tax returns. To conceal this fraudulent scheme, the prepaid debit cards were then used to purchase money orders. Atebefia deposited the money orders into his bank accounts and then structured cash withdrawals of the proceeds in order to prevent the bank from filing Currency Transaction Reports.
Atebefia faces a statutory maximum sentence of 20 years in prison. A sentencing date has not been set. He also faces monetary penalties, restitution and forfeiture.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Horn commended special agents of IRS-Criminal Investigation and the U.S. Postal Service, who investigated the case and Trial Attorneys Michael C. Boteler and Charles M. Edgar Jr. of the Tax Division and Assistant U.S. Attorney Brian Pearce of the Northern District of Georgia, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Georgia Doctor Pleads Guilty to False Billing for Surgical Monitoring Performed by Medical AssistantRead the Press Release
ATLANTA – Robert E. Windsor, an Atlanta-area physician, has pleaded guilty to health care fraud for filing claims for surgical monitoring services he did not perform.
“Windsor put patients at risk by passing the surgical monitoring work he was paid to perform to an unauthorized medical assistant and then lied about it,” said U.S. Attorney John Horn. “This doctor’s scam left patients without a qualified physician monitoring their neurological health during surgery and cheated other healthcare providers out of over $1 million.”
“The conduct of Dr. Windsor was not only criminal, it was reckless and irresponsible. While Dr. Winsor's repeated and extensive practice of falsely billing for services that he himself did not render is at the heart of these federal charges, the potential risk and harm to those many patients who were not getting the required services should not be overlooked. This guilty plea will hold Dr. Windsor accountable for his greed based criminal conduct,” said J. Britt Johnson, FBI Special Agent in Charge,
“The callous disregard for patient safety, coupled with the arrogance of billing for services performed by an untrained employee, is shocking,” said Derrick Jackson, Special Agent in Charge for the HHS Office of Inspector General. “Together with our law enforcement partners, we will seek justice for Medicare beneficiaries and the program they depend upon and trust when they need health care services.”
“Health care fraud is a serious problem that undermines the ability of the Department of Defense to focus on warfighting and defense by diverting precious taxpayer dollars from our national security efforts. DCIS will relentlessly investigate those who defraud DoD’s critical programs, bring violators to justice, and recover funds wherever possible,” said John F. Khin, Special Agent in Charge of the Southeast Field Office-Defense Criminal Investigative Service.
According to United States Attorney Horn, the charges and other information presented in court: Robert E. Windsor, a licensed Georgia physician, entered into a contract with American Neuromonitoring Associates, P.C. (ANA), a Maryland corporation, to provide a medical service called intra-operative monitoring. In this medical procedure, a physician monitors a patient’s nerve and spinal cord activity during surgery to reduce potential adverse effects to the patient.
The contract stated that Windsor would provide real-time monitoring services for patients in surgery via an online platform with technologists in the operating room. Windsor was responsible for providing a final monitoring report at the conclusion of each surgery, and ANA and its sister company would thereafter bill patients and health care benefit programs, including private health insurance companies, for the monitoring. Windsor was paid a fee for each surgery monitored.
Between at least January 2010 through July 2013, Windsor instead assigned the monitoring to a medical assistant who impersonated Windsor by using Windsor’s log-in credentials in the online platform. The medical assistant was not a doctor and was not permitted to perform the monitoring under the contract with ANA. Windsor submitted final monitoring reports falsely stating that he had conducted the monitoring, which ANA and its sister company relied upon in billing health care benefit programs for his services. On several occasions, Windsor billed ANA for monitoring services he purportedly performed when he was actually traveling on an international flight.
In total, after collecting reimbursements from insurers, ANA paid Windsor over $1.1 million for monitoring services he did not perform during this time period. Investigators uncovered Windsor’s fraud through analysis of Medicare billing data and complaints to the HHS-OIG Hotline at 800-HHS-TIPS.
Robert E. Windsor, 54, of Cumming, Georgia, pleaded guilty before U.S. District Court Judge Amy Totenberg. Sentencing for Windsor is scheduled for June 3, 2016 at 10:30 a.m.
This case is being investigated by the Federal Bureau of Investigation; the Department of Defense, Defense Criminal Investigative Service; and the Department of Health and Human Services, Office of the Inspector General.
Assistant United States Attorney Nathan P. Kitchens is prosecuting the case. Former Assistant United States Attorney Jamie L. Mickelson prosecuted the case prior to the plea.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Former Tallassee, Alabama, Assistant Police Chief Sentenced for Beating Suspect During Interrogation, False Statements to the FBI and Selling DrugsRead the Press Release
The Justice Department announced today that former Tallassee, Alabama, Assistant Police Chief, Chris Miles, 41, was sentenced to 41 months in prison for depriving a suspect of his federally protected rights by beating the suspect with a phone book-sized packet of paper during an interrogation and then lying about the incident to an FBI agent investigating the matter. Miles was also sentenced for selling marijuana that he stole from the police evidence room.
Miles’ pleaded guilty on Nov. 17, 2015, to one count of deprivation of civil rights, two counts of false statements and one count of possession with intent to distribute. He was sentenced by U.S. District Judge Myron H. Thompson of the Middle District of Alabama.
According to admissions made during his plea hearing, in April 2013, while he was on duty as assistant police chief, Miles beat a prisoner who was serving a sentence at Tallassee Jail while Miles was interrogating that prisoner about uncharged crimes the prisoner was suspected of having committed. During the questioning, Miles grabbed a thick packet of copy paper and used it to strike the victim multiple times across the victim’s face and head. Miles also repeatedly slapped the victim across the face and head with his hand. His abuse caused the victim to suffer bruising and physical pain. Miles also admitted that earlier in 2013 he stole approximately 16 pounds of marijuana from the police evidence room and later sold it to a known drug dealer.
