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Friday 30 October 2015
Nearly 500 Hospitals Pay United States more than $250 Million to Resolve False Claims Act Allegations Related to Implantation of Cardiac DevicesRead the Press Release
WASHINGTON – The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices that were implanted in Medicare patients in violation of Medicare coverage requirements, the Department of Justice announced today.
“While recognizing and respecting physician judgment, the department will hold accountable hospitals and health systems for procedures performed by physicians at their facilities that fail to comply with Medicare billing rules,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health.”
An implantable cardioverter defibrillator, or ICD, is an electronic device that is implanted near and connected to the heart. It detects and treats chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm. It is similar in function to an external defibrillator (often found in offices and other buildings) except that it is small enough to be implanted in a patient’s chest. Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.
Medicare coverage for the device, which costs approximately $25,000, is governed by a National Coverage Determination (NCD). The Centers for Medicare and Medicaid Services implemented the NCD based on clinical trials and the guidance and testimony of cardiologists and other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates. The NCD provides that ICDs generally should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty. The medical purpose of a waiting period -40 days for a heart attack and 90 days for bypass/angioplasty - is to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary. The NCD expressly prohibits implantation of ICDs during these waiting periods, with certain exceptions. The Department of Justice alleged that from 2003 to 2010, each of the settling hospitals implanted ICDs during the periods prohibited by the NCD.
“The settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine. In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date. Our office will continue to vigilantly protect the Medicare program from potential false billing claims.”
“Working as a team with the Department of Justice to investigate and settle false billing claims of this magnitude has resulted in substantial recoveries to Medicare and the successful enforcement of Medicare’s coverage requirements for these procedures,” said Inspector General Daniel Levinson of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG).
The 70 settlements, representing nearly 500 hospitals, are listed on the attached chart. Most of the settling defendants were named in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in the Southern District of Florida by Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant. The whistleblowers have received more than $38 million from the settlements. The Department of Justice is continuing to investigate additional hospitals and health systems.
The settlements were the result of a coordinated effort among the U.S. Attorney’s Office of the Southern District of Florida, the Civil Division’s Commercial Litigation Branch and HHS-OIG, Office of Investigations and Office of Counsel to the Inspector General.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims resolved by these settlements are allegations only and there has been no determination of liability.
Nearly 500 Hospitals Pay United States More Than $250 Million to Resolve False Claims Act Allegations Related to Implantation of Cardiac DevicesRead the Press Release
The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices that were implanted in Medicare patients in violation of Medicare coverage requirements, the Department of Justice announced today.
“While recognizing and respecting physician judgment, the department will hold accountable hospitals and health systems for procedures performed by physicians at their facilities that fail to comply with Medicare billing rules,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health.”
An implantable cardioverter defibrillator, or ICD, is an electronic device that is implanted near and connected to the heart. It detects and treats chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm. It is similar in function to an external defibrillator (often found in offices and other buildings) except that it is small enough to be implanted in a patient’s chest. Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.
Medicare coverage for the device, which costs approximately $25,000, is governed by a National Coverage Determination (NCD). The Centers for Medicare and Medicaid Services implemented the NCD based on clinical trials and the guidance and testimony of cardiologists and other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates. The NCD provides that ICDs generally should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty. The medical purpose of a waiting period -40 days for a heart attack and 90 days for bypass/angioplasty - is to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary. The NCD expressly prohibits implantation of ICDs during these waiting periods, with certain exceptions. The Department of Justice alleged that from 2003 to 2010, each of the settling hospitals implanted ICDs during the periods prohibited by the NCD.
“The settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine. In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date. Our office will continue to vigilantly protect the Medicare program from potential false billing claims.”
“Working as a team with the Department of Justice to investigate and settle false billing claims of this magnitude has resulted in substantial recoveries to Medicare and the successful enforcement of Medicare’s coverage requirements for these procedures,” said Inspector General Daniel Levinson of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG).
The 70 settlements, representing nearly 500 hospitals, are listed on the attached chart. Most of the settling defendants were named in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in the Southern District of Florida by Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant. The whistleblowers have received more than $38 million from the settlements. The Department of Justice is continuing to investigate additional hospitals and health systems.
The settlements were the result of a coordinated effort among the U.S. Attorney’s Office of the Southern District of Florida, the Civil Division’s Commercial Litigation Branch and HHS-OIG, Office of Investigations and Office of Counsel to the Inspector General.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims resolved by these settlements are allegations only and there has been no determination of liability.
