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Monday 7 December 2015
Oregon U.S. Attorney's Office Collects $9,015,581.57 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
PORTLAND, Ore. - Acting U.S. Attorney Billy J. Williams announced today that the District of Oregon collected $8,495,950.20 in criminal and civil actions in Fiscal Year 2015. This includes work that Oregon conducted with other U.S. Attorney’s Offices and components of the Department of Justice to collect $2,401,688.23 in cases pursued jointly with these offices.
Attorney General Loretta E. Lynch announced on December 3, 2015, that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources and protecting the American people from exploitation and abuse,” said Attorney General Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“The work done by the Asset Recovery and Money Laundering Division of the Oregon U.S. Attorney’s Office is critically important to the mission of the Department of Justice,” said Acting U.S. Attorney Billy Williams. “It handles thousands of cases annually, and through persistent investigations uncovers leads to hidden assets, successfully garnishes wages, and works out payment plans with cooperative civil and criminal debtors. This dedication results in the collection of millions of dollars for crime victims and protects scarce taxpayer resources each year.”
One of the larger recoveries in the District of Oregon last year was in United States v. Rachel Lee, a “sweetheart swindle” case in which a family of swindlers executed a complex, decade-long $15.5 million fraud and money laundering scheme against a vulnerable timber heir. After gaining his confidence (and access to his financial accounts), the defendants callously spent the victim’s assets on a luxury lifestyle. Over $1.9 million was recovered for the victim during the last fiscal year, and rigorous recovery efforts in the case continue.
Another large recovery came in United States v. Schrader, a case in which the defendant, a senior vice president at his company, submitted over $1.4 million in fraudulent expense reports to his accounting department. To date, over $701,000 has been recovered for the victim, largely from the sale of rental properties the defendant owned. This recovery came despite the defendant’s attempts to thwart the government’s ability to sell and distribute certain property proceeds to his victim. The day after defendant’s sentencing, his attorneys contacted prosecutors to inform them that one of the properties was owned equally by the defendant and an associate, and to request that only fifty percent of the sale proceeds be applied to the defendant’s restitution obligation. After confirming that the defendant’s associate was not listed in county property records, prosecutors refused the request, and later learned from the defendant’s associate that the defendant had approached him just days earlier to ask him to sign and backdate an “ownership contract.” The U.S. Attorney’s Office was ultimately able to return the full proceeds from the sale of the property to the defendant’s victim.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the District of Oregon, working with partner agencies and divisions, collected $3,012,629.00 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Asset Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes. During FY 2015, $2,492,997.63 was returned to victims through the Asset Forfeiture Fund.
Operator of Inland Empire Loan Modification Scam that Targeted Distressed Homeowners Sentenced to 18 Years in Federal PrisonRead the Press Release
RIVERSIDE, California – The founder and co-owner of a Rancho Cucamonga business was sentenced today to 18 years in federal prison for orchestrating a scheme that offered bogus loan modification programs to thousands of financially distressed homeowners who lost more than $7 million when they paid for services that were never provided.
Andrea Ramirez, 47, of Rancho Cucamonga, was sentenced today by United States District Judge Virginia A. Phillips, who also ordered the defendant to pay $6,764,743 in restitution.
Ramirez was the organizer of a telemarketing operation known under a series of names – including 21st Century Legal Services, Inc. – that bilked more than 4,000 homeowners across the nation, many of whom lost their homes to foreclosure. Ramirez was sentenced today after pleading guilty to one count of conspiracy to commit mail fraud and wire fraud.
“This fraudulent company purposely targeted homeowners who were extremely vulnerable because they were facing foreclosure,” said United States Attorney Eileen M. Decker. “Ramirez and her co-defendants made false promises to desperate homeowners, often took the last of their money and then abandoned them. Her contempt for her victims will put her in federal prison for nearly two decades.”
Previously in this case, the other co-owner of 21st Century – Christopher Paul George, 45, of Rancho Cucamonga, was sentenced by Judge Phillips to 20 years in federal prison.
A total of 11 defendants linked to 21st Century have been convicted of federal fraud charges as a result of an investigation conducted by the Federal Bureau of Investigation; IRS - Criminal Investigation; the United States Postal Inspection Service; the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Federal Housing Finance Agency, Office of Inspector General.
“As the ringleader in a scheme to dupe thousands of distressed homeowners out of their last dollar at the height of the financial crisis, Andrea Ramirez earned the next 18 years in federal prison, which she should use to reflect on her victims,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
During a 15-month period that began in the middle of 2008, Ramirez operated 21st Century, which defrauded financially distressed homeowners by making false promises and guarantees regarding 21st Century’s ability to negotiate loan modifications for homeowners. Employees of 21st Century made numerous misrepresentations to victims during the course of the scheme, including falsely telling victims that 21st Century was operating a loan modification program sponsored by the United States government. Victims were generally instructed to stop communicating with their mortgage lenders and to cease making their mortgage payments.
21st Century employees contacted distressed homeowners through cold calls, newspaper ads and mailings. The company also controlled websites that advertised loan modification services. Once they contacted the distressed homeowners, 21st Century employees often falsely told clients that the company was operating through a federal government program, that they would be able to obtain new mortgages with specific interest rates and reduced payments, and that attorneys would negotiate loan modifications with their lenders. 21st Century employees regularly instructed financially distressed homeowners to cease making mortgage payments to their lenders and to cut off all contact with their lenders because they were being represented by 21st Century. On some occasions, 21st Century employees told homeowners that 21st Century was using the fees paid by the homeowner to make mortgage payments, when Ramirez, George and their co-defendants simply were pocketing the homeowners’ money.
After federal authorities executed a search warrant at 21st Century, Ramirez relocated 21st Century’s offices, renamed the company and made it appear it was operating out of Las Vegas, Nevada.
“Fraudulent mortgage fraud schemes affect consumers at the most basic level, jeopardizing their ability to retain ownership of their homes,” said Robert Wemyss, Inspector in Charge of the U.S. Postal Inspection Service – Los Angeles Division. “The U.S. Postal Inspection Service will continue to investigate these crimes to protect consumers and our nation's mail system from being used for illegal or dangerous purposes.”
Special Agent in Charge Erick Martinez of IRS-Criminal Investigation of the Los Angeles Field Office stated: “Ms. Ramirez took advantage of unsuspecting homeowners hoping to keep a roof over their heads. Hopefully she will now understand that her irresponsible actions have real consequences.”
In addition to Ramirez and George, nine other defendants have been convicted for their roles in the 21st Century scam. They are:
• Crystal Taiwana Buck, 40, of Long Beach, who persuaded numerous victims to pay fees to 21st Century, was sentenced to five years in prison;
• Albert DiRoberto, 62, of Fullerton, who handled both sales and marketing – which included making a commercial for 21st Century – was sentenced to five years in prison;
• Yadira Garcia Padilla, 38, of Rancho Cucamonga – who, among other things, posted bogus positive reviews about 21st Century on the Internet – was sentenced to four years in prison;
• Michael Bruce Bates, of Moreno Valley, was sentenced to one year and one day in prison;
• Michael Lewis Parker, of Pomona, was sentenced to six years in prison;
• Catalina Deleon, of Glendora, is scheduled to be sentenced on December 14;
• Hamid Reza Shalviri, of Montebello, is scheduled to be sentenced on Thursday, December 10;
• Mindy Sue Holt, of San Bernardino, was sentenced to 18 months in prison; and
• Iris Melissa Pelayo, of Upland, was sentenced to four years in prison.
O.C. Firefighter Sentenced to over 11 Years in Federal Prison for Sending Money Abroad to Produce Sexually Explicit Photos of GirlsRead the Press Release
SANTA ANA, California – A commercial firefighter who resides in Huntington Beach has been sentenced to 135 months in federal prison for attempting to produce child pornography by sending money to the Philippines to purchase a camera to take sexually explicit photos of a 13-year-old girl and her friend.
John McArthur, 57, was sentenced Friday afternoon by United States District Judge Josephine L. Staton.
McArthur pleaded guilty in May to one count of attempted production of child pornography.
“This defendant’s deviant crime sought to prey on the most vulnerable victims in society – children,” said United States Attorney Eileen M. Decker. “As demonstrated by the sentence that will send Mr. McArthur to prison for well over a decade, there are lengthy prison sentences associated with child pornography crimes like this defendant’s, and these penalties are designed to punish offenders and serve as a warning to others who might consider producing, trafficking or possessing child pornography.”
McArthur had online conversations with a person he believed was a 13-year-old girl in the Philippines in January 2012. During those online conversations, McArthur agreed to send money for the purchase of a camera that would be used to take sexually explicit photographs of the girl and an 11-year-old friend. McArthur later went to a Western Union agent in Wilmington to transfer the money to the 13-year-old girl.
At the time, McArthur was not aware that the person posing as the 13-year-old girl was Robert Oliver Clark, 75, another United States citizen who was residing in the Philippines. Clark was arrested in September 2014 in a related case, and he has been sentenced to 97 months in federal prison for possession of child pornography. In his case, Clark admitted that he “possessed, in his computer hard drive and in his email accounts, 5,443 images and 53 videos of child pornography, including 43 images and 1 video portraying sadistic or masochistic conduct and 16 images portraying toddlers.”
During the investigation, law enforcement authorities discovered that McArthur received hundreds of images and several videos of child pornography through his email accounts.
The investigation into McArthur and Clark was conducted by the United States Postal Inspection Service, which received substantial assistance from the U.S. Department of State, Diplomatic Security Service; U.S. Immigration and Customs Enforcement's Homeland Security Investigations; and the Los Angeles Joint Regional Intelligence Center.
“Protecting children from crimes of sexual abuse and exploitation is a priority for the U.S. Postal Inspection Service,” stated Robert Wemyss, Inspector in Charge for the Los Angeles Division. “I’m proud of the work of the Postal Inspection Service and our investigative partners to bring child predators to justice. U.S. Postal Inspectors have investigated these crimes for more than a century. While the predators’ use of technology has evolved, the core harm has not changed: a child’s lost innocence. We will not lose sight of this, and remain steadfast in our efforts to investigate, apprehend, and assist in the prosecution of those who seek to exploit children via the U.S. Mail, wherever in the world they may be.”
National City Man Sentenced to 55 Months in Prison for Robbing Imperial Beach Credit UnionRead the Press Release
Assistant U. S. Attorney Matthew Brehm (619) 546-8983
NEWS RELEASE SUMMARY – December 7, 2015
SAN DIEGO – Tulio David Gasca was sentenced today by U.S. District Judge John Houston to 55 months in prison for robbing a North Island Credit Union branch and then leading sheriff’s deputies on a 40-minute foot chase.
In his plea agreement, Gasca, 24, admitted that on March 5, 2015, at approximately 12:41 p.m., he entered the branch in Imperial Beach wearing a mask and approached a teller and said, “Give me your money!” Gasca took $4,210 and ran from the credit union.
An off-duty correctional officer chased after Gasca, who ran into an apartment complex across the street from the credit union, through its courtyard, and then out a gate into an alley. The correctional officer continued to pursue Gasca but lost sight of him. A canine unit responded to the courtyard and began to track Gasca.
Before the canine unit found the defendant, a San Diego County Sheriff’s helicopter arrived and its crew spotted Gasca a few blocks away from the credit union and apartment complex. A responding sheriff’s deputy attempted to stop Gasca. Gasca wrenched himself free from the deputy’s hold and ran from him.
When the deputy caught up to Gasca and tried to stun him with a taser, Gasca physically resisted, injuring the deputy. Gasca then fled toward 13th Street. At approximately 1:25 p.m., deputies found Gasca hiding in the backyard of a 13th Street residence, where they arrested him. The stolen money was not recovered at that time.
On March 6, 2015, a resident on 13th Street notified law enforcement that she found a large amount of currency when cleaning shelves located in her backyard, where Gasca was found the day before. Deputies returned to her home and recovered $3,862 and an email addressed to Gasca from beneath a shelf in the backyard.
DEFENDANT Case Number: 15CR0731-JAH
Tulio David Gasca Age: 24
SUMMARY OF CHARGE
Bank Robbery, in violation of Title 18, United States Code, Section 2113(a)
Maximum penalty: 20 years in prison
AGENCY
Federal Bureau of Investigation
San Diego County Sheriff’s Department
Naples Man Sentenced to 10 Years for Receiving and Distributing Child PornographyRead the Press Release
Fort Myers, Florida – Senior U.S. District Judge John E. Steele today sentenced Sean F. Desa (29, Naples) to 10 years in federal prison for receiving and distributing child pornography. The Court also ordered him to serve a life term of supervision and to register as a sex offender following his release from prison. He pleaded guilty on September 14, 2015.
According to court documents, Desa used an Internet file sharing program to receive and distribute child pornography. After a search warrant was executed at his residence, Desa was found to be in possession of hundreds of child pornography videos and images, including some depicting children in bondage.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Chief Assistant United States Attorney Jesus M. Casas.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Mother and son plead guilty to Federal heroin chargesRead the Press Release
HUNTINGTON, W.Va. – A mother and son who sold heroin from their home in Culloden, West Virginia, in 2014 and 2015 entered guilty pleas today in federal court in Huntington to separate drug charges, announced U.S. Attorney Booth Goodwin. Toni Lynn Cremeans, 41, pleaded guilty to distributing heroin, and her son, Shawn Paul Cremeans, 24, pleaded guilty to aiding and abetting the distribution of heroin.