“Law enforcement leaders serve as role models for their fellow officers, and at all times they must act with integrity, fairness and professionalism,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Justice requires even-handed treatment for all, and without exception, we will aggressively prosecute any officer who beats an inmate, breaks the law and lies to federal investigators.”
“Miles was a maverick, working outside the law,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama. “While we expect interrogations to be thorough, an officer cannot turn an investigation into a punishment. Fortunately, the overwhelming majority of our law enforcement official’s act reasonably and within the bounds of the Constitution.”
This case was investigated by the Auburn Resident Agency of the FBI’s Mobile Field Office, with the assistance of Alabama’s State Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Jerusha T. Adams for the Middle District of Alabama and Trial Attorney Gabriel Davis of the Civil Rights Division.
Former Secretary of Kentucky’s Personnel Cabinet Charged with Accepting KickbacksRead the Press Release
LEXINGTON - Timothy M. Longmeyer, the former Secretary of the Kentucky Personnel Cabinet, solicited and accepted over $200,000 in kickbacks during his tenure, according to a criminal complaint unsealed in federal court today.
An affidavit filed with the complaint alleges that Longmeyer accepted kickbacks from a private consulting company, in exchange for his help in securing multi-million dollar contracts for the consultant, which allowed the consultant to work with the insurance companies who provide healthcare coverage to everyone employed by the state.
As Secretary of the Personnel Cabinet, Longmeyer was responsible for overseeing the Kentucky Employees’ Health Plan (“KEHP”). The KEHP contracted with Humana, Inc. (“Humana”) and Anthem Blue Cross Blue Shield (“Anthem”) to provide healthcare coverage under the KEHP.
Longmeyer used his position to persuade Humana and Anthem to hire the private consultant for services, such as focus groups and telephone surveys. In return, Longmeyer accepted recurring payments from the consultant, including cash and straw contributions to certain political campaigns. The consultant made these payments with the proceeds from contracts with Humana and Anthem.
Longmeyer resigned from the Kentucky Personnel Cabinet on September 30, 2015. During the year leading up to his resignation, Longmeyer solicited approximately $212,500 in kickbacks from the consultant, according to the complaint. Longmeyer received approximately $203,500 in cash and straw campaign contributions.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard Marshall, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement today after the complaint was filed.
Longmeyer is scheduled to appear in court on April 20, at 1:30 p.m. He will face up to 10 of years in prison and a maximum fine of $250,000. However, any sentence following a conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Any criminal complaint is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.
Former New Canaan Resident Admits Defrauding InvestorsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that JOHN B. JEFFREY, also known as TUCKER JEFFREY, 48, formerly of New Canaan, Conn., and currently a resident of Denver, Colo., waived his right to indictment and pleaded guilty yesterday before U.S. District Judge Victor A. Bolden in Bridgeport to one count of wire fraud stemming from a scheme to defraud investors of more than $1.3 million.
According to court documents and statements made in court, JEFFREY offered individuals the opportunity to invest in Anchor Shipping and Trading, and Southern Cross Shipping, representing to victims that the companies were organized in the Marshall Islands, were engaged in the cargo shipping business, and had long-term contracts that would support a profitable international shipping business. Instead of using invested funds as he had promised, JEFFREY used the vast majority of the money for his personal expenses, including paying for the mortgage on his New Canaan home, tuition at private schools, country club dues, and home renovation and landscaping costs.
As part of the scheme, JEFFREY created bogus documents that represented that certain well-known executives in the international shipping business were involved with the companies when, in fact, those executives had no such involvement. He also e-mailed and telephoned his victims falsely representing that the companies were profitable, that the victims would soon be receiving distributions from their investments, and to reassure victims when payments were delayed.
JEFFREY faces a maximum term of imprisonment of 20 years and a fine of up to approximately $2.6 million. A sentencing date is not scheduled.
This matter has been investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Susan L. Wines.
Former NIH Employee Sentenced to Prison for Using Her Government Credit Card for Unauthorized PurchasesRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced Francesca Maria Daniele, age 49, of LaPlata, Maryland, today to 21 months in prison followed by three years of supervised release for wire fraud in connection with the misuse of her government credit card. Judge Chuang also ordered Daniele to forfeit and pay restitution of $22,338.67, the amount of loss resulting from her conduct.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; and Elton Malone, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Special Investigations Branch.
In July 2014, Daniele worked at the National Institutes of Health (NIH), purchasing equipment from vendors and administering contracts on behalf of NIH. According to her plea agreement, from July 12 to 28, 2014, Daniele used her government credit card to fraudulently make approximately $21,830.19 of personal purchases at retail stores. She used her cell phone to call the credit card’s customer service center to approve those purchases. To conceal the scheme, Daniele falsely reported that her credit card had been lost.
Additionally, on October 15, 2014, Daniele opened a credit card account in the name of her minor child. She used the credit card to buy a laptop computer, video game console, a ring and other items, all of which were shipped to a hotel room she rented under an assumed name. Daniele did not pay for several of the items, resulting in a loss to the credit card company of approximately $508.48.
United States Attorney Rod J. Rosenstein praised the HHS-OIG for its work in the investigation, and thanked Assistant United States Attorney Thomas P. Windom and Trial Attorney Justin D. Weitz of the Justice Department’s Public Integrity Section, who prosecuted the case.