Nearly 500 Hospitals Pay United States More Than $250 Million to Resolve False Claims Act Allegations Related to Implantation of Cardiac DevicesRead the Press Release
The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices that were implanted in Medicare patients in violation of Medicare coverage requirements, the Department of Justice announced today.
“The settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine. In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date. Our office will continue to vigilantly protect the Medicare program from potential false billing claims.”
“While recognizing and respecting physician judgment, the department will hold accountable hospitals and health systems for procedures performed by physicians at their facilities that fail to comply with Medicare billing rules,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health.”
An implantable cardioverter defibrillator, or ICD, is an electronic device that is implanted near and connected to the heart. It detects and treats chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm. It is similar in function to an external defibrillator (often found in offices and other buildings) except that it is small enough to be implanted in a patient’s chest. Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.
Medicare coverage for the device, which costs approximately $25,000, is governed by a National Coverage Determination (NCD). The Centers for Medicare and Medicaid Services implemented the NCD based on clinical trials and the guidance and testimony of cardiologists and other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates. The NCD provides that ICDs generally should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty. The medical purpose of a waiting period -40 days for a heart attack and 90 days for bypass/angioplasty - is to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary. The NCD expressly prohibits implantation of ICDs during these waiting periods, with certain exceptions. The Department of Justice alleged that from 2003 to 2010, each of the settling hospitals implanted ICDs during the periods prohibited by the NCD.
“Working as a team with the Department of Justice to investigate and settle false billing claims of this magnitude has resulted in substantial recoveries to Medicare and the successful enforcement of Medicare’s coverage requirements for these procedures,” said Inspector General Daniel Levinson of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG).
The 70 settlements, representing nearly 500 hospitals, are listed on the attached chart. Most of the settling defendants were named in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in the Southern District of Florida by Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant. The whistleblowers have received more than $38 million from the settlements. The Department of Justice is continuing to investigate additional hospitals and health systems.
The settlements were the result of a coordinated effort among the U.S. Attorney’s Office of the Southern District of Florida, the Civil Division’s Commercial Litigation Branch and HHS-OIG, Office of Investigations and Office of Counsel to the Inspector General.
This case was prosecuted by Jeffrey W. Dickstein of the United States Attorney's Office in Miami and Amy L. Easton of the Department of Justice in Washington, DC.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims resolved by these settlements are allegations only and there has been no determination of liability.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Attachment (66.31 KB)
Nearly 500 Hospitals Pay United States More Than $250 Million to Resolve False Claims Act Allegations Related to Implantation of Cardiac DevicesRead the Press Release
WASHINGTON – The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices that were implanted in Medicare patients in violation of Medicare coverage requirements, the Department of Justice announced today.
“While recognizing and respecting physician judgment, the department will hold accountable hospitals and health systems for procedures performed by physicians at their facilities that fail to comply with Medicare billing rules,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health.”
An implantable cardioverter defibrillator, or ICD, is an electronic device that is implanted near and connected to the heart. It detects and treats chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm. It is similar in function to an external defibrillator (often found in offices and other buildings) except that it is small enough to be implanted in a patient’s chest. Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.
Medicare coverage for the device, which costs approximately $25,000, is governed by a National Coverage Determination (NCD). The Centers for Medicare and Medicaid Services implemented the NCD based on clinical trials and the guidance and testimony of cardiologists and other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates. The NCD provides that ICDs generally should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty. The medical purpose of a waiting period -40 days for a heart attack and 90 days for bypass/angioplasty - is to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary. The NCD expressly prohibits implantation of ICDs during these waiting periods, with certain exceptions. The Department of Justice alleged that from 2003 to 2010, each of the settling hospitals implanted ICDs during the periods prohibited by the NCD.
“The settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine. In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date. Our office will continue to vigilantly protect the Medicare program from potential false billing claims.”
“Working as a team with the Department of Justice to investigate and settle false billing claims of this magnitude has resulted in substantial recoveries to Medicare and the successful enforcement of Medicare’s coverage requirements for these procedures,” said Inspector General Daniel Levinson of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG).
The 70 settlements, representing nearly 500 hospitals, are listed on the attached chart. Most of the settling defendants were named in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in the Southern District of Florida by Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant. The whistleblowers have received more than $38 million from the settlements. The Department of Justice is continuing to investigate additional hospitals and health systems.