From January of 2014 to May of 2015, Toni Cremeans, her husband, Sanford Dale Cremeans, and their son, Shawn Cremeans, conspired to sell heroin from their residence at 2246 3rd Street in Culloden. During that time period, Toni Cremeans frequently transported heroin to their residence where she and others would prepare it for distribution.
On December 2, 2014, a confidential informant contacted Shawn Cremeans to arrange a heroin purchase. The informant traveled to the Cremeans’ residence and met with Shawn and Sanford Cremeans while they waited for Toni Cremeans to arrive with additional heroin. Once Toni Cremeans arrived, the informant paid Shawn Cremeans and received half a gram of heroin from Sanford Cremeans. Toni Cremeans also admitted that she met with an informant at her residence on December 9, 2014, and sold the informant half a gram of heroin. Both Toni and Shawn Cremeans admitted that they were responsible for distributing a total of between 80 and 100 grams of heroin.
Toni Cremeans faces up to 20 years in federal prison and a $1 million fine when she is sentenced in federal court in Huntington on March 28, 2016. Shawn Cremeans also faces up to 20 years in federal prison and a $1 million fine when he is sentenced in federal court in Huntington on March 7, 2016.
Sanford Cremeans previously pleaded guilty in October to distributing heroin and is scheduled to be sentenced in federal court in Huntington on January 25, 2016.
The Huntington FBI Drug Task Force and Cabell County Sheriff’s Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Modesto Man Sentenced to 2 Years in Prison for Filing False Tax Returns Seeking More Than $620,000 in RefundsRead the Press Release
FRESNO, Calif. — United States District Judge Lawrence J. O’Neil sentenced Mark Threet, 52, of Modesto, today to two years in prison for making a false claim for a tax refund, United States Attorney Benjamin B. Wagner announced.
According to court documents, Threet filed more than 850 false tax returns for himself and others for the tax years 2008 to 2010. Each return included false statements regarding income, tax credits, and refund amounts. In sum, the returns claimed more than $620,000 for these false tax refunds. He received approximately $270,000, and has been ordered to pay restitution.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Patrick R. Delahunty is prosecuting the case.
Milwaukee Carjacker Sentenced to 50 Years ImprisonmentRead the Press Release
Acting United States Attorney Gregory J. Haanstad announced today that Milwaukee resident Grover Ferguson (age:18) was sentenced to 50 years of imprisonment, to be followed by 5 years of supervised release, for committing a carjacking on April 21, 2015, during which he shot the vehicle’s owner.
On August 25, 2015, Ferguson pleaded guilty to one count of armed motor vehicle robbery, in violation of 18 U.S.C. § 2119(2), and one count of discharging a firearm during a crime of violence, in violation of 18 U.S.C. § 924(c). According to the plea agreement, Ferguson approached a parked vehicle on April 21, 2015, pointed a revolver at the owner who was in the driver’s seat, and demanded the keys. Ferguson then fired several shots from the revolver, hitting the owner in the face and body. Ferguson drove away in the vehicle, but was captured the following day after leading Milwaukee Police officers on a high-speed chase.
At the sentencing hearing, U.S. District Judge Rudolph T. Randa emphasized the violent nature of the crime committed by Ferguson.
“Armed carjackings are a significant threat to public safety and we are going to continue to vigorously pursue cases like this as a part of our strategy to combat violent crime in this district,” Haanstad commented. “Carjackers who are prosecuted in federal court face decades in prison without the potential for parole.”
“As a result of this joint local and federal investigation, another violent individual has been removed from the streets of Milwaukee,” stated ATF-St. Paul Field Division Special Agent in Charge Jim Modzelewski. “ATF is committed to combating firearms violence and will continue to partner with the Milwaukee Police Department and utilize all available resources to increase the safety in our communities”.
Milwaukee Police Chief Edward Flynn added “We are grateful the Judge imposed a sentence commensurate with the crime that was committed and are hopeful this measure of justice is a comfort to the family and victim.”
This case was investigated by law enforcement officers from the Milwaukee Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). The case was prosecuted by Assistant United States Attorney Benjamin W. Proctor.
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Mayes County Felon Sentenced to 15 Years for Possessing Multiple Firearms and over 1,000 Rounds of AmmunitionRead the Press Release
TULSA, Okla.–Roy James Hudson, 29, of Mayes County, Okla., was sentenced by United States District Court Judge Claire V. Eagan to 15 years in prison for being a felon in possession of firearms and ammunition, announced United States Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.
On October 10, 2014, Mayes County Sheriff’s deputies searched Hudson’s home pursuant to a search warrant. The deputies found 12 firearms and over 1,000 rounds of ammunition. Nine of the recovered firearms had been stolen in a residential burglary earlier in the week. Two of the firearms, a shotgun and a rifle, had been shortened below the legal limit. Hudson had multiple prior felony convictions including three for burglary and one for escape.
This case was investigated by the Mayes County Sheriff’s Office, the Pryor Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Eric O. Johnston prosecuted on behalf of the United States.
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Man to Federal Prison for Iowa Meth ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was sentenced December 3, 2015, to more than six years in federal prison.
Joe Edward Leal, 49, from Hartley, Iowa, received the prison term after a September 1, 2015, guilty plea to conspiracy to distribute methamphetamine.
At the guilty plea, Leal admitted his involvement in a conspiracy from about July 2013 and continuing through May 2014 that distributed more than 50 grams of actual (pure) methamphetamine. On three occasions in January and February 2014, Leal distributed over 53 grams of actual (pure) methamphetamine to individuals cooperating with law enforcement.
Leal was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Leal was sentenced to 81 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
Leal is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by the Iowa Division of Narcotics Enforcement, Sheldon, Iowa Police Department, Iowa Great Lakes Drug Task Force, and Iowa Division of Criminalistics Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-4005.
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Man Sentenced for Endangered Sea Turtle ViolationRead the Press Release
St. Thomas, USVI – District Court Judge Curtis V. Gomez on December 4, 2015 sentenced Kisean Anthony Testamark, 44, also known as Sean Anthony Penn, of Coki Point, St. Thomas, to 45 days in prison and five years of supervised release for possession and transportation of a green sea turtle (Chelonia mydas), United States Attorney Ronald W. Sharpe announced. Judge Gomez also ordered Penn to perform 200 hours of community service.
On July 29, 2015, Penn pleaded guilty to possession and transportation of the green sea turtle, which is an endangered species under the Endangered Species Act. Court records show that on September 16, 2013, the U.S. Customs and Border Protection’s Marine Interdiction Unit was conducting routine border security patrol when Penn was observed in a small boat. The agents attempted to intercept Penn, but he maneuvered his boat close to the shoreline in an area where the agents’ vessel could not enter. Subsequently, after Penn complied with the agents’ directive and pulled his boat alongside the agents’ vessel, the agents saw a red cooler in Penn’s boat. When asked what was in the cooler, Penn dumped the contents of the cooler into the ocean. A diver from Coral World was recruited to search the area where Penn dumped his cooler, and recovered a decapitated green sea turtle with its shell removed.
This case was investigated by the National Oceanic and Atmospheric Administration (NOAA) Fisheries Office of Law Enforcement, the United States Customs and Border Protection, the Virgin Islands Department of Planning and Natural Resources, and the Virgin Islands Police Department. The case was prosecuted by Assistant United States Attorney Nelson L. Jones.
Los Angeles and Sacramento Men Sentenced to Two Years in Prison for Trafficking in Counterfeit Credit CardsRead the Press Release
FRESNO, Calif. — Gevorg Meroyan, 35, of Los Angeles, was sentenced today by United States District Judge Lawrence J. O'Neill to two years in prison for conspiracy to traffic in counterfeit credit cards and credit card fraud, United States Attorney Benjamin B. Wagner announced.
On November 16, 2015, co-defendant David Manukyan, 39, of Sacramento, was sentenced by Judge O’Neill to serve one year and one day in prison.
Both defendants pleaded guilty in July 2015. According to court documents, Meroyan conspired from 2009 to 2011 to produce, use, and traffic in counterfeit credit cards from the Los Angeles area to Sacramento. In 2009, Meroyan and Manukyan were caught in Fresno with 42 counterfeit cards bearing false names and with computer and other electronic equipment that can be used to manufacture counterfeit credit cards. In 2011, Meroyan was arrested in Los Angeles after attempting to buy auto parts with a counterfeit credit card.
This case was the product of an investigation by the Federal Bureau of Investigation, Fresno County Sheriff, and California Highway Patrol. Assistant United States Attorney Matthew G. Morris prosecuted the case.
Meroyan was ordered to surrender to the Bureau of Prisons on February 8, 2016, to begin serving his sentence. Manukyan was previously ordered to surrender to the Bureau of Prisons on January 5, 2016, to begin his sentence.
Local Prosecutor Becomes Commanding General of Army Reserve Command Supporting Multi-State RegionRead the Press Release
CEDAR RAPIDS, IA – Assistant United States Attorney, and Army Reserve Major General, Patrick J. Reinert, from Cedar Rapids, recently became the commanding general of the 88th Regional Support Command (RSC) during a change of command ceremony.
The 88th RSC, headquartered on Fort McCoy, Wisconsin, provides services and base operations support to more than 55,000 Army Reserve soldiers, civilians and families serving in 633 units at 278 sites dispersed across 19 states in the northern United States from the Ohio River Valley to the Pacific Coast.
Key services provided by the command include human resources, medical administration, funding, physical security, environmental compliance, training areas, safety, force management, equipment maintenance and storage, and facility management.
Reinert took command of the 88th RSC on December 4th. He acknowledged the complex world we live in and the necessity of having an Army Reserve that is ready to answer the nation’s call whenever needed. “This command is central to creating and sustaining readiness,” said General Reinert. “We are a critical component – and I know we are up to the challenge.”
“We greatly appreciate the values, leadership and unique skills all of our National Guard and Reserve service members bring to the Northern District of Iowa’s United States Attorney’s Office and the Department of Justice,” United States Attorney Kevin W. Techau offered. He also noted, “We stand proudly with them as they answer our nation’s call to defend our way of life. Their personal sacrifices are essential to the strength of our nation. General Reinert is the epitome of that service and sacrifice. He is a tremendous leader. ”
Reinert has proudly served the nation for more than 30 years as a commissioned officer. His most recent assignments have included commander of the U.S. Army Reserve Legal Command, commanding General of the Rule of Law Field Force in Afghanistan, and Commanding General of Combined Joint Inter-Agency Task Force 435 in Afghanistan.
In his civilian capacity, Reinert is the lead Organized Crime Drug Enforcement Task Force Attorney for the United States Attorney’s Office located in Cedar Rapids, and has been with that office for over 25 years.
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Local Man Gets 10 Years for Synthetic Narcotics TraffickingRead the Press Release
CORPUS CHRISTI, Texas - A 28-year-old residence of Corpus Christi had been ordered to federal prison following his convictions of possessing with the intent to distribute a synthetic cannabinoid and for being a felon in possession of a firearm, announced U.S. Attorney Kenneth Magidson. Abel Martinez pleaded guilty Sept. 15, 2015.
Today, Senior U.S. District Judge Haden Head sentenced Martinez to 120 months for the synthetic narcotics conviction and 120 months for the firearms charge. The sentences will be served concurrently and will be followed by four years of supervised release. The court also ordered a fine in the amount of $6,500. At the hearing, additional testimony was presented by expert witnesses from the Drug Enforcement Administration (DEA) including how the DEA handles newly emerging synthetic narcotics, the adverse effects of those substance, and imminent hazard they present to the public safety. In handing down the sentence on the synthetic narcotics count, the court upwardly departed and acknowledged to significant danger of synthetic narcotics, specifically the packaging claiming to be "legal" and the appeal to children with flavors such as "bubble gum.”
Martinez was arrested June 3, 2015. At the time of his arrest, law enforcement officers seized an SKS assault rifle, two loaded handguns, a stolen ballistic vest and approximately 700 packets of synthetic narcotics (aka “K2” or “Spice”). Laboratory analysis confirmed the presence of an emergency scheduled substance, AB-CHMINACA and 5F-AMB, controlled under the Controlled Substance Analog Act.
In federal custody since his arrest, Martinez will remain there pending transfer to a U.S. Bureau of Prisons facility to be designated in the near future.
The investigation was part of Operation Rusty Hook that was a coordinated effort by federal, state and local law enforcement to identify violent offenders, stop gun violence and protect the community. The Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Marshals Service, Corpus Christi Police Department Gang Unit and the Texas Department of Public Safety conducted the investigation.
Assistant U.S. Attorney Lance Watt is prosecuting the case.
Leon Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma, announced that GEORGE WILLIAM RUSSELL, age 38, of Leon, Oklahoma, pled guilty to DISTRIBUTION OF METHAMPHETAMINE, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C).
A Criminal Complaint filed in October, 2015, alleged that on or about May 29, 2015, within the Eastern District of Oklahoma, GEORGE WILLIAM RUSSELL did knowingly and intentionally commit the crime of Distribution of a Controlled Substance. The defendant was Indicted on November 3, 2015.
The charge arose from a joint investigation by the Ardmore Police Department, Carter County Sheriff’s Department and the Federal Bureau of Investigation.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
The statutory range of punishment is not less than up to 20 years imprisonment, up to $1,000,000.00 fine or both.
Assistant United States Attorney Melody Nelson represented the United States.
Justice Department Opens Pattern or Practice Investigation into the Chicago Police DepartmentRead the Press Release
Attorney General Loretta E. Lynch announced today that the Justice Department has opened a civil pattern or practice investigation into Chicago Police Department (CPD), pursuant to the Violent Crime Control and Law Enforcement Act of 1994. The department’s investigation of CPD will seek to determine whether there are systemic violations of the Constitution or federal law by officers of CPD. The investigation will focus on CPD’s use of force, including racial, ethnic and other disparities in use of force, and its systems of accountability.