Former Hedge Fund Manager Sentenced for Defrauding Investors and Obstructing the SECRead the Press Release
ATLANTA – Stanley J. Kowalewski has been sentenced to 18 years in federal prison for defrauding the investors in his former hedge funds and obstructing the U.S. Securities and Exchange Commission’s (SEC) investigation into his activities.
“Investors trusted Kowalewski to invest their money as promised,” said U.S. Attorney John A. Horn. “Instead, he stole their hard-earned savings and repeatedly lied to them and the SEC about his investments and self-dealing. Incredibly, while on bond awaiting trial in the case, Kowalewski continued to defraud investors based on false promises relating to a new investment business that turned out to be just another scam.”
“While sentencing Mr. Kowalewski to federal prison does not make his many investor turned victims fiscally whole again, denying him his freedom and the opportunity to enjoy their money does have value. It is unfortunate, however, that, in the aftermath of the high profile Madoff case and others like it, we are still plagued with large scale investment fraud schemes such as this. The FBI will continue to work with its many partners, to include the SEC, in identifying, investigating, and presenting for prosecution those individuals that would engage in greed based criminal schemes that defraud so many people,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“This criminal action demonstrates the U.S. Department of Labor's resolve to vigorously enforce the law to ensure that those who defraud employee benefit plans are brought to justice. This case also exemplifies our commitment to protect employee benefits in coordination with fellow federal agencies,” said Isabel Colon, Regional Director of the Employee Benefits Security Administration’s Atlanta Regional Office.
According to U.S. Attorney Horn, the charges and other information presented in court: Kowalewski was the sole owner and Chief Executive Officer of SJK Investment Management, LLC, in Greensboro, North Carolina. Beginning in 2009, Kowalewski solicited investment money from pension funds, school endowments, hospitals, non-profit foundations, and other investors which he placed in two SJK “hedge fund of funds,” an onshore fund and an offshore fund called the Absolute Return Funds. Almost immediately after receiving the first investor money, Kowalewski began diverting the proceeds to pay for personal and business overhead expenses.
In December 2009, Kowalewski formed a new SJK fund called the Special Opportunities Fund, which he did not disclose to investors. He diverted over $16 million from the Absolute Return Funds to the Special Opportunities Fund without disclosing the transfers to investors. After he secretly transferred the funds, Kowalewski diverted millions from the Special Opportunities Fund to himself through various self-dealing transactions, including having the Special Opportunities Fund buy three homes that Kowalewski owned and in which his family, his parents, and his brother-in-law’s family lived. Kowalewski also bought a multi-million-dollar beach house in Pawleys Island, South Carolina, and directed that the Special Opportunities Fund pay him $4 million as a fee to which he was not entitled. Kowalewski created and altered documents in an effort to make these transactions appear legitimate.
Also as part of the scheme, Kowalewski overvalued the assets held by the Special Opportunities Fund and used those fraudulent valuations to calculate the returns for investors in the Absolute Return Funds. As a result, the monthly statements distributed to SJK investors showed fraudulently inflated returns. Investors lost over $11 million as a result of Kowalewski’s fraudulent scheme.
On March 30, 2010, the SEC initiated a proceeding to determine whether there had been violations of the federal securities laws in connection with SJK. As part of its investigation, the SEC subpoenaed Kowalewski to testify under oath. During his sworn testimony, Kowalewski testified that, after the Special Opportunities Fund had purchased his three homes, the Fund had leased the properties to him and his relatives, each for a yearly rental payment. He testified further that Michael J. Fulcher, the Chief Financial Officer of SJK, had drafted, and Kowalewski had signed, the leases at or near the time of the homes’ sales. In truth, however, Kowalewski and his relatives had never leased the homes back from the Special Opportunities Fund. Prior to Kowalewski’s sworn testimony, Kowalewski and Fulcher conspired to obstruct the SEC proceeding by creating the leases and backdating them, in an effort to document the claimed lease relationships and to conceal Kowalewski’s self-dealing transactions. Kowalewski provided the fraudulent leases to the SEC as part of the investigation and then testified falsely about them. Kowalewski further lied to the SEC in his sworn testimony when he testified that he had disclosed the Special Opportunities Fund to investors and attorneys and other professionals had approved of his self-dealing transactions.
While on bond awaiting trial in this case, Kowalewski defrauded investors in another company he controlled named Global Remediation Solutions. He solicited money from investors based on false pretenses and then misrepresented to them how he spent the money. As before, he diverted the investors’ money to his own personal use. Kowalewski was living in Pawleys Island at the time. After Kowalewski’s new fraud came to light, his bond was revoked. Kowalewski has been in custody based on that revocation since September 25, 2015.
Stanley J. Kowalewski, 44, of Pawleys Island, South Carolina, was sentenced by U.S. District Judge Richard W. Story to 18 years in prison, with credit for the time served since September 25, 2015, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $9,436,236.23. Kowalewski was convicted on 22 counts of wire fraud, one count of conspiracy, and one count of obstructing the SEC proceeding in November 2015 after a jury trial.
Michael J. Fulcher, 59, of Greensboro, North Carolina, has pleaded guilty to one count of conspiring with Kowalewski to obstruct the SEC proceeding. His sentencing date has not yet been scheduled.
This case was investigated by Special Agents of the Federal Bureau of Investigation, Investigators with the Atlanta Regional Office of the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), and Special Agents of the Atlanta Regional Office of the U.S. Department of Labor’s Office of the Inspector General. The Atlanta Division Office of the U.S. Securities and Exchange Commission previously brought a civil action against Kowalewski. In that case, Kowalewski was ordered to pay over $16 million in disgorgement and civil penalties.