The settlements were the result of a coordinated effort among the U.S. Attorney’s Office of the Southern District of Florida, the Civil Division’s Commercial Litigation Branch and HHS-OIG, Office of Investigations and Office of Counsel to the Inspector General.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims resolved by these settlements are allegations only and there has been no determination of liability.
Mt. Hope man pleads guilty to Federal drug chargeRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced that Ron Perdue, 54, of Mt. Hope, West Virginia, plead guilty today in federal court in Beckley to distributing oxycodone. Perdue admitted that on October 22, 2014, he sold oxycodone to a person who was cooperating with law enforcement authorities. The drug deal took place on Ewart Avenue in Beckley, West Virginia.
Perdue faces up to 20 years in prison and a $1,000,000 fine. United States Magistrate Judge R. Clarke VanDervort scheduled the sentencing for February 11, 2016.
The Beckley/Raleigh County Drug and Violent Crime Unit conducted the investigation.
This case was 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 opiates. The United States 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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Milford Man Pleads Guilty to Possessing Child PornographyRead the Press Release
Contact: Jody Mullis
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Anthony Parent, 22, of Milford, Maine, pled guilty today in U.S. District Court to possessing child pornography.
According to court records, from about October 31, 2013 to about July 17, 2014, Parent kept images and videos of child pornography on his personal computer, uploaded them to online accounts, and used electronic mail services to trade child pornography with others.
He faces up to 20 years in prison, a $250,000 fine and between five years and a lifetime of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the Federal Bureau of Investigation.
Metairie Man Pleads Guilty to Trafficking in over $150,000 in Counterfeit GoodsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that BOUBACAR DIALLO, age 35, of Metairie, pled guilty today to a one-count Bill of Information charging him with trafficking in counterfeit goods.
According to court documents, on March 12, 2015, investigators with the Office of the Attorney General Investigation Division and agents with the United States Department of Homeland Security – Homeland Security Investigations, acting on information that DIALLO was involved in the purchase and subsequent sale of large quantities of counterfeit merchandise, met DIALLO at his residence in Metairie. Law enforcement officials observed numerous cardboard boxes full of counterfeit merchandise. They subsequently verified as counterfeit 111 pairs of “True Religion” blue jeans; 166 “Michael Kors” purses; 67 “Michael Kors” pocketbooks; 87 “Michael Kors” watches; 6 pair of “Nike” tennis shoes; 9 pair of “Polo” pants; 8 pair of “Polo” shirts; and 693 counterfeit Michael Kors labels. The collective fair market value of all the counterfeit items and was approximately $158,049. DIALLO admitted that he knew the items he was selling were counterfeit and that he had purchased them from individuals in Atlanta and New York City. DIALLO also admitted to renting storage units to hide and store the counterfeit merchandise.
DIALLO faces a maximum term of imprisonment of not more than ten years, followed by up to three years of supervised release, and a $250,000 fine. U.S. District Judge Lance M. Africk set sentencing for February 4, 2016.
U.S. Attorney praised the work of the Louisiana Department of Justice / Office of the Attorney General Investigation Division and Immigration and Customs Enforcement, Homeland Security Investigations for investigating this matter. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
Men Involved in Fraud Scheme are SentencedRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that two men were sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport for engaging in a fraud scheme. ADAM MEYERS, 44, of Southbury, was sentenced to 18 months of imprisonment, followed by three years of supervised release, and DANIEL WALL, 59, of Bridgeport, was sentenced to three years of probation, the first 12 months of which he must serve in home confinement.
According to court documents and statements made in court, between approximately March 2008 and August 2012, MEYERS and Jason Torrance devised a scheme to defraud their employers by arranging for payment on goods that never shipped and instead diverting those payments to themselves. Torrance worked out of the New Haven branch of a New Jersey-based electrical and industrial supply company (“Distributor-1”), and MEYERS was a project manager for a New Britain-based electrical subcontractor (“Contractor”) that frequently purchased supplies from Distributor-1. WALL operated Bob Wall and Associates, a Cheshire-based distributor of electrical and other related equipment.