“Building trust between law enforcement officers and the communities they serve is one of my highest priorities as Attorney General,” said Attorney General Lynch. “The Department of Justice intends to do everything we can to foster those bonds and create safer and fairer communities across the country. And regardless of the findings in this investigation, we will seek to work with local officials, residents, and law enforcement officers alike to ensure that the people of Chicago have the world-class police department they deserve.”
During the course of the investigation, the Justice Department will consider all relevant information, particularly the CPD’s policies, training and practices related to using, reporting, investigating and reviewing force. The Justice Department will also look into CPD’s practices related to disciplinary and other corrective action; and its practices related to intake and handling of allegations of misconduct.
"The Justice Department's investigation – opened with currently available, preliminary information – seeks to determine whether the Chicago Police Department's use of force practices and accountability systems comply with constitutional standards necessary to effectively serve its community and productively support its police officers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. ”In the coming months, we look forward to engaging directly with all stakeholders in Chicago – including the city's residents, law enforcement officers and public officials – as part of our fact-driven and thorough review.”
“Today's launch of this investigation marks an important and positive opportunity for Chicago and its police department," said U.S. Attorney Zachary T. Fardon for the Northern District of Illinois. “The U.S. Attorney's Office is fully committed to doing everything in our power, in partnership with our colleagues in the Civil Rights Division, to ensure that this process is a success.”
As part of the investigation the department will gather information directly from police officers and local officials; community members, and other criminal justice stake holders, such as public defenders and prosecutors. The department will also observe officer activities through ride-alongs and other means; as well as review documents and specific incidents that are relevant to the investigation. Pattern or practice investigations of police departments do not assess individual cases for potential criminal violations; instead they look at incidents for patterns created by systems and practices.
The Justice Department has taken similar steps involving a variety of state and local law enforcement agencies, both large and small, in jurisdictions throughout the United States. When investigations result in findings of systemic violations of federal law and the Constitution they have in many instances resulted in comprehensive, court-overseen agreements to fundamentally change the law enforcement agency’s police practices. When the department’s investigations do not result in findings of violations of federal law and the Constitution the department will close the investigation without an agreement.
This matter is being investigated by attorneys and staff from the Civil Rights Division with assistance from the U.S. Attorney’s Office for the Northern District of Illinois. They will be assisted by experienced law enforcement experts. The department welcomes the views of anyone wishing to provide relevant information.
Police Reform and Accountability Fact Sheet
How P&P Investigations Work
Justice Department Announces New Accreditation Policies to Advance Forensic ScienceRead the Press Release
Deputy Attorney General Sally Quillian Yates announced today that the Justice Department will, within the next five years, require department-run forensic labs to obtain and maintain accreditation and require all department prosecutors to use accredited labs to process forensic evidence when practicable. Additionally, the department has decided to use its grant funding mechanisms to encourage other labs around the country to pursue accreditation.
The new policies arose out of recommendations made by the National Commission of Forensic Science (NCFS), which was established to advance the field of forensic science and make suggestions to the Attorney General on how to ensure that reliable and scientifically valid evidence is used when solving crimes. The Attorney General made the decision to implement several of the commission’s recommendations last week and the Deputy Attorney General, who serves as co-chair of the NCFS, announced their adoption at a meeting of the commission today.
“The department believes that accreditation is one of the most important tools for ensuring that forensic science is practiced in a reliable, scientifically rigorous way,” said Deputy Attorney General Yates. “Accreditation provides valuable oversight by ensuring that someone outside the participating laboratory has confirmed that the lab is following their required procedures. We support accreditation and we want to expand accreditation as widely as possible.”
Though department forensic labs at ATF, DEA and FBI are already accredited, the new policy will ensure that, by 2020, those labs will have to maintain that accreditation. Also by 2020, department prosecutors will be required to use accredited forensic labs when it is practicable. The Executive Office for U.S. Attorneys (EOUSA) has been directed to develop guidance that will ensure the successful implementation of this new policy in the field.
The new policy does not apply to digital forensic labs. Instead, the Deputy Attorney General has asked the NCFS to develop separate recommendations on accrediting of labs that conduct digital forensic work, given the difference in the practices of forensic analysis of digital evidence.
As a result of the commission’s recommendations, the Attorney General also has directed two changes to the department’s grant funding in an effort to encourage and support state and local forensic labs in the process of becoming accredited. First, solicitations for both Edward Byrne Memorial Justice Assistance Grant funding and Paul Coverdell Forensic Science Improvement Grant funding will be re-drafted to make clear that applicants can use this money to seek accreditation, because labs have not always used these funds to seek accreditation. Second, relevant discretionary grant programs at the Office of Justice Programs will be modified to give preferences to labs that will use the money to obtain accreditation. These applicants will get a “plus factor,” increasing their likelihood of getting the money they need.
Accreditation assesses a forensic lab’s capacity to generate and interpret results in a particular forensic discipline and helps to ensure an ongoing compliance to industry and applicable international standards. An independent accrediting body assesses and monitors the quality of the lab’s management system by examining factors that include staff competence; method validation; appropriateness of test methods; calibration and maintenance of test equipment; testing environment and quality assurance data. Accreditation is one way to increase the quality of work and reducing the likelihood of errors.
Based on further recommendations by the NCFS, the Deputy Attorney General also announced that the department will help to establish an interagency working group aimed at bringing higher levels of scientific rigor and reliability to the field of medico-legal death investigation (MDI). The department has asked the White House’s Office of Science and Technology Policy to help convene the working group, which would focus on a broad range of MDI issues. Though the department does not conduct its own MDI– which is typically handled by state and local agencies – it believes an interagency group will help accomplish the goals of the NCFS in strengthening the MDI field.
Jury Finds Oklahoma City Man Guilty of 17 Counts of Theft of Mail by a Postal Service EmployeeRead the Press Release
Oklahoma City, Oklahoma – On Thursday, December 3, 2015, a federal jury found JEFFREY LEMON, JR., 30, from Oklahoma City, Oklahoma, guilty on 17 counts of theft of mail matter by a postal service employee, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to evidence at trial, Lemon was an employee at the U.S. Post Office in Warr Acres, Oklahoma. Evidence showed that between March 2015 and June 2015, Lemon stole money orders deposited in the mail by Postal Service customers, and cashed them for his benefit. The trial lasted for three days, and the jury deliberated for approximately 3 hours before finding Lemon guilty.
At sentencing, Lemon faces up to 5 years in prison for each of the guilty counts. A sentencing date will be set by the court. Reference is made to the court record for further information.
This case was the result of an investigation by the United States Postal Service Office of Inspector General. The case was prosecuted by Assistant U.S. Attorney Jessica L. Perry and Assistant U.S. Attorney Brandon Hale.
Junction City Man Re-Sentenced in Cocaine Trafficking CaseRead the Press Release
TOPEKA, KAN. – A Junction City man was sentenced Monday to 30 years in federal prison for trafficking cocaine in Junction City and Manhattan, U.S. Attorney Barry Grissom said today.
Albert Dwayne Banks, 33, Junction, City, Kan. was convicted on count one (conspiracy to distribute more than 280 grams of crack cocaine), count eight (distributing crack cocaine), count 11 (distribution crack cocaine), count 12 (distributing crack cocaine), count 15 (distributing crack cocaine) count 16 (distributing crack cocaine) and count 17 (distributing crack cocaine).
Last month, Banks was sentenced to life. At Monday’s hearing, U.S. District Judge Daniel D. Crabtree corrected the sentence by reducing it to 30 years. He said he changed the sentence based on his consideration of aggravating factors in the sentence.
Banks was convicted in June in a jury trial in Kansas City. During trial, prosecutors presented evidence that in late 2012 and early 2013 agents of Kansas Bureau of Investigation and detectives from the Junction City Police Department investigated a large crack cocaine trafficking organization in Junction City and Manhattan. The organization was led by defendants Albert Banks and co-defendant Anthony Thompson, who acquired drugs from three different suppliers and sold the drugs to distributors who resold them on the streets.
Grissom commended the Kansas Bureau of Investigation, the Junction City Police Department, the Geary County Attorney’s Office and Assistant U.S. Attorney Tony Mattivi for their work on the case.
Former Secret Service Agent Sentenced to 71 Months in Scheme Related to Silk Road InvestigationRead the Press Release
A former Secret Service special agent who had been a member of the Baltimore Silk Road Task Force was sentenced to 71 months in prison today on charges of money laundering and obstruction of justice.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Brian Stretch of the Northern District of California, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Department of Justice Office of the Inspector General’s Washington, D.C., Field Office and Special Agent in Charge James E. Ward of the Department of Homeland Security Office of the Inspector General’s Atlanta Field Office made the announcement.
U.S. District Judge Richard Seeborg of the Northern District of California sentenced Shaun W. Bridges, 33, of Laurel, Maryland, in San Francisco following his guilty plea to one count of money laundering and one count of obstructing justice. Judge Seeborg also ordered Bridges to forfeit $651,000.
Between 2012 and 2014, Bridges was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road, a covert online marketplace for illicit goods, primarily drugs. Bridges’s responsibilities included, among other things, conducting forensic computer investigations in an effort to locate, identify and prosecute targets, including Ross Ulbricht, aka Dread Pirate Roberts, who ran the Silk Road from the Northern District of California.
As part of his guilty plea, Bridges admitted to using account information that he obtained during the January 2013 search and arrest of Curtis Green, a customer support representative on Silk Road, to reset passwords and pins of various accounts on Silk Road and move approximately 20,000 bitcoin, at the time worth approximately $350,000, from those accounts into a bitcoin “wallet” that Bridges controlled. When Ulbricht learned that Green’s access to Silk Road had been used to transfer bitcoin from Silk Road into a wallet, Ulbricht cancelled Green’s administrator access to Silk Road and attempted to have him killed in retaliation for the bitcoin thefts.
Bridges admitted that he moved the stolen bitcoin into an account at Mt. Gox, an online digital currency exchange based in Japan, and that between March and May 2015, he liquidated the bitcoin into $820,000 in U.S. currency and had the funds transferred to a personal investment account in the United States. In June 2014, Bridges transferred money from the investment account into a personal bank account that he shared with another person.
Bridges also admitted that he used Green’s access to Silk Road to steal bitcoin from the site, thereby limiting Green’s access to further the Baltimore grand jury investigation of Ulbricht and Silk Road. Additionally, Bridges admitted that he made multiple false and misleading statements to both prosecutors and investigators in connection with the San Francisco grand jury investigation into his own illegal acts.
Bridges is the second of two federal agents to be sentenced in connection with the Baltimore Silk Road Task Force’s investigation into the Silk Road. Carl M. Force, 46, of Baltimore, was a special agent with the Drug Enforcement Administration who pleaded guilty on July 1, 2015, to a three-count information charging him with money laundering with predicates of wire fraud and theft of government property, obstruction of justice and extortion under color of official right, related to his theft and diversion of more than $700,000 in digital currency to which he gained control as part of undercover role on the Baltimore Silk Road Task Force. On Oct. 19, 2015, Judge Seeborg sentenced Force to 78 months in prison.
The FBI’s San Francisco Division, the IRS-CI San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington, D.C., are investigating the case. Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section are prosecuting the case. Assistant U.S. Attorney Arvon Perteet of the Northern District of California handled the asset forfeiture aspects of the case.
Former Secret Service Agent Sentenced to 71 Months’ Imprisonment in Scheme Related to Silk Road InvestigationRead the Press Release
SAN FRANCISCO – A former Secret Service special agent who had been a member of the Baltimore Silk Road Task Force was sentenced to prison on charges of money laundering and obstruction of justice announced Acting U.S. Attorney Brian Stretch, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson, Special Agent in Charge Michael P. Tompkins of the Department of Justice Office of the Inspector General’s Washington, D.C., Field Office, and Special Agent in Charge James E. Ward of the Department of Homeland Security-Office of the Inspector General’s Atlanta Field Office.
This afternoon, U.S. District Judge Richard Seeborg sentenced Shaun W. Bridges, 33, of Laurel, Maryland, to 71 months in prison following his guilty plea to one count of money laundering and one count of obstructing justice. Bridges was also ordered to forfeit more than $650,000.
Between 2012 and 2014, Bridges was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road. The Silk Road is a covert online marketplace for illicit goods, primarily drugs. Bridges’ responsibilities included, among other things, conducting forensic computer investigations in an effort to locate, identify, and prosecute targets, including Ross Ulbricht, aka Dread Pirate Roberts, who ran the Silk Road from the Northern District of California.
As part of his guilty plea, Bridges admitted to using account information that he obtained during the January 2013 search and arrest of Curtis Green, a customer support representative on Silk Road. Bridges used the information to reset passwords and pins of various accounts on Silk Road and move approximately 20,000 bitcoin, at the time worth approximately $350,000, from those accounts into a bitcoin “wallet” that Bridges controlled. When Ulbricht learned that Green’s access to Silk Road had been used to transfer bitcoin from Silk Road into a wallet, Ulbricht cancelled Green’s administrator access to Silk Road and attempted to have him killed in retaliation for the bitcoin thefts.