Assistant United States Attorneys Stephen H. McClain and J. Russell Phillips prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former D.C. Government Employee Pleads Guilty to Accepting Bribes in Scheme Involving PermitsRead the Press Release
WASHINGTON – Lucretia R. Barksdale, a former employee of the District of Columbia Department of Consumer and Regulatory Affairs (DCRA), pled guilty today to a federal bribery charge stemming from a scheme in which she accepted cash in return for facilitating the issuance of construction permits, announced U.S. Attorney Channing D. Phillips, Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Daniel W. Lucas, Inspector General for the District of Columbia.
Barksdale, 51, of Oxon Hill, Md., pled guilty in the U.S. District Court for the District of Columbia to a charge of receipt of a bribe by a public official. The charge carries a statutory maximum of 15 years in prison and potential financial penalties. Under federal sentencing guidelines, Barksdale faces a likely range of 12 to 18 months in prison and possible financial penalties. She is to be sentenced July 13, 2016 by the Honorable Amit P. Mehta.
According to the government’s evidence, Barksdale worked from July 2001 until June 2012 as a contact representative in DCRA’s Business License Department. She was responsible for reviewing and processing applications for various permits. In two meetings at her workstation in April and May of 2012, Barksdale accepted a total of $900 in cash from a person who was actually participating in an undercover FBI investigation. In exchange for this money, she issued two air conditioning permits and one electrical permit. In processing these permits, she did not require the person to take a number and wait in line at DCRA, which is the practice for all customers. She also falsified the requirement calling for the signature of a certified licensed tradesman who would oversee the construction. Instead, she inserted the name of a master licensed tradesman who she knew was not involved in the construction work.
In announcing the plea, U.S. Attorney Phillips, Assistant Director in Charge Abbate, and Inspector General Lucas commended the work of those who investigated the case from the FBI’s Washington Field Office and the District of Columbia Office of the Inspector General. They also expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Kristy Penny and Assistant U.S. Attorneys Lionel André and Michelle N. Bradford, who are prosecuting the case.
Ex-Employee Pleads Guilty to Conspiring to Defrauding New York Power AuthorityRead the Press Release
A former senior investigator of the New York Power Authority (NYPA) pleaded guilty today to charges of conspiring to defraud NYPA and for filing a false 2010 tax return to hide substantial income from the government, the Department of Justice, the Internal Revenue Service and the New York State Inspector General announced.
Between 2009 and 2012, Stephen Sheridan, of Valley Cottage, New York, conspired to defraud NYPA in connection with a $3 million landscaping and maintenance contract. Sheridan helped the owner of the landscaping company skim money that should have gone to the employees who did the work, and fraudulently receive reimbursement from NYPA for fake, “no show” employees. As a result, Sheridan and his co-conspirator received money that was supposed to go to the working employees. In connection with the scheme, Sheridan also filed a false tax return for 2010, according to the two-count felony charge filed in U.S. District Court of the Southern District of New York.
“The defendant schemed to keep money from the NYPA contract that should have gone to the employees who actually did the work,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “And he doubled down on this crime by hiding that extra income from the IRS. The division will continue to work with our partners at the FBI, IRS and New York Inspector General to hold accountable individuals who corrupt the public procurement process.”
“Government employees have access to money and influence the general public doesn’t,” said Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office. “The belief that no one is watching can lead to greed and corruption. This case should prove the FBI and our law enforcement partners won’t stop weeding out those in power who try gaming the system.”
“Mr. Sheridan, for his own personal benefit, not only took advantage of the NYPA, but of the employees who were contracted to do work for it and law abiding taxpayers,” said Special Agent in Charge Shantelle P. Kitchen of the IRS Criminal Investigation New York Field Office. “He is now held accountable for the money he diverted and kept for his own use. IRS Criminal Investigation remains committed to ensuring that everyone pays their fair share of taxes.”
“This former employee used his insider knowledge to corrupt the State contracting process, steal from taxpayers and undercut hard-working employees trying to make an honest, living wage,” said New York State Inspector General Catherine Leahy Scott. “I will continue dedicating the resources of my office and working with local and federal law enforcement partners to fight waste, fraud and abuse in New York and bring to justice anyone who defrauds the state and takes advantage of the labor force.”
Sheridan’s fraud conspiracy charge carries a maximum penalty of 20 years in prison; his tax charge carries a maximum penalty of three years in prison. Each charge carries a maximum fine of $250,000, which may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. Sheridan will also be ordered to pay restitution to NYPA.
The charges against Sheridan arose from an investigation initiated by the New York State Inspector General and are part of an ongoing joint federal and state investigation of bid rigging, fraud and tax-related offenses in the award of contracts at NYPA’s facility in White Plains, New York. This is the third charge to result from the investigation. In June 2015, Thomas Delaney pleaded guilty to conspiring to defraud NYPA and to a tax violation, and in December 2015, Peter Shine pleaded guilty to a tax violation. This ongoing investigation is being conducted by the Antitrust Division’s New York Office with the assistance of the FBI, the IRS Criminal Investigation and the New York State Office of the Inspector General. NYPA is cooperating with the investigation. Anyone with information on bid rigging or other anticompetitive conducted related to the award or performance of municipal and state contracts should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit http://www.justice.gov/atr/contact/newcase.html.
Defendant Sentenced to over Five Years in Prison for Fraudulently Obtaining Scientific EquipmentRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Terrence Mullen, age 41, of Boonton, New Jersey, today to 63 months in prison followed by three years of supervised release for interstate transportation of property taken by fraud. Judge Grimm also entered an order that Mullen forfeit and pay restitution of $414,682.89.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
According to his plea agreement, in September and October 2013, using a fraudulent internet domain name, Mullen emailed a company that specialized in producing and selling scientific devices about the purchase of two mass spectrometers and related equipment for over $400,000. In order to obtain credit to make the purchase, in September 2013, Mullen submitted false information to the company on the credit application, including a false name, references and banking information.