As part of the scheme, MEYERS identified to Torrance projects on which he believed the profit margin for Contractor would permit them to divert excess profits to themselves without Contractor becoming aware. MEYERS would submit a purchase order for materials to Torrance. Torrance then submitted a purchase order to WALL for the goods listed on the purchase order sent by MEYERS. WALL then submitted an invoice to Distributor-1 for the materials listed on the purchase order, and Distributor-1 paid the invoice by mailing a check to Bob Wall and Associates. Distributor-1 then invoiced Contractor for the goods that were on the purchase order and Contractor issued a check to Distributor-1. WALL then hand-delivered a business check to Torrance for approximately 90 percent of the money that had been paid by Distributor-1 to Bob Wall and Associates, and WALL retained the remaining 10 percent as his share of the proceeds from the scheme. Torrance then paid out a portion of the proceeds of the scheme to MEYERS.
At no time did any product on the purchase orders actually ship to the customer.
The victim companies lost more than $600,000 as a result of this scheme. Restitution will be determined after additional court proceedings.
On February 23, 2015, MEYERS and Torrance each pleaded guilty to one count of conspiracy to commit mail fraud. On July 15, 2015, WALL pleaded guilty to one count of misprision of a felony. Torrance awaits sentencing.
This matter has been investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys David E. Novick and William J. Nardini.
Manchester Man Sentenced to Prison for Distributing HeroinRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSE COLON, also known as “Uncle Benny,” 50, of Manchester, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 24 months of imprisonment, followed by three years of supervised release, for distributing heroin.
According to court documents and statements made in court, this matter stems from a joint law enforcement investigation headed by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department into gang-related narcotics trafficking in Hartford’s South End. The investigation specifically targeted a drug trafficking organization headed by Angel Rosa, aka “Little” and “Daddy,” who is a member of the Los Solidos street gang. Rosa’s cousin, Angel Rosa, aka “Mo Betta” and “Fab,” supervised the daily operations of the organization, which distributed heroin and other narcotics in the Zion Street area.
In April 2013, COLON was intercepted over a court-authorized wiretap and was identified as a source of heroin for the Rosa organization.
As a result of the investigation, 21 individuals were charged with various federal offenses, and law enforcement officers seized narcotics, one firearm, approximately $230,000 in cash, eight vehicles and jewelry.
COLON was arrested on April 25, 2013. On that date, FBI Task Force officers and Manchester Police executed a search warrant at his residence and seized a number of items that subsequently were forfeited, including $7,800 in cash, a watch valued at $46,850, two vehicles, two jet skis and two motorcycles.
On April 4, 2014, COLON pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, heroin.
Angel Rosa aka “Little” and Angel Rosa aka “Mo Betta” each pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin. On May 15, 2014, “Little” was sentenced to 235 months of imprisonment and, on April 29, 2014, “Mo Betta” was sentenced to 165 months of imprisonment.
This matter was investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force, which includes members of the Connecticut State Police, Hartford Police Department, East Hartford Police Department, Connecticut Department of Correction and Connecticut National Guard. The Connecticut State Police’s Emergency Services Unit, Hartford Police Department’s Emergency Response Team, Capital Region Emergency Response Team, Drug Enforcement Administration, Homeland Security Investigations and the New Britain, East Hartford, Wethersfield and Manchester Police Departments have provided valuable assistance to the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Brian Leaming and Patrick Caruso.
Long Island Registered Sex Offender Pleads Guilty to Downloading Child PornographyRead the Press Release
Earlier today, William D. Gulick, Jr., a registered sex offender from Commack, Long Island, pled guilty at the federal courthouse in Central Islip, New York, to receiving child pornography in interstate commerce. The proceeding took place before United States Magistrate Judge Steven I. Locke. At sentencing, Gulick faces a mandatory minimum sentence of 15 years in prison and a maximum of 40 years in prison.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.
“Registered Sex Offenders such as the defendant are on notice that we are committed to protecting children and will vigorously prosecute those who victimize them,” stated United States Attorney Capers. “The penalties for repeated child exploitation offenses under federal law are deservedly severe.” Mr. Capers thanked the U.S. Immigrations Customs Enforcement’s (ICE), Homeland Security Investigations (HSI) and the Suffolk County Police Department (SCPD) for their assistance in the investigation.
As detailed in the indictment and court filings, in the fall of 2014, HSI agents, as part of an ongoing effort to locate individuals sharing child pornography, traced child pornography observed via peer-to-peer online trading software back to the defendant’s Commack residence. The images and videos he downloaded involved the rape of children as young as toddlers. During execution of a search warrant on the residence, SCPD Emergency Services officers were forced to use a Taser device to disarm and apprehend the defendant.