Bridges admitted that he moved the stolen bitcoin into an account at Mt. Gox, an online digital currency exchange based in Japan, and that between March and May 2015, he liquidated the bitcoin into $820,000 in U.S. currency and had the funds transferred to a personal investment account in the United States. In June 2014, Bridges transferred money from the investment account into a personal bank account that he shared with another person. Moreover, days after Bridges removed the illegally-obtained proceeds from Mt. Gox, he then served as an affiant in a warrant to enable federal authorities to seize Mt. Gox’s assets.
Bridges also admitted he used Green’s access to Silk Road to steal bitcoin from the site, thereby limiting Green’s access to further the Baltimore Grand Jury investigation of Ulbricht and Silk Road. Additionally, Bridges admitted that he made multiple false and misleading statements to both prosecutors and investigators in connection with the San Francisco Grand Jury investigation into his own illegal acts.
During the sentencing, Judge Seeborg stated, “nothing in [Bridges’] background mitigates the shocking and reprehensible abandonment of his public duty.” The judge found that a sentence on the high end of the sentencing guidelines was appropriate in light of Bridges’ “inexcusable” conduct which, the judge pointed out, might have gotten a witness killed.
Bridges is the second of two federal agents to be sentenced in connection with the Baltimore Silk Road Task Force’s investigation into the Silk Road. Carl M. Force, 46, of Baltimore, was a Special Agent with the Drug Enforcement Administration who pleaded guilty on July 1, 2015, to a three-count information charging him with money laundering with predicates of wire fraud and theft of government property, obstruction of justice, and extortion under color of official right, related to his theft and diversion of over $700,000 in digital currency to which he gained control as part of undercover role on the Baltimore Silk Road Task Force. On Oct. 19, 2015, Judge Seeborg sentenced Force to 78 months in prison.
The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, with the assistance of San Francisco Legal Assistant Daniel Charlier-Smith, Christine Tian, and Lance Libatique. Assistant U.S. Attorney Arvon Perteet assisted with Asset Forfeiture aspects of the case. The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General, and the Department of Homeland Security Office of the Inspector General in Washington D.C. The prosecution team is also thankful for the assistance of the following components for their support throughout the investigation of this case: IRS Criminal Investigation – New York Field Office, HSI’s Chicago/O’Hare Division, the U.S. Attorney’s Office for the Southern District of New York, the Department of Justice’s Computer Crime and Intellectual Property Section, the Financial Crimes Enforcement Network, the U.S. Embassy in Slovenia, and the FBI Legal Attaché Office in Tokyo, Japan.
Former Scranton Businessman Sentenced to 46 Months in Prison for Failing to Surrender and on Firearm ChargesRead the Press Release
WILKES-BARRE - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Joseph P. Donahue, age 61, was sentenced today to 46 months (3 years and 10 months) in prison by United States District Court Judge A. Richard Caputo in Wilkes-Barre. Donahue was convicted on September 2, 2015, of failing to surrender for service of a federal sentence, being a felon in possession of a firearm, being a fugitive from justice in possession of a firearm, and possession of a stolen firearm after a seven-day jury trial. The 46 month sentence is to be served consecutive to the sentence in the previous case.
According to United States Attorney Peter Smith, Donahue was previously convicted in March 2010 of bank fraud, money laundering, false statements and credit card fraud after a two week trial. In December 2010, United States District Court Judge James M. Munley sentenced Donahue to 121 months’ incarceration and ordered Donahue to surrender himself to begin serving that sentence on January 4, 2011. Donahue failed to report and a warrant for his arrest was issued. He was apprehended on January 20, 2011, by United States Marshals in Los Cruces, New Mexico when he was at a motel under an assumed identity and in possession of a stolen firearm.
At trial Donahue’s defense, in part, was that he failed to surrender to begin serving his sentence because he feared that he was being unfairly prosecuted by the government. He denied any knowledge of the firearm. The jury returned a verdict of guilty on all counts after deliberating approximately 3 hours.
The evidence at the 2010 trial proved that Donahue recruited shareholders, investors and partners in businesses that the defendant owned and controlled, offering them, in exchange for their paying a share of the operating expenses, a share in the profits. Donahue obtained credit cards from financial institutions, putting the credit cards in the names of the investors, for the purpose of paying for operating expenses.
Unknown to the investors, Donahue obtained additional credit cards and loans from financial institutions in the investors’ names by obtaining on-line credit card applications and by forging their names on the applications. Donahue then used these fraudulently-acquired credit cards to incur expenses to which the investors had not consented and for which they would be liable. By forging the investors' names to loan applications, Donahue also committed bank fraud and money laundering.
Donahue has been convicted three times within 26 years by three different federal juries in the Middle District of Pennsylvania and received prison sentences from three separate federal judges. He was previously convicted after a 1989 federal trial of conspiracy and failure to comply with monetary reporting requirements. That trial involved evidence that Donahue conspired with drug trafficker Frederick “Rik” Luytjes to smuggle millions of dollars out of the United States while avoiding reporting requirements and tax consequences for Luytjes. United States District Court Judge Richard P. Conaboy sentenced Donahue to a two year term of imprisonment for those crimes.
The investigation was a collaborative effort between the United States Marshals Service and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Todd K. Hinkley and Michelle L. Olshefski.
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Former Saline County Sheriff Pennington Sentenced to Prison Term for Wire FraudRead the Press Release
Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, along with David T. Resch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI), announced today that Bruce Pennington, age 64, of Fayetteville, Arkansas, the former Saline County Sheriff, was sentenced to one year plus one day of incarceration following his conviction for wire fraud. On August 3, 2015, Pennington pleaded guilty to a one-count Information charging him with wire fraud for using money from his campaign account to pay for personal items and expenses charged to his Sheriff’s Office Visa card.
Pennington held the office of Saline County Sheriff from 2008 until he resigned on October 1, 2013. At the sentencing hearing in open court on December 7, 2015, before U.S. District Court Judge Kristine G. Baker, Pennington received a sentencing enhancement for abusing a position of public trust. The maximum potential penalty for a violation of Title 18, United States Code, Section 1343 (wire fraud) is up to twenty years imprisonment, up to three years supervised release, and a fine of up to $250,000. Based on the United States Sentencing Guidelines, Pennington faced an advisory sentencing range of 12 to 18 months. Judge Baker sentenced Pennington to one year plus one day of incarceration, a $2,500 fine, three years supervised release, and a $100 special assessment.
The case was investigated by the Federal Bureau of Investigation’s Ark Trust Public Corruption Task Force. It was prosecuted by Assistant U.S. Attorney Julie Peters, in cooperation with Faulkner County Prosecuting Attorney Cody Hiland who is serving as a Special Prosecutor in Saline County Circuit Court Case No. 63CR-14-313.
Former North Randall police officer convicted of selling firearms to felonsRead the Press Release
A former police officer was convicted of illegally selling firearms to people he knew were felons, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Kevin R. Lumpkin, 29, of North Olmsted, is scheduled to be sentenced Feb. 29.
A jury convicted him after a weeklong trial of selling a Hi-Point .45-caliber rifle and a Ruger .380-caliber pistol on different occassions to people he knew were convicted of felonies and therefore forbidden from possessing a firearm. These sales took place between 2011 and 2013, when Lumpkin was a North Randall police officer, according to trial testimony.
This case is being prosecuted by Assistant U.S. Attorneys M. Kendra Klump and Edward Feran following an investigation by the FBI.
Former Night Club Bouncer Convicted of Identity Theft and Conspiracy to Defraud the United States for More Than $200,000Read the Press Release
United States Attorney Andrew M. Luger today announced the conviction of JOHN HUNTER, SR., 46, for conspiracy to defraud the United States, false claims and aggravated identity theft. A jury returned a guilty verdict after a four-day trial before Senior U.S. District Judge David S. Doty. A sentencing date has not been set.
As proven at trial, in February 2010, HUNTER, SR., filed a fraudulent 2009 tax return in his own name. In it, he falsely claimed that he had earned $13,000 in 2009 working at Club Rage, Inc., a company that owned a nightclub in Maplewood, Minnesota. Defendant also claimed that Club Rage withheld over $1,200 in taxes from his paychecks, and that he was entitled to an $8,222 tax refund. Though HUNTER, SR., had worked as a nightclub bouncer for Club Rage, he only earned just over $4,000 in wages in 2009 and had no taxes withheld from his paychecks that year. HUNTER, SR., ultimately received a refund of $7,646 based on this fraudulent tax return.
As proven at trial, HUNTER, SR., then filed fraudulent tax returns in the names of several dozen other people in the spring of 2010. HUNTER, SR., recruited tax filers and offered to file their returns and obtain refunds. However, the defendant prepared and filed those returns using fraudulent wage and employment information. HUNTER, SR., repeated a similar scheme in January 2012, in which he again filed fraudulent returns in his own name and that of others.
As proven at trial, HUNTER, SR., filed at least 45 fraudulent tax returns claiming more than $200,000 in tax refunds.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS, with substantial assistance from the Minnesota Department of Revenue.
This case is being prosecuted by Assistant U.S. Attorneys Joseph H. Thompson and Amber Brennan.
Defendant Information:
JOHN HUNTER, SR., 46
Eagan, Minn.
Convicted:
- Conspiracy to defraud the United States, 1 count
- False claims, 8 counts
- Aggravated identity theft, 2 counts
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former Deputy U.S. Marshal Sentenced to Federal Prison for Obstructing Justice by Lying to Investigators after Fatal ShootingRead the Press Release
LOS ANGELES – A former deputy U.S. marshal was sentenced today to 15 months in federal prison after being convicted of obstruction of justice – a charge stemming from lies he told to police after he fatally shot a man.
Matthew Itkowitz, 47, who now lives in Suffern, New York, was sentenced by United States District Judge Philip S. Gutierrez.
Itkowitz was found guilty of obstruction of justice by a federal jury in July. The conviction was based on false statements Itkowitz made to Los Angeles Police Department homicide detectives following his fatal shooting of a man in West Hollywood in March of 2008. Itkowitz falsely characterized an altercation that led to the shooting, and his version of events was contradicted by a video made by a security camera in the alley where the shooting took place.
In addition to obstruction of justice, Itkowitz was charged with violating the victim's constitutional rights to be free from the use of unreasonable force by a law enforcement officer. During the trial, Judge Gutierrez granted a defense motion for judgment of acquittal on that charge and a related gun charge. The jury that convicted Itkowitz also acquitted him of an obstruction of justice charge related to statements he made to a supervisor at the U.S. Marshals Service.
“Law enforcement officers are not above the law,” said United States Attorney Eileen M. Decker. “The actions of this defendant tarnished the outstanding work of law enforcement throughout the district and the nation and have earned him a significant federal prison sentence.”
The investigation into Itkowitz was conducted by the Federal Bureau of Investigation
Florida Woman Sentenced to Three and A Half Years in Prison for Role in $3 Million Time-Share Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Lake Worth, Florida, woman was sentenced today to 42 months in prison for her role in a $3 million conspiracy to scam customers by offering phony consulting services to owners of timeshares through the New Jersey-based Vacation Ownership Group LLC, U.S. Attorney Paul J. Fishman announced.
Genevieve Manzoni, 50, was previously convicted in September 2013 of one count of mail fraud and one count of conspiracy to commit mail and wire fraud. She was convicted following a seven-week trial before U.S. District Judge Noel L. Hillman, who imposed the sentence today in Camden federal court.
According to documents filed in this case and the evidence presented at trial:
Manzoni and her codefendants were part of a scheme to defraud hundreds of timeshare owners by offering fraudulent consulting services through Vacation Ownership Group (now VO Financial). Adam Lacerda, 31, of Egg Harbor Township, New Jersey, the company founder, president and chief executive officer, devised the company’s fraudulent sales pitches. He directed his sales force to tell numerous lies to VO customers, including that VO worked with the banks holding the customers’ loans, would use money sent by customers to pay off the customers’ loans on their timeshares, and could cancel customers’ timeshares with money back.
His wife, Ashley Lacerda, 36, the company vice president and chief operating officer, sent fraudulent contracts to customers and managed the office. Ian Resnick, 40, of Absecon, New Jersey, a convicted bank robber, started as a salesman giving the fraudulent sales pitch but became Adam Lacerda’s enforcer, with the title “director of compliance.” Manzoni was a top VO sales representative who falsely told one victim she worked with a bank, another victim that she worked with a timeshare developer.
All four defendants were convicted at the same trial. The 14 victims who testified – including business executives, veterans, senior citizens, a lawyer and a professor – were defrauded out of tens of thousands of dollars by the defendants’ sophisticated scheme.
In addition to the prison term, Judge Hillman ordered Manzoni to serve three years of supervised release and pay restitution of $174,842.13.
Adam Lacerda was sentenced to 27 years in prison on June 25, 2015. Ashley Lacerda and Resnick still await sentencing.
U.S. Attorney Fishman credited special agents of FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region, for the investigation. He also thanked the N.J. Department of Labor and Workforce Development for its assistance.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel:
Adam Lacerda: Mark E. Cedrone Esq., Philadelphia
Ashley Lacerda: Charles Nugent Esq., Marlton, New Jersey
Ian Resnick: Michael E. Reilly Esq., Philadelphia
Genevieve Manzoni: Ralph A. Jacobs Esq., Philadelphia
Federal jury finds Monroe men guilty of roles in methamphetamine conspiracyRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a federal jury found two men from Monroe guilty of their roles in a methamphetamine conspiracy.
Vacarra Rogers, 35, and Kevin Honeycutt, 36, both of Monroe, were found guilty last week of one count each of conspiracy to possess with intent to distribute methamphetamine. Honeycutt was also found guilty of one count of possession with intent to distribute methamphetamine and one count of possession of a firearm by a convicted felon. United States District Judge Robert G. James presided over the trial. After a two-day trial, the jury returned the guilty verdict after deliberating for approximately an hour.