In order to conceal the fraud scheme from New Jersey law enforcement, in October 2013, Mullen rented business space in Beltsville, Maryland and directed the company to deliver the mass spectrometers and equipment to the Beltsville location. After the company shipped the items from Texas to Beltsville, Mullen sold the spectrometers to a company located in New Jersey. Mullen used the sales proceeds to pay for personal expenses and a family member’s educational expenses.
The amount of the loss to the company as a result of the scheme was at least $414,682.89.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorneys Thomas P. Windom and Michael T. Packard, who prosecuted the case.
Cuban National Sentenced for Bank FraudRead 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 Claudia Diaz Diaz, 22, a Cuban National, who was convicted of conspiracy to commit bank fraud, was sentenced to time served and three years probation by U.S. District Court Judge Richard J. Arcara, to conspiracy to commit bank fraud.Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that Diaz fraudulently obtained the credit/debit card numbers of actual people and then encoded counterfeit cards with the information illegally obtained. The defendant then used the counterfeit cards to purchase merchandise at retail stores in the area, including a Tops Market in Amherst, NY and a CVS Pharmacy in Buffalo, NY. Diaz obtained the information associated with approximately 79 credit and debit card accounts at various financial institutions.
Five other Cuban Nationals, Eduardo Quinones Hernandez, Yasser Carrillo Chartrand, Yaily Santurio Milian, Misael Toledo Rios, and Jose Valdivia Quinones are also charged in this scheme to defraud involving counterfeit debit cards. Hernandez, Quinones, Milian and Rios have been convicted, charges are pending against Chartrand. 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.
Today’s sentencing is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, the U.S. Secret Service, under the direction of Special Agent in Charge C. Todd Laster, and the New York State Police, under the direction of Major Michael Cerretto.
Convicted Cross-Burner Indicted on Federal Gun ChargesRead the Press Release
Montgomery, Alabama – Steven Joshua Dinkle, 30, a former Exalted Cyclops of the Ozark, Alabama chapter of the International Keystone Knights of the Ku Klux Klan (KKK), was arraigned in federal court on March 22, 2016 on charges of being a felon in possession of a firearm, announced George L. Beck, Jr., United States Attorney for the Middle District of Alabama. The arraignment follows an indictment by a federal grand jury earlier this month.
Dinkle was previously convicted in May of 2014 of several federal felonies surrounding the burning of a cross in a predominantly black neighborhood. Dinkle served his sentence for the convictions and was released in May of 2015. While on supervised release from May to August 2015, Dinkle was cited for multiple violations of the terms of his probation, including possession of a firearm, and his probation was revoked. He is still in Bureau of Prison custody following the probation revocation.
This past Tuesday, Dinkle entered a plea of not guilty to allegations that he possessed a firearm while he was on supervised release following the 2014 felony convictions. Federal law makes it a crime for anyone who has been convicted of a felony offense to possess a firearm, unless they have had their gun rights restored.
An indictment merely alleges that a crime has been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. Dinkle faces a possible sentence of up to 10 years imprisonment if convicted.
This case is being investigated by the Bureau of Alcohol, Tobacco and Firearms, the United States Probation Office, and the Dale County Sheriff’s Office. This case is being prosecuted by Assistant United States Attorney Susan Redmond.
Columbia Marijuana Dealer Sentenced to 10 Years in PrisonRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Leonaldo Harris, age 34, of Columbia, Maryland today to 10 years in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute between 1,000 and 3,000 kilograms of marijuana. Judge Grimm also ordered Harris to pay a money judgment of $2 million.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Colonel Tyree C. Blocker, Commissioner of the Pennsylvania State Police.
According to his plea agreement, Harris conspired with Jermaine McGregor and Jennifer Sims to obtain and transport marijuana from California to Maryland for distribution. Harris arranged for bulk cash to be transported from Maryland to California to purchase marijuana. McGregor assisted in the transportation of the cash, packing money in suitcases which he took with him on commercial flights from Maryland to California. Harris arranged for McGregor to make at least six trips to California, transporting between $200,000 and $250,000 on each flight. Harris directed McGregor and other conspirators where to go in California to obtain the marijuana, which the conspirators then transported to a residence in California controlled by Harris. Harris, McGregor, and other co-conspirators then packaged the marijuana for shipment to Maryland.
Harris arranged for the marijuana to be shipped to a warehouse in Beltsville, Maryland, where Sims often accepted delivery of the marijuana. Harris, McGregor and other members of the conspiracy then repackaged the marijuana for distribution and sold it to others in Maryland. Harris and Sims lived together in Columbia, where they counted the drug proceeds and stored.
On April 19, 2013, law enforcement executed a search warrant at Harris and Sims’ residence and recovered a money counter, 17 kilograms of marijuana, and a 9mm handgun.
Jermaine McGregor, age 37, of Inglewood, California, and Jennifer Simms, age 33, of Columbia, Maryland previously pleaded guilty to their roles in the conspiracy. McGregor was sentenced to 30 months 14 days in prison, and Sims was sentenced to four years of probation.
United States Attorney Rod J. Rosenstein praised HSI Baltimore, the Maryland State Police and Pennsylvania State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Nicolas A. Mitchell and Bryan E. Foreman, who prosecuted the case.
Co-owner of Orange Village company pleads guilty to tax chargesRead the Press Release
The co-owner of a sewage and plumbing business in Oakwood Village pleaded guilty this week to tax charges, law enforcement officials said.