Gulick, Jr. is a registered sex offender based upon a prior child abuse conviction in Suffolk County in 1998 for Sexual Abuse in the 1st Degree and a 2013 conviction for Possessing a Sexual Performance of a Child under 16. At the time of his arrest in this case, the defendant was on probation for the 2013 conviction and had recently been released from custody.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Allen Bode is in charge of the prosecution.
The Defendant:
William D. Gulick, Jr.
Age: 36
Commack, New YorkE.D.N.Y. Docket No. 14 CR 608 (ADS)
Local officials prepared to transition inmates back into Northern West Virginia communitiesRead the Press Release
WHEELING, WEST VIRGINIA – Beginning November 2, 44 federal inmates will return to the Northern District of West Virginia pursuant to the United States Sentencing Commission’s decision to modify the sentencing guidelines for certain federal drug offenses, United States Attorney William J. Ihlenfeld, II, and Chief U.S. Probation Officer Terry L. Huffman announced.
In 2014, after receiving nearly 80,000 public comments and holding two public hearings, the United States Sentencing Commission voted unanimously to modify the sentences of certain federal drug offenders. Congress then considered the Sentencing Commission’s recommendation and did not vote to disapprove the sentencing change. The change became effective November 1, 2014. The Commission allotted one calendar year for courts and the Bureau of Prisons to prepare for the releases.
“Some current Bureau of Prisons inmates are scheduled for an early release beginning November 2. As we always do, we have notified area law enforcement agencies about the release of these individuals. We have also entered their names into a national database to ensure that law enforcement everywhere will know that these individuals are under supervised release,” noted Huffman. “While the number of inmates returning nationwide is large, here in the Northern District of West Virginia the number of releases is very manageable. This has been an issue where we have had adequate notice. We have had over a year to prepare for these inmates being released, and we are prepared to monitor them once they are released.”
Approximately 68% of inmates returning to Northern West Virginia have already been placed under supervision in halfway houses (43%) or home confinement (25%). Approximately 26% of inmates returning to Northern West Virginia will be released from prison. Additional inmates currently incarcerated within the Northern District of West Virginia may be released to other districts or to U.S. Immigration and Customs Enforcement for potential deportation. The Bureau of Prisons and United States Probation and Pretrial Services have collaborated to ensure that all released inmates receive proper supervision and reentry services.
“The Bureau of Prisons has extensive experience in successfully transitioning inmates back into society,” noted Ihlenfeld. “We are confident the upcoming release will have a minimal impact upon the communities in Northern West Virginia. We are not anticipating a large influx of prisoners released into our district and those inmates that are released will be closely supervised as they transition back into our neighborhoods. ”
The sentencing reductions are not automatic. Federal judges must carefully consider public safety and have the discretion to approve or deny the reduction of a particular inmate’s sentence. As of July 2015, judges had denied approximately 25% of petitions received across the country. Many of the federal drug offenders will serve substantial prison sentences before they are eligible for release.
The United States Sentencing Commission is an independent agency in the judicial branch composed of seven voting and two non-voting members. Its principal purpose is to establish sentencing policies and practices for the federal criminal justice system that will assure the ends of justice by promulgating detailed guidelines prescribing the appropriate sentences for offenders convicted of federal crimes.
Local Law Enforcement Officers Honored for Commitment to Drug Abuse PreventionRead the Press Release
CEDAR RAPIDS - Three local police officers were honored today by the United States Attorney’s Office for the Northern District of Iowa and the Drug Enforcement Administration (DEA) for their commitment to reducing drug abuse in their communities. The recipients of the 2015 Enrique S. Camarena Award are Detective Jerry Blomgren and Officer David Schwindt of the Iowa City Police Department, and Sergeant David Dostal of the Cedar Rapids Police Department.
The award is named after Enrique “Kiki” Camarena, who was an 11 year veteran agent of the DEA before being kidnapped, brutally tortured and then murdered in Mexico in 1985 while working undercover gathering information and evidence about drug lords. This award is presented each year to local law enforcement officers who best exemplify the qualities and principles for which Agent Camarena gave his life—specifically, making their communities a safer place to live through outstanding drug prevention and enforcement efforts.
Kevin W. Techau, United States Attorney for the Northern District of Iowa commented on this year’s award recipients, stating, “The communities these officers serve are safer because of their hard work and dedication. They richly deserve the honor of being this year’s award recipients.”