Evidence admitted at trial showed that Rogers was arrested on August 2, 2014, on Louisiana state charges related to illegal possession and distribution of methamphetamine. Co-defendant Kendra Turner, 25, of Monroe, was driving the car at the time of the arrest. During an October 8, 2014 visit to the jail, Turner was heard on recorded jailhouse calls talking to Rogers about her driving to Texas to obtain methamphetamine. Later that day, Turner, Rogers and Honeycutt further discussed the trip. Turner was arrested on October 10, 2014 on her way back from Texas. Honeycutt was then arrested and admitted to waiting for a delivery of methamphetamine from Turner. Honeycutt then stated that he had obtained $5,000 from Ruby Jane McMillan, 29, of Farmerville, La., to purchase methamphetamine for her. Honeycutt set up a delivery of methamphetamine for McMillan, and she was later arrested.
Rogers and Honeycutt each face 10 years to life in prison for conspiracy. Honeycutt also faces 10 years to life in prison for possession with intent to distribute methamphetamine and up to 10 years in prison for felon in possession of a firearm. They each face five years of supervised release and a $1 million fine. A sentencing date of March 1, 2016 was set.
Turner pleaded guilty on July 10, 2015, and McMillan pleaded guilty September 12, 2015, to one count each of conspiracy. Turner and McMillan are scheduled to be sentenced on January 4, 2016.
Assistant U.S. Attorney Earl M. Campbell is prosecuting the case. The Drug Enforcement Administration and the Monroe Metro Narcotics Task Force investigated the case.
Federal Court Sentences Honduras Woman on Illegal Re-Entry ChargeRead the Press Release
DAVENPORT, IA - On December 4, 2015, Sandra Lagos Neda, age 51, a citizen of Honduras, was sentenced by United States District Court Judge Stephanie M. Rose to 12 months and one day in prison after pleading guilty to illegal re-entry into the United States, announced Acting United States Attorney Kevin E. VanderSchel. Lagos Neda was also ordered to pay $100 towards the Crime Victims Fund. After serving her sentence, Lagos Neda will be turned over to immigration authorities for deportation proceedings.
This matter was investigated by the United States Department of Homeland Security-Immigration and Customs Enforcement-Enforcement and Removal Operations, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Federal Court Sentences Clinton Man on Threating Communication ChargeRead the Press Release
DAVENPORT, IA - On December 4, 2015, Gerald W. Ledford, age 57, of Clinton, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to four years’ probation, with the first six months in home confinement, after pleading guilty to transmitting a threatening communication, announced Acting United States Attorney Kevin E. VanderSchel. Ledford was also ordered to pay $100 to the Crime Victims Fund, to have no contact with the Islamic Society of Boston Cultural Center or any of its employees, to allow a search of his residence under certain conditions, and to restrict his possession of a computer or access to the Internet without prior approval by the United States Probation Office.
On October 20, 2014, an employee of the Islamic Society of Boston Cultural Center (ISBCC) discovered two messages posted to the ISBCC’s Facebook page. The ISBCC is located in Roxbury, Massachusetts, and is a member of the New England Muslim community. According to its website, the ISBCC is not just a mosque, but a dynamic cultural center that is designed to serve the entire community by offering a variety of educational, spiritual, and social services. The first post made derogatory statements about "Mohamed," and made threats to harm Muslims. The second post also made a threat of violence toward Muslims.
The Facebook page posting these two messages displayed the name "Gerry Ledford" and was identified with a unique account identification number. This account was deactivated on November 14, 2014. A "friend" of this account was another Facebook publically viewable page under the name of "Gerry.ledford.3," also with a unique account identification number. Search warrants were obtained for both of these Facebook accounts. Based on information obtained from these search warrants these accounts had certain personal identifiers, such as date of birth, hometown, current city of residence, educational history and digital photographs that were consistent with the same personally identifiable information about Gerald Ledford. Both accounts logged in from an identified Internet Protocol (IP) address identified to a known family member of Ledford’s. Information obtained from the search warrants showed that one of these identified Facebook accounts conducted a search for the ISBCC on October 19, 2014. A day before the posted messages, one of these Facebook accounts was used to search for information about the "Islamic State of Iraq and the Levant" and two minutes later a search for information on the "Islamic Society of Boson Cultural Center (ISBCC)." Additional searches were conducted on similar topics both before and after October 19, 2014.
Gerald Ledford admitted in his plea proceeding that he was the individual user registered to these Facebook accounts, that on or about October 19, 2014, he knowingly posted these two threatening messages, and that he individually selected this victim because of the religious affiliation of ISBCC. Gerald Ledford further admitted that he knew that these two messages would be viewed as a threat.
This matter was investigated by the Federal Bureau of Investigations and the Clinton, Iowa, Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa and the United States Attorney’s Office for the District of Massachusetts.
Elkhart Man Pleads Guilty to Distributing Child PornRead the Press Release
WICHITA, KAN. – An Elkhart man pleaded guilty in federal court Monday to distributing child pornography, U.S. Attorney Barry Grissom said.
Daren Richard Coen, 69, Elkhart, Kan., pleaded guilty to two counts of distributing child pornography and one count of possessing child pornography. Prosecutors told U.S. District Judge J. Thomas Marten that Coen collected child pornography over the Internet using a file sharing network. A detective with the Wichita Police Department downloaded child pornography from Coen’s computer using the file sharing network. Investigators found child pornography on his computer when they executed a search warrant in May 2015 at Coen’s home in Elkhart.
Sentencing is set for Feb. 29. He faces a penalty of not less than five years and not more than 20 years and a fine up to $250,000 on each count of distributing child porn, and a maximum penalty of 10 years and a fine up to $250,000 on the possession count. Grissom commended the Wichita Police Department, the Kansas Internet Crimes Against Children Task Force, Homeland Security Investigations and Assistant U.S. Attorney Jason Hart for their work on the case.
Electrolux and General Electric Abandon Anticompetitive Appliance Transaction After Four-Week TrialRead the Press Release
Electrolux and General Electric Company announced today the termination of the agreement under which Electrolux was to purchase General Electric’s appliance business.
The department brought suit on July 1, 2015, to challenge the $3.3 billion acquisition because it would combine two of the leading manufacturers of ranges, cooktops and wall ovens sold in the United States, eliminating competition that benefits American consumers and home builders through lower prices and more options. Trial before the Honorable Emmet G. Sullivan began on Nov. 9 in the U.S. District Court for the District of Columbia.
“In the courtroom, facts matter,” said Deputy Assistant Attorney General David I. Gelfand of the Justice Department’s Antitrust Division. “Rhetoric does not. This deal was bad for the millions of consumers who buy cooking appliances every year. Electrolux and General Electric could not overcome that reality at trial. The American public has been very well-served by the outstanding work of the trial team in this case, led by Ethan Glass. The abandonment of the transaction is a testament to their tremendous dedication and the thoroughness with which they presented the evidence to the Court.”
Electrolux makes and sells major appliances under the brand names Frigidaire, Tappan and Electrolux. Its annual major-appliance sales in the United States total approximately $2.6 billion. Electrolux North America Inc. is a wholly owned subsidiary of defendant AB Electrolux.
General Electric also makes and sells major appliances, including those under the brand names GE Monogram, GE Café, GE Profile, GE, GE Artistry and Hotpoint. In the United States, General Electric’s annual major appliance sales total approximately $3.4 billion.
Eight sentenced in multi-state heroin trafficking operationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Eight individuals were sentenced in federal court today after they admitted to participating in a multi-state heroin trafficking scheme, United States Attorney William J. Ihlenfeld, II, announced.
In June 2015, authorities announced a 163-count federal indictment encompassing 41 defendants, including the eight individuals sentenced today. The indictment targeted an extensive heroin trafficking network led by Brian Alexander Hall, 27, of Baltimore Maryland. Customers from locations in Maryland, Pennsylvania, Virginia, and West Virginia traveled to the Baltimore area to purchase heroin from Hall.
Shawn Blain Bowers, 27, of Braddock Heights, Maryland, pled guilty in August 2015 to one count of “Conspiracy to Distribute Heroin.” He was sentenced today to 51 months in prison.
Javier Lewis Howard, 33, of Martinsburg, pled guilty in August 2015 to one count of “Use of a Telephone to Facilitate the Distribution of Heroin” and one count of “Aiding and Abetting Interstate Travel in Aid of Racketeering.” He was sentenced today to 46 months in prison on each count. The sentences imposed today will run concurrently for a total of 46 months in prison.
Harmony Hahn, 32, of Martinsburg, pled guilty in August 2015 to one count of “Aiding and Abetting Interstate Travel in Aid of Racketeering,” and one count of “Aiding and Abetting Possession with Intent to Distribute Heroin.” She was sentenced today to 37 months in prison on each count. The sentences imposed today will run concurrently for a total of 37 months in prison.
Bonnie Hanna, 34, and James Michael Ross, 32, both of Martinsburg, each pled guilty in August 2015 to one count of “Aiding and Abetting Possession with Intent to Distribute Heroin.” Hanna was sentenced today to 24 months in prison. Ross was sentenced today to 15 months in prison.
Darla Kinser, 30, James Wesley Faircloth, 35, both of Martinsburg, and Teddy Edward Threadgill, 47, of Harpers Ferry, West Virginia, each previously pled guilty to one count of “Interstate Travel in Aid of Racketeering.” Faircloth was sentenced today to 30 months in prison. Threadgill was sentenced today to 18 months in prison. Kinser was sentenced today to 10 months in prison.
Assistant U.S. Attorneys Anna Krasinski and Paul Camilletti prosecuted the cases on behalf of the government. The Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, and the Federal Bureau of Investigation led the inquiry.
Chief U.S. District Judge Gina M. Groh presided.
Defendant Convicted of Perjury Sentenced to 46 MonthsRead the Press Release
SAIPAN, CNMI – ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that on Friday, December 4, 2015, the NMI U.S. District Court Chief Judge Ramona V. Manglona sentenced Randy A. Igisomar, age 23, to 46 months in prison followed by three years of supervised release for perjury. Igisomar pleaded guilty on November 26, 2014.
During his sentencing hearing, Igisomar addressed Judge Manglona in open court and admitted he had lied during his testimony at the trial of Raymond Borja Roberto, who had been charged with three counts of enticement of a minor and one count of witness tampering, and was acquitted on all counts by a jury on September 29, 2014.
Following the sentencing, United States Attorney for the Districts of Guam and the Northern Mariana Islands, Alicia A.G. Limtiaco, stated, “The Defendant's perjured testimony was an affront to our system of justice. The United States Attorney’s Office, together with its federal law enforcement partners, will continue in its efforts to ensure that those who obstruct justice are held accountable and prosecuted for their crimes.”
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Ross K. Naughton and Garth R. Backe.
Corona Woman Who Ran High-End Denim Jean Company Sentenced to nearly Seven Years in Prison in $15 Million Bank Fraud SchemeRead the Press Release
LOS ANGELES – A Corona woman who was the chief executive officer of a high-end jean company that outfitted Hollywood celebrities was sentenced today to 79 months in federal prison for running what prosecutors called “two fraud schemes of epic proportions.”
Carolyn Marie Jones, 52, was sentenced this afternoon by United States District Judge Michael W. Fitzgerald, who also ordered the defendant to pay $15,124,100 in restitution to individual investors and Union Bank of California.
At today’s sentencing hearing, Judge Fitzgerald said the defendant was “truly a greedy, awful person.”
Jones pleaded guilty in February to one count of bank fraud and one count of concealing assets in a bankruptcy proceeding.
Jones “executed not one, but two, fraud schemes of epic proportions resulting in a loss to Union Bank and numerous investors of $15,124,100,” prosecutors wrote in a sentencing memorandum that outlined one scheme involving bank loans and bankruptcy fraud and a second one targeting individual investors that Jones perpetrated while free on bond after being indicted in the bank fraud case.
According to court documents, Jones defrauded Union Bank of California in a scheme related to her company, DDI (sometimes known as Diamond Decisions, Inc.), which sold jeans under the labels Privacywear and PRVCY Premium. Union Bank issued an $8.5 million line of credit – which was later increased to $15 million – to Jones in late 2008, but Jones had filed a fraudulent loan application that used another person’s social security number, bogus tax returns that had never been filed with the Internal Revenue Service and false financial statements for DDI that grossly overstated the company’s profits.
“For years, defendant [Jones] knowingly submitted false and fabricated tax returns, income statements, accounts receivable reports, and other financial documents to Union Bank,” according to the sentencing memo. “She lied to numerous bank employees about her company’s success and sales, among other things. She fabricated fake customers and retail stores purportedly buying her products.”
Jones also admitted in court that the accounting firm she claimed had audited her financial statements was a sham company. Jones confessed she lied to Union Bank employees, including the loan officer.
Jones soon defaulted on the $15 million loan, and Union Bank filed a civil lawsuit against DDI in state court. When the court issued an order authorizing Union Bank to seize the company’s assets, Jones filed a Chapter 11 bankruptcy petition in February 2010 that listed the bank as the sole creditor. In the following months, Jones lied to the bankruptcy trustee, concealed DDI assets, specifically about $120,000 that she had received from DDI customers, and spent some of the money on herself.
“Jones operated a sophisticated and devious scheme that spanned many years and caused significant financial and personal harm,” said United States Attorney Eileen M. Decker. “Jones actions were driven by greed, caused losses to both a financial institution and individuals, and has now resulted in a significant prison sentence.”