Remo DiFranco is scheduled to be sentenced on June 16. He pleaded guilty to two counts of conspiracy to defraud the IRS.
DiFranco, along with two other people and the company where he worked, conspired between 2007 and 2012. DiFranco and other employees prepared checks to a company for specific amounts and falsely classified the payments as rent and material expenses. DiFranco and another executive signed and filed tax returns for years 2007 through 2011 knowing the tax returns understated the company’s income and overstated its expenses, according to court documents.
“Conspiring to impede the IRS by creating business checks for expenses that were not incurred and receiving a kickback from those fraudulent business checks is not tax savings, but rather a recipe for criminal prosecution,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
This case is being prosecuted by Assistant U.S. Attorney Antoinette Bacon following an investigation by the Internal Revenue Service – Criminal Investigations.
Cincinnati Man Sentenced for Stealing Special Agent’s Identity in connection with eBay and PayPal SchemeRead the Press Release
ALEXANDRIA, Va. – Rohit Jawa, 25, formerly of Cincinnati, Ohio, was sentenced today to 48 months in prison for wire fraud and aggravated identity theft.
Jawa pleaded guilty on Nov. 17, 2015. According to court documents, from at least February 2013 through June 16, 2015, the defendant devised and executed a complex identity theft scheme to defraud financial institutions, insurance companies, and others. The defendant managed numerous PayPal accounts that were engaged in a scheme to defraud eBay buyers and eBay’s third-party parcel insurance company. During this period, the defendant repeatedly transferred money representing the proceeds of his fraud scheme from and between accounts he controlled in victim names to accounts he controlled in his own name. In connection with this scheme, the defendant stole the identity of a Special Agent of the United States Postal Service Office of Inspector General (USPS OIG), and then used that identity to fraudulently gain access to law enforcement databases from which he stole personal identifying information of multiple victims. The defendant then used the identifying information of those individuals to open further fraudulent financial accounts in their names, without their knowledge or consent.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; and Rico Medina, Deputy Assistant Inspector General for Investigations for USPS OIG, made the announcement after sentencing by U.S. District Judge Anthony J. Trenga.
This case was investigated by the FBI’s Washington Field Office Cyber Task Force. Assistant U.S. Attorney Whitney Dougherty Russell 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-239.
California Man sentenced to 10 years in prison for drug and money laundering conspiracyRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that Joseph Cecil, aka “Kevin Dupree,” 53, of Sacramento, California, was sentenced to 10 years in prison, followed by five years of supervised release. Cecil pleaded guilty on December 22, 2015, to conspiracy to distribute methamphetamine and heroin and conspiracy to launder money. His co-conspirator, Stacy Johnson also pleaded guilty to conspiracy to launder money and awaits sentencing on May 31, 2016.
According to court documents, Cecil has a long history of violating the laws related to illegal drug possession, trafficking, and money laundering.
Between January 2013 and January 2015, Cecil entered into an agreement with Johnson and others to distribute methamphetamine and heroin throughout Alaska. Cecil orchestrated a system wherein the drugs were sent to Alaska from California. Cecil himself then took possession of these drugs with the intent to distribute them in Alaska communities.
Furthermore, Cecil conspired with the others to launder the proceeds of the drug sales in an attempt to conceal and disguise the nature, source, ownership, and control of the funds. Cecil, Johnson, and others laundered money knowing that the money represented the proceeds of drug sales. Cecil arranged for his co-defendants to use a series of bank accounts to move money made from the sale of heroin and methamphetamine. Proceeds were deposited in Alaska and withdrawn in California. In other instances, Cecil instructed members of the group to send drug sale proceeds via Western Union and Money Gram wire transfers. Thousands of dollars were transferred from Alaska to California using these methods of money transfer. This money laundering activity also further supported the distribution of heroin and methamphetamine in Alaska.
The case was prosecuted by Assistant U.S. Attorney Stephan Collins, Lead Organized Crime and Drug Enforcement Task Force Attorney for the District of Alaska. The case was investigated by the Organized Crime Drug Enforcement Task Force which includes the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Internal Revenue Service Criminal Investigation (IRS-CI), and Homeland Security Investigations (HSI).
Beatrice Woman Charged with Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney, Deborah R. Gilg, announced that on March 24, 2016, an indictment was unsealed charging Quirstin Marie Gross, 24, of Beatrice, with conspiracy to distribute and possess with the intent to distribute 50 grams or more of a substance containing methamphetamine between December 1, 2013, and October 31, 2015. The charge carries a possible penalty of not less than five years, and not more than 40 years imprisonment, and a fine of up to $5,000,000. Following any prison term, there would be a term of supervised release of at least four years.
Gross had an initial appearance in federal court in Lincoln on March 28, 2016. She is scheduled for trial beginning on May 31, 2015, and she was ordered detained pending trial.
This case was investigated by the Lincoln/Lancaster County Drug Task Force and the Metro Fugitive Task Force.
Appleton Felon Sentenced to 5 Years in Prison for Firearm PossessionRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on March 24, 2016, Kong Vang (age: 21) of Appleton, Wisconsin, was sentenced to 60 months in federal prison by Chief United States District Judge William C. Griesbach. Vang previously entered a guilty plea to an indictment charging him with being a felon in possession of a firearm.
On May 25, 2015, a Federal Firearms Licensed dealer in Oshkosh was burglarized and eleven firearms were stolen. Vang agreed to sell several of the firearms on behalf of the burglars in exchange for money or drugs. In pronouncing sentence, Chief Judge Griesbach noted the very serious nature of the offense, the number of stolen firearms involved, the defendant’s sale of firearms to individuals prohibited from purchasing them legally, and the defendant’s prior criminal history for drug dealing.
The case was investigated by the Lake Winnebago Area Metropolitan Enforcement Group and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Assistant United States Attorney Daniel R. Humble.
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Anchorage Man sentenced to 18 years in prison for attempting to sexually exploit children in CambodiaRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that an Anchorage man was sentenced Thursday for attempting to sexually exploit children in Cambodia over the course of four years and attempting to arrange a child sex tourism trip for himself and others to Cambodia.
During yesterday’s all day sentencing hearing, Jason Jayavarman, 46, was fined $50,000, sentenced to 18 years in prison and ordered to submit to supervised release for life by U.S. District Judge Sharon L. Gleason. Jayavarman was convicted in March 2015 of attempted sexual exploitation of a child for the purpose of producing child pornography, and of attempted travel with the intent to aid and abet others to engage in illicit sexual conduct in a foreign place.
The evidence presented at trial established that over the course of 12 trips to Cambodia between 2010 and his arrest in 2013, Jayavarman produced multiple videos of himself engaging in sexual acts with an individual who he believed to be a child. Jayavarman then transported the recordings back to the United States.
According to trial evidence, Jayavarman also planned a trip for himself and others to Cambodia for the purpose of engaging in sexual activity with children as young as 12 years old. Trial evidence demonstrated that Jayavarman explained to one of the other potential travelers – who was an undercover FBI agent – how to groom a child for sex, avoid law enforcement detection and record high quality “mementos” of the sexual abuse.
Jayavarman’s child exploitation activities came to light following a concerned citizen’s anonymous tip to Crime Stoppers.
The FBI and the Anchorage Police Department investigated the case. Assistant U.S. Attorney Audrey J. Renschen and Trial Attorney Ravi Sinha of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood combines federal, state and local resources to better identify, 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.
Albuquerque Man Pleads Guilty to Federal Mail Theft ChargeRead the Press Release
ALBUQUERQUE – David G. Martin, 29, of Albuquerque, N.M., pleaded guilty today in federal court to a theft of mail charge.
Martin was arrested on Jan. 20, 2016, on a criminal complaint charging him with theft of mail. The complaint alleged that on Dec. 30, 2015, Martin unlawfully possessed a large quantity of mail that did not belong to him and a Unite States Postal Service (USPS) Neighborhood Delivery Collection Box Unit (NDCBU). When found in possession of these items, Martin was in a truck that had been reported stolen. A search of the truck revealed that it contained hundreds of pieces of U.S. mail and their content, credit cards and identification that did not belong to Martin.
Martin was subsequently indicted on Feb. 9, 2016, and charged with theft or receipt of stolen mail on Dec. 30, 2015, in Bernalillo County, N.M. During today’s proceedings, Martin pled guilty to the indictment without the benefit of a plea agreement.
At sentencing, Martin faces a maximum penalty of five years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the U.S. Postal Inspection Service and the Albuquerque Police Department and is being prosecuted by Assistant U.S. Attorney Nicholas Jon Ganjei.
Alaska Man Sentenced to 216 Months for Attempting to Sexually Exploit Children in CambodiaRead the Press Release
An Anchorage, Alaska, man was sentenced for attempting to sexually exploit children in Cambodia over the course of four years and attempting to arrange a child sex tourism trip for himself and others to Cambodia, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Karen L. Loeffler of the District of Alaska.
Jason Jayavarman, 45, was sentenced yesterday to serve 216 months in prison and a lifetime term of supervised release by U.S. District Judge Sharon L. Gleason of the District of Alaska for his March 2015 conviction of attempted sexual exploitation of children and attempted travel with the intent to engage in illicit sexual conduct in a foreign place.
The evidence presented at trial established that over the course of 12 trips to Cambodia between 2010 and his arrest in 2013, Jayavarman produced multiple videos of himself engaging in sexual acts with an individual who he believed to be a child. Jayavarman then transported the recordings back to the United States.
According to trial evidence, Jayavarman also planned a trip for himself and others to Cambodia for the purpose of engaging in sexual activity with children as young as 12 years old. Trial evidence demonstrated that Jayavarman explained to one of the other potential travelers – who was an undercover FBI agent – how to groom a child for sex, avoid law enforcement detection and record high quality “mementos” of the sexual abuse.
Jayavarman’s child exploitation activities came to light following a concerned citizen’s anonymous tip to Crime Stoppers.
The FBI and the Anchorage Police Department investigated the case. Trial Attorney Ravi Sinha of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Audrey J. Renschen of the District of Alaska prosecuted the case.
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 CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
24 March 2016
Wilmington Heroin Traffickers IndictedRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Willie Brothers Jr., and Raheem Ridley, both of Wilmington, were indicted on March 11, 2016, for conspiracy to distribute over 100 grams of heroin. Brothers faces a maximum sentence of 40 years in prison, a fine of $5,000,000, and 4 years of supervised release following a prison sentence. Ridley’s charges expose him to a maximum sentence of life in prison, a fine of $8,000,000, and 8 years of supervised release for heroin trafficking. Ridley was also indicted for the illegal possession of a handgun, for which he faces an additional maximum penalty of ten years in prison, a fine of $250,000, and 3 years of supervised release.
According to statements made at Brothers’ initial appearance earlier today, Brothers and Ridley conspired to package together heroin that they purchased in bulk. Before placing the heroin in bags, they would add Fentanyl to the heroin. Fentanyl is an opioid that been linked to the sharp increase in heroin-related overdose deaths in the region, and across the country.
U.S. Attorney Oberly commented, “I am pleased to see the successful cooperation and effort between member agencies of our local HIDTA. The joint efforts of law enforcement agencies are making and will continue to make a difference in the City of Wilmington and its surrounding area.”