As part of a plea agreement in this case, Jones apologized to the identity theft victim in the bank fraud case, and she agreed to pay $15 million in restitution to Union Bank and $124,100 in restitution to victims whom she admitted defrauding in the second scheme.
Jones pleaded guilty in relation to two cases that were the result of an investigation conducted by the United States Secret Service and IRS - Criminal Investigation. The United States Trustee’s Office provided valuable assistance during the investigation.
Colorado U.S. Attorney's Office Efforts Result in the Collection of over Half a Billion Dollars in Fiscal Year 2015Read the Press Release
DENVER – U.S. Attorney John Walsh today announced that the District of Colorado, working on its own and with other U.S. Attorney’s Offices and components of the Department of Justice collected $539,446,849.97. These collections come from key cases such as those against DaVita, Inc., MetLife, First RF Corporation and others. Of this amount, $15,844.38 was collected in criminal actions and $539,431,005.59 was collected in civil actions.
Of the total, the U.S. Attorney’s Office in Colorado itself collected $6,590,196.05 in Colorado-specific criminal and civil actions. Of this amount, $5,257,087.32 was collected in criminal actions and $1,333,108.73 was collected in civil actions.
Attorney General Loretta E. Lynch announced on December 3, 2015 that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending September 30, 2015. Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department's combined appropriations for the 94 U.S. Attorney's Offices and the main litigating divisions in that same time period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“Each year the United States Attorney’s Office for the District of Colorado helps recover huge sums on behalf of the taxpayers. This year that amount was over half a billion dollars,” said U.S. Attorney John Walsh. “The extraordinary skill and dedication of our civil attorneys and staff, as well as our financial litigation unit staff, are to thank for the vast majority of these recoveries, and those amounts exceed the total budget of the U.S. Attorney’s Office each year not just by multiples, but by factors of ten and more.”
Included in this year’s collection are three high-level civil cases, some of which the Colorado U.S. Attorney’s Office worked with other U.S. Attorney’s Offices or with litigating divisions within the Department of Justice. They include:
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A $350 million settlement with DaVita, Inc. to resolve allegations that DaVita, a dialysis company, used bogus economic manipulations to artificially reduce the apparent value of its dialysis centers. The United States alleged that DaVita reduced these values to induce doctors to enter into joint ventures with DaVita, so that those doctors would then refer all their patients to DaVita clinics. The United States alleged that these economic manipulations violated the Anti-Kickback Statute and the False Claims Act.
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A $123.5 million settlement to resolve allegations that MetLife Bank N.A. violated the False Claims Act when it underwrote mortgage loans to be insured by the U.S. Department of Housing and Urban Development’s Federal Housing Administration (FHA).The United States alleged that MetLife knowingly failed to follow FHA’s rules and sought insurance for loans that did not meet the applicable requirements, leaving the government on the hook as the insurer when the loans defaulted.
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A $10 million settlement with First RF Corporation to settle allegations that First RF defrauded the United States when it supplied antennas for use in fighting improvised explosive devices in Iraq and Afghanistan.The United States alleged that First RF improperly overcharged the government for the equipment by making misrepresentations during contract negotiations.
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A $550,000 settlement with Esri, Inc. involving alleged overcharging of the Bureau of Land Management in contracts for time and materials.The Federal Acquisition Regulations for T&M contracts set rules for government contractors, and prevent them from submitting bills that include certain kinds of fees, such as travel and the cost of subcontractors. The United States alleged that Esri added prohibited profit and fees to invoices for payment in T&M contracts without BLM’s knowledge or approval.
The 2015 collections related to criminal cases include two tax fraud related cases, U.S. v. Gregory Laurence and U.S. v. Matthew Zuckerman. Additional money was collected following a trial in U.S. v. Michael Griggs, an executive with Disaster Restoration, Inc. who conspired with subcontractors to inflate their bids for restoration costs.
The largest civil collections in 2015 were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney's Office in Colorado, working with partner agencies and divisions, collected $45,938,911.00 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
In addition to the substantial 2015 collections, the U.S. Attorney’s Office, working with other Department of Justice components, continues to recover large amounts of money for the taxpayers. One example that will be applied to the FY 2016 collection, is the recent settlement with Franklin American Mortgage, who agreed to pay the United States $70 million to resolve allegations it violated the False Claims Act by knowingly originating and underwriting bad mortgage loans insured by the U.S. Department of Housing and Urban Development.
The U.S. Attorneys’ Offices, along with the Justice Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
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Area Man Sentenced for Cyber-Attack of the St. Louis County Police Union WebsiteRead the Press Release
St. Louis, MO – JUSTIN PAYNE was sentenced to 18 months imprisonment for possession of an unregistered destructive device and an additional 12 months for destroying the St. Louis County Police Association website through a distributed denial of service attack.
According to court documents, on December 2, 2014, the group “Rebel But Gangster Black Rebels” aka RBG Black Rebels promoted a cyber-attack against the St. Louis County Police Association (SLCPA) website on Twitter. An investigation by the FBI determined that the RBG Black Rebels’s Twitter account is solely operated and held by the defendant, Justin Payne. His cyber-attack was in conjunction with the group Operation Ferguson, which claimed affiliation with the group Anonymous.
On December 2, 2014, messages were sent out on Twitter by the Defendant. These messages contained a link for a Distributed Denial of Service (DDoS) attack on the SLCPA website. A distributed denial-of-service attack is an attempt to make a machine or network resource unavailable to its intended users. All networks have a limited amount of connections that they can have at any one time. The program distributed by the defendant exploited this limit by initiating as many connections with SLCPA website as possible to fill up the bandwidth. This attack on the SLCPA website actually shut down the website. On December 3, 2014, the St. Louis Division of the FBI confirmed a DDoS attack on SLCPA.org website and began an investigation. The SLCPA provided FBI agents with web logs detailing the IP addresses used in the attack. A review of the logs determined the times of the attack coincided with the Twitter messages sent by Justin Payne via his RBG Black Rebels Twitter account.
On January 27, 2014, a review of Payne’s Twitter account revealed messages associated with killing law enforcement officers. Through investigation, FBI agents determined that Justin Payne worked at the V.A. facility located at One Archives Way, St. Louis, Missouri. After Payne was arrested for the DDoS attack, the FBI received a search warrant for Payne’s car. During the search of Payne’s trunk, agents located a glass container containing a flammable liquid mix of gasoline, water and ethanol, which was later determined to be an improvised incendiary device, commonly known as a Molotov cocktail.
Payne, address unknown, pled guilty in September to one felony count of possession of an unregistered firearm and one count of damage to a protected computer. He appeared today for sentencing before United States District Judge Henry Autrey.
The case was investigated by the Federal Bureau of Investigation and the Federal Protective Service. Assistant United States Attorney Colleen Lang handled the case for the U.S. Attorney’s Office.
Appellate Court Denies Estate Planner’s Attempt to Vacate Guilty Plea; Leaves Prison Term, Restitution Order IntactRead the Press Release
PROVIDENCE, R.I. – The First Circuit Court of Appeals today let stand a District Court ruling denying motions by Joseph A. Caramadre to withdraw his guilty plea to conspiring to steal and use the identities of terminally-ill patients to obtain millions of dollars in illicit profits from insurance companies and bond issuers, and left intact a sentence of 6-years in federal prison imposed by U.S. District Court Chief Judge William E. Smith.
Joseph A. Caramadre, president, CEO and majority owner of Estate Planning Resources in Cranston, R.I., was sentenced on December 16, 2013, to 72 months in federal prison to be followed by 3 years supervised release, during which time he is required to perform 3,000 hours of community service to the elderly and terminally-ill individuals. Caramadre was also ordered to pay restitution in the amount of $46 million dollars.
Caramadre pleaded guilty on November 19, 2012, to conspiracy to commit identity theft and wire fraud, as the second week of testimony in his federal court jury trial was scheduled to begin. Prior to sentencing, Caramadre attempted to withdraw his guilty plea, however his motion to withdraw the guilty plea was denied by Chief Judge William E. Smith.
At the time of his guilty plea, Caramadre admitted to the court that he, and a co-defendant, Raymour Radhakrishnan, an employee of Caramadre, made misrepresentations to terminally-ill and elderly patients and their family members in order to obtain their personal identity information. They used the information, including names; dates of birth; and social security numbers, to obtain more than 200 variable annuities and to open more than 75 brokerage accounts in order to purchase “death-put" bonds in the victims’ names without their knowledge and consent. Caramadre and Radhakrishnan either forged the signatures of terminally-ill people on account documents, or obtained by means of misrepresentations. When the terminally- ill person died, Caramadre and others reaped substantial profits by exercising death benefits associated with the investments.
“The road has been a long one, but the defendant’s quixotic and seemingly inexhaustible attempts to escape the consequences of his reprehensible criminal conduct are finally at an end,” commented United States Attorney Peter F. Neronha. “Perhaps he can spend the remainder of his six year prison sentence reflecting on his greed and his victimization of the most vulnerable, instead of dreaming up Hail Mary legal arguments.”
The matter was argued before the First Circuit Court of Appeals by Assistant U.S. Attorney Donald C. Lockhart. The criminal case was prosecuted in U.S. District Court by Assistant U.S. Attorneys Lee H. Vilker and John P. McAdams.
The matter was investigated by the United States Attorney’s Office and the FBI, with the assistance of the U.S. Postal Inspection Service and IRS Criminal Investigation.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Alexandria Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
ALEXANDRIA, Va. – Richard Robinson, 58, of Alexandria, pleaded guilty today to receipt of child pornography.
In a statement of facts filed with the plea agreement, from October 2010 to May 2015, Robinson used a peer-to-peer file sharing program to receive and collect child pornography videos and images, including videos of children as young as five years old being sexually abused. In total, Robinson’s child pornography collection included 326 images and 202 videos of children being sexually exploited, including images and videos depicting sadistic or masochistic conduct.
Robinson faces a mandatory minimum penalty of five years in prison, and a maximum of 20 years in prison, when sentenced on March 4, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Washington D.C. office, made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema. This case was investigated by HSI with assistance from the Northern Virginia Internet Crimes Against Children Task Force. Assistant U.S. Attorney Kellen S. Dwyer is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-CR-329.
2015 Pacific Region OCDETF Advisory Council Meeting in San FranciscoRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), together with Michael Puralewski, Resident Agent in Charge of the Drug Enforcement Administration (DEA), and Assistant U.S. Attorney (AUSA) Clyde Lemons, attended the 2015 Pacific Region OCDETF Advisory Council Meeting on December 3, 2015, in San Francisco, California.
OCDETF (Organized Crime Drug Enforcement Task Force) is a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. The participants of the OCDETF Program include the 94 U.S. Attorneys’ Offices, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the DEA, the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS), the U.S. Coast Guard, the U.S. Immigration and Customs Enforcement (ICE), the U.S. Marshals Service, the Criminal and Tax Divisions of the U.S. Department of Justice and numerous state and local agencies.
The 2015 Pacific Region OCDETF Advisory Council Meeting was attended by United States Attorneys, Lead OCDETF AUSAs, Special Agents in Charge of DEA, and U.S. Marshals in the Pacific Region. The Pacific Region encompasses Guam, the Commonwealth of the Northern Mariana Islands, Hawaii, California, Washington, Nevada, Oregon, Idaho and Alaska. The meeting covered the state of the OCDETF Program, Pacific Region district updates and a review of the Pacific Region Drug Threat Assessment.
"Operation Pongo" Leads to Arrest of Two Malaysian Men on Federal Charges of Smuggling Wildlife into the U.S.Read the Press Release
PORTLAND, Ore. – Two Malaysian nationals have been arrested on federal wildlife smuggling charges after they allegedly used mail parcels to illegally smuggle orangutan skulls and parts of other protected wildlife into the United States.
Eoin Ling Churn Yeng, 35, and Galvin Yeo Siang Ann, 33, both Malaysian citizens, were arrested without incident, on Friday afternoon, December 4, by special agents with the U.S. Fish and Wildlife Service and National Oceanic and Atmospheric Administration. Ling and Yeo were arrested soon after arriving in Portland to meet with an associate.
Ling and Yeo are charged in a criminal complaint that alleges multiple counts of illegally importing wildlife into the United States, an offense that carries a statutory maximum penalty of 20 years in federal prison and a $250,000 fine.
According to the criminal complaint, the investigation into Ling and Yeo began in 2013, when a routine search of an international package revealed a helmeted hornbill mandible that was being shipped to a residence in Forest Grove, Oregon. Helmeted hornbills are listed as endangered under the Endangered Species Act (ESA) and protected by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
U.S. Fish and Wildlife agents initiated an undercover operation named “Operation Pongo,” which was inspired by the orangutan’s genus Pongo. The investigation revealed that Ling and Yeo were co-owners of an online business that regularly smuggled endangered wildlife into the United States from 2004 to 2015. The criminal complaint states that U.S. Fish and Wildlife reviewed records that indicate Ling and Yeo have sold wildlife items to multiple individuals and businesses in the United States. Undercover U.S. Fish and Wildlife agents communicated with Ling and Yeo and purchased three orangutan skulls, four helmeted hornbill skulls, one CITES-protected rhino hornbill head, one ESA-protected babirusa (wild pig) skull, one CITES-protected langur skull, and one ESA-protected dugong (marine mammal) rib.