“The cooperation among law enforcement won’t stop with these indictments,” said FBI Special Agent in Charge Kevin Perkins. “If you want to traffic heroin, do so at your own risk; we will be coming after you next. I want this indictment to send a clear message to drug traffickers that we are united in this fight and our resolve is unwavering.”
Cecil County Maryland Sheriff Scott Adams commented, "I second the sentiments of U.S. Attorney Oberly. The partnerships we have formed with HIDTA have stopped large quantities of heroin from reaching the streets of Cecil County. I applaud the work of all my law enforcement partners."
This indictment is the result of significant cooperation between High Intensity Drug Trafficking Area (“HIDTA”) program law enforcement agencies. The investigation is led by the Federal Bureau of Investigation’s Delaware Safe Streets Task Force and the Cecil County Drug Taskforce, with significant assistance from the Wilmington Police Department, Delaware State Attorney General’s Office and Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). The FBI Safe Streets Task Force is a coalition of federal, state, and local law enforcement agencies. This case continues to be investigated and is being prosecuted by Special Assistant United States Attorney Christopher L. de Barrena-Sarobe.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
United States and Tennessee File Suit Against Lenoir City Chiropractor and Manchester PhysicianRead the Press Release
The United States and Tennessee filed suit in U.S. District Court in Nashville today, alleging that Matthew Anderson, a Chiropractor from Lenoir City, Tenn., and David Florence, a Doctor of Osteopathy from Manchester, Tenn., made fraudulent claims to Medicare and TennCare in violation of the False Claims Act and the Tennessee Medicaid False Claims Act, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. The suit also names the Cookeville Center for Pain Management; Preferred Pain Center of Grundy County; McMinnville Pain Relief Center; and PMC Management; and claims that the defendants have been unjustly enriched and caused Medicare and TennCare to pay out money through mistake of fact.
“The U.S. Attorney’s Office will work with our federal and state partners and aggressively pursue those who seek to profit at the expense of taxpayers,” said U.S. Attorney David Rivera. “It is imperative that those who profit from dispensing pain medication always consider the well-being of patients as well as the addiction epidemic facing this country.”
Anderson is a chiropractor who operated four pain clinics in Tennessee. Although several of these clinics changed names at times, they were recently known as Cookeville Center for Pain Management; Spinal Pain Solutions in Harriman, Tenn; Preferred Pain Center of Grundy County in Gruetli Laager, Tenn; and McMinnville Pain Relief Center. Anderson operated these clinics both on his own and later through his management company, PMC Management. All of the clinics are now closed, except that the clinic in Harriman, Tenn. now operates under a new name with new owners.
According to the complaint, Anderson believed that medical clinics had to have a physician owner, so he recruited several physicians to serve as the sham owners of the four pain clinics, while Anderson, and later his company PMC, managed the clinics. In fact, according to the complaint, Anderson was the true owner who controlled the pain clinics during the entire time they were in operation.
The complaint alleges that the four pain clinics engaged in the following fraud schemes:
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Anderson operated Cookeville Center for Pain Management as a pill mill in which a nurse practitioner wrote prescriptions for controlled substances for Medicare and TennCare patients that had no legitimate medical purpose. Medicare and TennCare ultimately paid for those prescriptions, which were not allowable under Program rules.
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Anderson instructed employees at the four pain clinics to upcode office visits, by assigning an inaccurate billing code to increase Medicare reimbursement.
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Anderson continued to allow the pain clinics in Cookeville and Harriman to operate as pain management clinics and bill Medicare for services during a period in 2012 in which medical directors were not on site for the minimum time during operating hours as required by Tennessee law governing pain management clinics.As a result, according to the complaint, Medicare paid for non-reimbursable office visits, injections, and controlled substances prescriptions written by nurse practitioners at the clinics, without the required oversight of a medical director.
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In addition, David Florence, a doctor of osteopathy in Manchester, Tenn., who was one of the sham physician owners, also ran a pill mill out of his Center for Advanced Medicine in Manchester.
According to the complaint, Anderson reaped over $5 million from the four pain clinics, and took over 90% of the pain clinics’ profits, while the sham physicians only earned a salary for their service as medical directors. The government alleges that the scheme defrauded Medicare and TennCare of at least $1 million. The United States and Tennessee are seeking to recover treble damages plus penalties pursuant to the False Claims Act.
"These defendants allegedly supplied narcotics to patients without regard to medical need," said Derrick L. Jackson, the Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "The result was an expansion of abuse and addiction to controlled substances which enriched the defendants at the expense of the taxpayers."
“Our office is dedicated to fighting Tennessee’s prescription drug crisis with every tool at our disposal,” said Tennessee Attorney General Herbert H. Slatery III. “Pursuing individuals who attempt to take advantage of the system serves as a deterrent and helps protect the integrity of our healthcare programs.”
“Like many states, Tennessee is battling a prescription drug epidemic,” said TBI Director Mark Gwyn. “We want to hold those accountable who unnecessarily provide prescription drugs with no regard for the taxpayer’s dime and ensure legal medications get in the hands of citizens who really need them.”
The allegations in today’s complaint were originally raised in a lawsuit filed by the former office manager in the Cookeville pain clinic. She brought her claims under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery.
The case was investigated by the Department of Health and Human Services, Office of Inspector General, and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Ellen Bowden McIntyre represents the United States, and Assistant Attorney General Philip Bangle represents Tennessee.
The case is docketed as United States ex rel. Norris v. Anderson, No. 3:12-cv-00035 (M.D. Tenn.). The claims in the complaint are allegations only, and there has been no determination of liability.
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