Ling and Yeo are expected to make their initial court appearance in U.S. Magistrate Court today at 1:30 p.m.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Operation Pongo was conducted by the U.S. Fish and Wildlife Service, which received assistance from the Office of International Affairs, Environmental Crimes Section of the Environment and Natural Resources Division, U.S. State Department, FBI Legal Attaché in Kuala Lumpur, National Oceanic and Atmospheric Administration, Bureau of Land Management, and the Multnomah County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Ryan W. Bounds.
Friday 4 December 2015
Zimmerman Man Sentenced to 252 Months in Prison After Trial Conviction for Distribution of Child PornographyRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of LEVI WAYNE BURNS, 40, for distribution and possession of child pornography. BURNS pleaded on guilty on June 5, 2015, to possession of child pornography and was convicted on June 10, 2015, after a jury trial, of one count of distribution of child pornography. The defendant was charged by indictment on November 20, 2014, with one count each of possession and distribution of child pornography. BURNS was convicted in 2005 in Sherburne County, Minn., for criminal sexual conduct in the third degree for engaging in sexual acts with a 15-year-old female child. He was sentenced yesterday in U.S. District Court in Minneapolis, Minn., before U.S. District Judge Patrick J. Schiltz.
According to the defendant’s guilty plea and as proven at trial, in January 2014, BURNS shared via a peer-to-peer computer network several files containing videos of child pornography, including a video depicting two female children between the ages of 10 and 14 engaged in sexual acts. BURNS, who lived in the basement of his parents’ home in Sherburne County, operated an extensive computer system and related equipment. In fact, BURNS was using so much computer power that he and his parents were using the heat generated by the defendant’s computers to heat their house that winter, which was one of the coldest in recent Minnesota history.
According to the defendant’s guilty plea and as proven at trial, BURNS was operating a specially built computer with several hard drives, at least one of which was dedicated to a file sharing program that allowed him to download and share child pornography over the internet. The defendant also saved thousands of files of child pornography on a separate external hard drive.
This was the result of an investigation conducted by the Federal Bureau of Investigation, Sherburne County Sheriff’s Office, and the Minneapolis Police Department.
Assistant U.S. Attorneys Katharine T. Buzicky and Sarah E. Hudleston prosecuted the case.
Defendant Information:
LEVI WAYNE BURNS, 40
Zimmerman, Minn.
Convicted:
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Distribution of child pornography, 1 count
- Possession of child pornography, 1 count
Sentenced:
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252 months in prison
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10 years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Woman Arrested and Charged with Sex Trafficking of MinorRead the Press Release
St. Thomas, USVI – Jennifer Bowen-Dodoo, 51, made her initial appearance in District Court today before District Court Judge Curtis V. Gomez after her arrest on St. Thomas Thursday for sex trafficking of a 13-year-old female minor, United States Attorney Ronald W. Sharpe announced. Judge Gomez remanded Bowen-Dodoo to the custody of the U.S. Marshals Service pending a detention hearing scheduled for December 7, 2015.
According to a criminal complaint filed in the District Court, Bowen-Dodoo directed a 13-year-old female to become involved in a sexual relationship with a 58-year-old adult male, and demanded that the male make monthly deposits into Bowen-Dodoo’s bank account. In addition to the monthly deposits, Bowen-Dodoo periodically demanded other cash payments in exchange for facilitating the male’s continued access to the minor. If convicted, Bowen-Dodoo faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. She would also face a fine of up to $250,000.
“Adults who target children for sexual exploitation, regardless of their age, should consider themselves targets by HSI and our law enforcement partners,” said Angel M. Melendez, special agent in charge of HSI in Puerto Rico and the Virgin Islands. “Child exploitation, in all its forms, is a very serious crime and its investigation is a priority for HSI.”
United States Attorney Sharpe reminds the public that a criminal complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
Suspected child exploitation or missing children cases may be reported to the National Center for Missing and Exploited Children via its toll-free 24–hour hotline at 202-514-5678, or to U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) at (340) 693-2250.
This case is being investigated by HSI, with the assistance of the Virgin Islands Police Department and Human Services. It is being prosecuted by Assistant United States Attorney Everard E. Potter.
Western Washington U.S. Attorney’s Office Collects more than $21 Million for U.S. Taxpayers and Crime Victims in Fiscal Year 2015Read the Press Release
Seattle - U.S. Attorney Annette L. Hayes announced today that the U.S. Attorney’s Office for the Western District of Washington collected more than $21 million between October 1, 2014 and September 30, 2015. The office collected $12,195,918 in criminal and civil actions. Criminal cases accounted for $4,108,596 of the collections and $8,087,322 was collected in civil actions. In addition the office collected $8.9 million in asset forfeitures. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
The Western District of Washington also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $8,571,092 in cases pursued jointly with these offices. Of this amount, $10,625 was collected in criminal actions and $8,560,467 was collected in civil actions.
These collections are part of the $23 billion that Attorney General Loretta E. Lynch announced yesterday in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The more than $23 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department's combined appropriations for the 94 U.S. Attorney's offices and the main litigating divisions in that same period.
“Every day this office goes to work to protect the public and that includes safeguarding taxpayer resources,” said U.S. Attorney Annette L. Hayes. “During this past fiscal year, this has meant returning a total of $21 million to victims of crime and other taxpayer funded programs. This office will continue to work hard to ensure criminals do not profit from their crimes and those who defraud the government do not get to keep their ill-gotten gains.”
The more than $21 million collected in the Western District of Washington are made up of a wide variety of civil and criminal actions brought on behalf of the United States. The largest civil collection in the Western District of Washington was $6.4 million from cardiac monitoring company Bio-Telemetry Inc. The company paid $6.4 million to resolve allegations that its subsidiary, CardioNet, improperly billed the Medicare Program for Mobile Cardiac Outpatient Telemetry (MCOT) services when those services were not reasonable or medically necessary. More on the case here.
On the criminal side, the U.S. Attorney’s Office collected more than $231,000 from Gino Turrella, who committed identity theft while making threats against Boeing and other companies. Elsa Kwong, convicted of widespread food stamp fraud paid $147,967 towards her $1.5 million restitution obligation. Jennifer Kolar, convicted in connection with the 2001 arson at the University of Washington Center for Urban Horticulture paid $77,000 toward restitution for the $7 million in damage caused by the fire. And Colton Harris Moore, known in the media as the ‘Barefoot Bandit’ paid $90,000 towards his restitution obligation of more than $1.1 million.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
Wanda C. Shorter Found Guilty by Jury TrialRead the Press Release
HAMMOND – United States Attorney for the Northern District of Indiana, David Capp, announced that Wanda C. Shorter, 43, of Elkhart, Indiana, was found guilty, yesterday, after a four-day jury trial of all four counts charged by indictment in a health care billing fraud/aggravated identity theft case.
According to documents in this case, Empowerment Non-Emergency Medical Transportation, Inc. (hereafter "Empowerment") was an enrolled Medicaid provider. The provider agreement for Empowerment showed that it was a commercial ambulatory service provider and that its business address was in Elkhart, Indiana. Defendant Wanda C. Shorter founded Empowerment and submitted Empowerment's billings to Medicaid for payment and reimbursement of claims. Ms. Shorter was the sole owner of Empowerment Non-Emergency Medical Transportation, Inc. Indiana Medicaid reimburses enrolled health care providers, including commercial ambulatory service providers, for covered services that are provided to patients who are Medicaid eligible on the date of the provided service. Providers enrolled in the Indiana Medicaid program agree to submit claims for only medically and reasonably necessary services that are covered under the program that are actually provided and to only seek compensation to which the provider is legally entitled. Under the Indiana Medicaid Provider Agreement the State of Indiana entered into with all Medicaid providers, Medicaid providers are prohibited from submitting claims for services that are not medically necessary or are not actually provided or for which the provider is otherwise not legally entitled to receive payment. From 2011 to 2014, in the Northern District of Indiana, the defendant knowingly engaged in a scheme to defraud Indiana Medicaid and knowingly misused the means of identification of Medicaid clients. As part of the fraud scheme, the defendant caused billings and claims for reimbursement to be sent to Indiana Medicaid for transportation services that were never in fact provided. Defendant Wanda Shorter caused billings and claims for reimbursement to be sent to Indiana Medicaid as well for the payment of inflated mileage claims and for medical transportation trips that had been cancelled and never occurred. Further, the defendant caused billings to be sent to Medicaid that were up-coded, that is, the defendants caused billings to be sent that were submitted for higher reimbursement amounts than were justified based on the actual transportation services provided. As part of the fraud scheme, the defendant knowingly used without lawful authority a means of identification of other persons during and in relation to her health care fraud scheme, including specifically that of multiple Medicaid beneficiaries. The loss caused by the fraud here was in excess of $1 million dollars.
“This case is an example of a brazen misuse of taxpayer funds by fraudulently overbilling the Medicaid program for reimbursements. It also demonstrates how state and federal government can partner to investigate and bring a perpetrator to justice. I want to once again personally thank David Capp and his team for their extraordinary efforts in serving justice and the people of Indiana,” said Indiana Attorney General Greg Zoeller, who also thanked the investigators and attorneys who worked on the case.
This case was prosecuted as a result of an investigation by the Federal Bureau of Investigation and the Indiana Attorney General’s Office Medicaid Fraud Control Unit. This case was prosecuted by Assistant United States Attorney Donald J. Schmid.
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U.S. Attorney’s Office Collects Nearly $55 Million for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
COLUMBUS, Ohio – U.S. Attorney Carter M. Stewart announced today that the Southern District of Ohio collected nearly $55 million in criminal and civil actions in Fiscal Year 2015. Of this amount, nearly $46 million was collected in criminal actions and approximately $9 million was collected in civil actions.
Additionally, the Southern District of Ohio worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $49.7 million in cases pursued jointly with these offices. Of this amount, approximately $7 million was collected in criminal actions and $42.5 million was collected in civil actions.
Attorney General Loretta E. Lynch announced yesterday that the Justice Department collected $22.9 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015.
The more than $22.9 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“The collection figures in our district and across the country highlight the Justice Department’s work to protect our citizens and safeguard taxpayer resources,” U.S. Attorney Stewart said. “We are dedicated to providing a valuable return on investment to the American people.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in Southern Ohio, working with partner agencies and divisions, collected nearly $18 million in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney’s Office Collects More Than $136 Million for U.S. Taxpayers in Fiscal Year 2015Read the Press Release
Tampa, FL - U.S. Attorney A. Lee Bentley, III announced today that the Middle District of Florida collected more than $136 million for taxpayers this fiscal year (FY). In FY 2015, which ended on September 30, the Office’s Civil, Criminal, and Asset Forfeiture Divisions collected these monies through civil and criminal actions.
The Office’s Civil Division, led by Randy Harwell, recovered $101,247,920 from affirmative civil enforcement cases, most alleging health care fraud. Our civil Assistant United States Attorneys recovered $47,593,934 as a result of investigations conducted in this district. An additional $53,653,986 was recovered as a result of joint investigations with the Department of Justice’s Civil Division and other United States Attorneys’ offices. This latter figure includes an installment payment of $21,651,246 from an earlier settlement of a large health care fraud case, United States ex rel. Hellein v. Wellcare Health Plans, Inc.
The Office’s Asset Recovery and Victims’ Rights Division, led by Anita M. Cream, recovered more than $34.9 million. Of this amount, the Division’s Financial Litigation Unit recovered $11,498,617 in criminal cases, most of which was in the form of criminal fines, special assessments, and restitution. Providing restitution for the victims of crime is a top priority of our office. Working with partner agencies, the Division’s Asset Forfeiture Section recovered more than $23.4 million in criminal and civil forfeitures. Depending on the type of case, forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund or the Department of Treasury’s Assets Forfeiture Fund. Consistent with Departmental policy, in cases where a defendant lacks the means to pay restitution, assets can be forfeited from that defendant and restored to crime victims. In addition, approximately $5.6 million in forfeited funds was shared with state and local law enforcement agencies.
Attorney General Loretta E. Lynch announced on December 3, 2015, that the Justice Department collected $23.1 billion in civil and criminal actions this fiscal year. This total represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
The U.S. Attorneys’ offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct, or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, the Department of Health and Human Services, the Internal Revenue Service, the Small Business Administration, and the Department of Education.
Middle District of Florida Affirmative Case Highlights
The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans’ benefits, federally insured loans and mortgages, highway funds, research grants, agricultural supports, school lunches, and disaster assistance. In 1986, Congress strengthened the Act by amending it to increase incentives for whistleblowers to file lawsuits on behalf of the government. Most false claims actions are filed under the Act’s whistleblower, or qui tam, provisions that allow individuals to file lawsuits alleging false claims on behalf of the government. If the government prevails in the action, the whistleblower, also known as the relator, receives up to 30 percent of the recovery.
Compounding Pharmacy Fraud Initiative
Our district has taken the lead in a nationwide effort to pursue recovery, under the False Claims Act, against compounding pharmacies that have engaged in a systemic fraud against TRICARE, the military’s healthcare program. The most persistent fraud scheme identified involves improper relationships between marketing firms, physicians, and compounding pharmacies to induce the referral of prescriptions for medically unnecessary compounded pain and scar creams to the pharmacies.
In July 2015, the U.S. Attorney’s Office settled claims against Blanding Health Mart Pharmacy. Between February and April, Blanding sought reimbursement for compounding pharmaceutical prescriptions that were not medically necessary and had been written by physicians that had never actually seen the patients. These claims were resolved for $8,441,107.
Kevin Powers, former Chief Executive Officer of QMedRX, a compounding pharmacy in Maitland, paid $6,529,077 to satisfy his responsibility arising from bills submitted to federal healthcare programs for services that were not reimbursable. Between January 1, 2013, and January 22, 2014, QMedRX submitted claims for compounded prescriptions that violated the Anti‐Kickback Statute because the marketers who obtained the prescriptions from physicians were paid through improper and illegal incentive compensation arrangements.
Another compounding pharmacy, Med Match Pharmacy, LLC, paid $4,736,133.63 to resolve concerns that it had paid kickbacks to marketers, that it had filled prescriptions it knew or should have known were not legitimate, and that it had sent prescriptions to states in which it did not have a valid license.
MediMix, a Jacksonville-based compounding pharmacy, resolved claims that it had an improper referral relationship with its top-referring physician – Dr. Ankit Desai. TRICARE alleged that between January 2009 and December 2014, Dr. Desai sent hundreds of prescriptions to MediMix that were not reimbursable because he was married to a Senior Vice President at MediMix. Healthcare providers are generally prohibited from referring business to entities where they have a financial interest. The government agreed to accept $3,775,458 to resolve these allegations.
Shortly after the close of FY15, the MDFL reached settlements with a host of other compounding pharmacies, bringing the total recovery on behalf of the TRICARE program to more than $35 million.
United States ex rel. Yandell v. Advanced Homecare, Inc.
A former employee of a Jacksonville home health company filed a qui tam case against her employer, Advanced Homecare, contending that, from April 2009 until April 2012, the company had created a set of “neurocare protocols” wherein the company accepted home health referrals from two neurologists. The government alleged that through these protocols, Advanced Homecare had accepted and treated patients who were not actually homebound and did not have a valid physician certification of home health need, as required by Medicare. Further, the government alleged that Advanced Homecare recklessly had allowed its employees to aggressively market its home health services to this neurology practice, and that those marketing employees had gained direct access to the practice’s patient files, completed referral forms, and used the doctors’ signature stamps to sign orders, in order to circumvent the physician certification requirement. The government resolved these allegations for $1,293,169.
United States ex rel. Doe v. Recovery Home Care
The relator in this case is a former sales representative for a home health care provider who alleges that the defendant entered into consulting agreements with physicians. These physicians agreed to refer at least 10 patients a month to the defendant in exchange for compensation ranging from $2,000 to $2,500 per month. The consulting agreements referred to the physicians as either “medical directors” or “medical consultants.” Prior to October 2009, Recovery Home Care employed two medical directors. By January 2012, the defendant had contracts with 18 medical directors, and had “consulting agreements” with 32 physicians during the course of the scheme. The relator alleged that these agreements violated the federal Anti-Kickback Statutes and Stark Statute. Following a lengthy investigation, the United States intervened in the case. Claims against Recovery Home Care have been resolved for $1 million. A settlement of the claims against the individual defendant is still being finalized.
United States ex rel. Wells v. Baptist Health System, et al.
This qui tam case was filed by a former administrator of the Baptist Health hospital chain who alleged that a neurologist employed by the hospital intentionally had misdiagnosed his patients with various neurological disorders and then had billed government healthcare programs for medically unnecessary services, tests, and treatments. In addition, she alleged that the defendant hospital chain did not return overpayments it had received as a result of the misdiagnoses, after discovering the neurologist’s scheme. In FY2014, we settled our claims against the hospital for $2.5 million. This fiscal year, we reached an ability to pay settlement for $150,000 with the physician defendant.
United States ex rel. Yerger et al. v. IND-MAR Services, Inc., et al.
The relator filed this case in May 2011, alleging that North Florida Shipyards created a sham corporation, IND-MAR Services, Inc., falsely claiming that IND-MAR was a Service Disabled Veteran Owned Business (SDVOB). North Florida Shipyards did so in order to appear qualified to bid on certain solicitations issued by the Coast Guard, which were set aside contracts for SDVOBs. After a lengthy investigation, we opened settlement discussions that led the defendant to invoke its ability to pay. In FY2015, the Department of Justice approved the defendant’s offer to pay $1,000,000 to settle these claims.
United States ex rel. Macdonald v. Walter Investment Mgmt. Corp., et al.
The former Chief Financial Officer of a loan servicing company, RMS, filed a qui tam complaint against his former employer and its parent, Walter Investments. The complaint alleged that the defendants had defrauded the Department of Housing and Urban Development’s (HUD) reverse mortgage insurance program by failing to take certain actions required by HUD regulations, after HUD insured loans became due and payable. Specifically, the relator alleged that RMS had failed to disclose to HUD on numerous occasions that it did not obtain an appraisal within the required 30 days after the loan became due, and that it did not take “first legal action” within six months of the due date. By not self-disclosing on the HUD insurance claim that these event-specific deadlines were missed, the relator alleged that RMS filed false claims with HUD that resulted in HUD paying additional interest on claims that it should not have paid. These claims were settled for $29.63 million.
CVS
This case was a civil penalty referral by the Drug Enforcement Administration arising from the conduct of two CVS pharmacies in Sanford, Florida. The two pharmacies were accused of distributing controlled substances based on prescriptions that had not been issued for legitimate medical purposes by a health care provider in the usual course of professional practice. When confronted with the investigative findings, CVS acknowledged that its retail pharmacies had dispensed certain controlled substances in a manner not fully consistent with their compliance obligations under the Controlled Substances Act and the related regulations. CVS ultimately agreed to pay a civil penalty of $22 million. At the time of settlement, this was the highest penalty of its kind ever paid by a nationwide pharmacy chain.
United States ex rel. Valenti v. Tai Shan Golden Gain Aluminum Products, Inc.
This qui tam was filed by the CEO of an exporter that competes with the defendant in the aluminum extrusion industry. He alleged that the defendant had avoided paying anti-dumping and countervailing duties owed on aluminum extrusions by misrepresenting the country of origin for the products as Malaysia, rather than the Peoples Republic of China. The investigation confirmed these allegations, as well as other deceptive practices. In FY2014, a settlement was reached with the defendant, Basco, for $1.1 million. In FY2015, settlements were negotiated with defendants C.R. Laurence Co. Inc., Southeastern Aluminum Products Inc., and Waterfall Group LLC for $2.3 million, $650,000 and $100,000, respectively, as well as for $385,000 and $50,000, on an ability to pay basis with individual defendants Robert Wingfeld and William Ma. The aggregate settlement recovery for this case was $4.585 million.
United States ex rel. Pelletier v. Liberty Ambulance Service, Inc., et al. and United States ex rel. Pelletier v. Century Ambulance Service, Inc., et al.
A former employee of two Jacksonville area ambulance companies filed two qui tam lawsuits in federal court against his former employers, alleging that the companies had submitted false claims to Medicare and other federally subsidized health programs for services that were “upcoded” and/or were medically unnecessary. Specifically, the whistleblower alleged that the companies had sought reimbursement for transportation of patients who did not qualify for basic life support transportation. In addition, the whistleblower alleged that several Jacksonville area hospitals had furthered the scheme by providing false certificates of medical necessity to justify the services. These allegations were investigated over a three and a half year period, which corroborated the relator’s core allegations. Ultimately claims were settled against one ambulance company (Century Ambulance) for $1.25 million and against three Jacksonville area hospital chains (Baptist Hospital, HCA, and Shands Healthcare) for $2.88 million, $2.4 million, and $1 million, respectively, for a total recovery of $7.53 million. The U.S. Attorney’s Office has intervened in the qui tam case against Liberty Ambulance and is currently litigating the claims against that defendant.
United States ex rel. Milstein v. Family Dermatology, et al.
Family Dermatology P.C. owns and operates a dermatopathology laboratory in Georgia and a number of dermatology practices throughout the Eastern United States. The relator, a board certified dermatologist and an independent contractor for Family Dermatology, claimed that the defendants had defrauded the United States by knowingly billing Medicare for lab work that violated the Stark Statute. The Stark Statute restricts the financial relationships that health care providers may have with doctors who refer patients to them. Family Dermatology employs a number of dermatologists as independent contractors and it routinely required them to use Family Dermatology’s in-house pathology lab, which operated under the name Nelson Dermatopathology, for their pathology services. The relator alleged that Family Dermatology’s financial relationships with a number of these physicians did not comply with the requirements of the Stark Statute, and that company had improperly billed Medicare for dermatopathology analyses performed by Nelson Dermatopathology on specimens that had been sent to the laboratory by these employed physicians. This case overlapped with another previously filed case in the Northern District of Georgia and was subsequently transferred there. Our district continued to assist in the investigation that resulted in a settlement of all claims for $3,247,935.
United States ex rel. Montejo v. Adventist Health System, et al.
A physician formerly employed by Florida Oncology Network alleged that his former employer, the exclusive provider of radiation oncology services for Adventist Health System’s Florida Hospital chain, had provided radiation therapy services to patients without the proper physician supervision required by Medicare reimbursement regulations. He further alleged that the defendants had submitted false claims for evaluation and management services that were required to be performed by radiation oncologists, but were instead performed by non-physician providers. After investigating these claims, the U.S. Attorney’s Office negotiated a settlement of the claims against the defendant hospital chain for $5.5 million.
U.S. Attorney’s Office Collected More Than $50 Million in Civil, Criminal and Asset Forfeiture Actions in Fiscal Year 2015Read the Press Release
CHICAGO — The United States Attorney’s Office for the Northern District of Illinois collected more than $50 million in criminal, civil and asset forfeiture actions in Fiscal Year 2015, Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced today.
The 2015 collections included $19,468,802 in criminal actions, $11,584,602 in civil actions, and $19,136,036 in asset forfeiture actions. The Office also collected $314,659 in criminal and civil cases pursued jointly with other U.S. Attorneys’ Offices and components of the U.S. Department of Justice.
Attorney General Loretta E. Lynch announced yesterday that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. This figure represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Lynch. “The collections demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“Our attorneys and staff are thoroughly committed to recovering funds for the federal treasury and for victims of federal crimes,” said Mr. Fardon. “The Office continues to provide a significant net financial benefit to the taxpayers of our district.”
The collections in the Northern District of Illinois included more than $2 million from the criminal fraud prosecution of insurance agent Michael Ward, and more than $1.9 million in a civil forfeiture action arising from healthcare fraud at the now-defunct Sacred Heart Hospital in Chicago.
The 94 U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States, and criminal debts owed to crime victims. Federal law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the money to state victim compensation and victim assistance programs.
Nationally, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Two Massachusetts Men Indicted in Massive Stolen Identity Tax Refund Fraud SchemeRead the Press Release
A federal grand jury sitting in Boston returned an indictment yesterday, which was unsealed today, charging two Massachusetts residents with conspiracy to defraud the United States, theft of government property, access device fraud and aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Carmen M. Ortiz for the District of Massachusetts, and Special Agent in Charge William Offord of Internal Revenue Service-Criminal Investigation (IRS-CI), Boston Field Office.
Furvio Flete-Garcia, 42, and Juan Santiago, 36, both of Lawrence, Massachusetts and nationals of the Dominican Republic, are alleged to have participated in a scheme to prepare and file fraudulent federal income tax returns using stolen identities for the purpose of obtaining U.S. Treasury tax refund checks. According to the indictment, during 2013 and 2014, Flete-Garcia and Santiago possessed more than 800 names and social security numbers of U.S. citizens including Puerto Rican residents, which Santiago sold to another individual for the purpose of using those identities to prepare and file fraudulent federal income tax returns. The indictment further alleges that Flete-Garcia and Santiago sold more than 16 U.S. Treasury tax refund checks with a total face value of more than $100,000 to the same individual. These tax refund checks were issued by the IRS as a result of the fraudulent income tax returns that were filed using the stolen identities.
Acting Assistant Attorney General Ciraolo, U.S. Attorney Ortiz and Special Agent in Charge Offord thanked agents of IRS-CI, Homeland Security Investigations, U.S. Secret Service and the Social Security Administration’s Office of the Inspector General, who investigated the case and Senior Litigation Counsel Corey J. Smith of the Tax Division, who is prosecuting the case.
Two Lawrence Men Charged in Stolen Identity Fraud SchemeRead the Press Release
BOSTON – Two Lawrence men were charged today in U.S. District Court in Boston in connection with a scheme to file fraudulent federal income tax returns using stolen identities.
Furvio Flete-Garcia, 42, and Juan Santiago, 36, nationals of the Dominican Republic, were indicted on conspiracy to defraud the United States, theft of government property, access device fraud and aggravated identity theft.
According to court documents, in 2013 and 2014, Flete-Garcia and Santiago allegedly possessed more than 800 names and social security numbers of U.S. citizens, including Puerto Rican residents, which Santiago allegedly sold to another individual for the purpose of using those identities to prepare and file fraudulent federal income tax returns. The indictment further alleges that Flete-Garcia and Santiago sold more than 16 U.S. Treasury tax refund checks with a total face value of more than $100,000 to the same individual. These tax refund checks were issued by the IRS as a result of the fraudulent income tax returns that were filed using the stolen identities.
The charge of conspiracy to defraud the United States provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. The charges of theft of government property and access device fraud each provides a sentence of no greater than 10 years in prison, five years of supervised release and a fine of $250,000. The charge of aggravated identity theft provides a mandatory minimum sentence of two years in prison, one year of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Acting Assistant Attorney General Ciraolo of the Justice Department’s Tax Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; Scott Antolik, Special Agent in Charge of the U.S. Social Security Administration, Office of the Inspector General, Boston Field Division, made the announcement. The case is being prosecuted by Senior Litigation Counsel Corey J. Smith of the Department of Justice’s Tax Division.