This year’s award recipients have gone above and beyond the call of duty in pursuit of a drug-free community:
- Recognizing the harm that synthetic drugs were having on the Iowa City area, Detective Jerry Blomgren and Officer David Schwindt worked with several law enforcement entities and utilized a variety of investigative techniques to remove over 100 pounds of synthetic drugs from the street. They also participated in numerous community meetings providing education regarding the hazards of synthetic drugs.Through their efforts, synthetic drugs are now virtually non-existent in the Iowa City area.
- As the supervisor of the Narcotics Division with the Cedar Rapids Police Department, Sgt. David Dostal has taken a leadership role in tackling the heroin problem that has plagued the Cedar Rapids community. In addition to presenting at schools, community groups, and youth academies regarding the dangers of heroin and other illicit drugs, Sgt. Dostal took the lead in a high-profile heroin case that resulted in two federal indictments and which seriously disrupted the heroin drug trade in the Cedar Rapids area.
Michael J. Sanders, the Assistant Special Agent in Charge for the DEA commented on this year’s award, stating “It is an honor to be a part of such a well-deserved, distinguished award, presented in memory of fallen DEA Special Agent Enrique S. Camarena, who spent his career fighting against the powerful drug cartels in Mexico. This eminent award exemplifies the outstanding investigative efforts of these three dedicated law enforcement officers in disrupting the illegal activities of these drug trafficking organizations and preventing the further distribution of these highly addictive, deadly drugs, in and around the Iowa City and Cedar Rapids communities.”
The Enrique S. Camarena Award is presented each year during Red Ribbon Week. Red Ribbon Week is an alcohol, tobacco, and drug prevention awareness campaign observed annually in the United States. This year, Red Ribbon Week runs from October 23 through October 31.
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Lincoln county nurse sentenced in Federal court for obtaining drugs by fraudRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced that Betty Jo Tudor, 35, of Alkol, West Virginia, was sentenced today in federal court in Charleston to five years of probation for obtaining hydrocodone by fraud. Tudor, a former nurse at Sweetbriar Assisted Living in Dunbar, West Virginia, previously pled guilty and admitted that in June of 2013 she stole hydrocodone intended for patients for her own personal use and falsified records to cover up the theft.
The case was investigated by the Drug Enforcement Administration and the United States Department of Health and Human Services. Assistant United States Attorney Jennifer Rada Herrald 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 United States 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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Large Scale Miami Drug Supplier Pleads Guilty in Nationwide Prescription Drug Diversion SchemeRead the Press Release
The Department of Justice announced that a South Florida man pleaded guilty in U.S. District Court in Cincinnati, Ohio, in connection with the prosecution of a nationwide prescription drug diversion scheme.
Ricardo Alfredo Jurado, 59, of Miami Beach, pleaded guilty before U.S. District Court Judge Timothy S. Black to one count of conspiracy to commit mail and wire fraud.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division; U.S. Attorney Carter M. Stewart of the Southern District of Ohio; Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI), Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS), Cincinnati Field Office, announced the guilty plea.
“Prescription drug diversion compromises the integrity of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer. “This Miami-based supplier sold tens of millions of dollars of illegally diverted drugs, which ended up on the shelves of pharmacies and in the medicine cabinets of American consumers.”
“The drug diversion activities charged in this case create unacceptable public health risks,” said U.S. Attorney Stewart. “Patients purchased what they believed were FDA-approved prescription drugs that had remained in regulated distribution channels intended to protect against misbranded, adulterated, sub-potent, improperly handled, counterfeit and stolen products. Instead, these customers received drugs of unknown quality and origin.”
Jurado sold illegally diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC). On May 6, Miller and MIC, along with Artur Stepanyan and Mihran Stepanyan, were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, ten counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license. Those charges are still pending. Jurado is the eighth co-conspirator who pleaded guilty for participating in the drug diversion scheme involving Miller and MIC.
Miller and MIC sold the prescription drugs obtained through Jurado – along with multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio. Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico. These false pedigrees covered up the illegitimate sources of the drugs – various illicit suppliers, including Jurado – and falsely stated that B&Y was an authorized distributor of the prescription drugs.
According to court documents, from July 2007 through April 2014, Jurado facilitated the sale of tens of millions of dollars of illegally diverted prescription drugs to Miller and MIC. Jurado obtained the drugs from other illicit, unlicensed sources in South Florida. To hide Jurado’s involvement in the sale of these drugs, Jurado and Miller used a middleman, Fernando Galan. On Oct. 14, Galan pleaded guilty for his role in the conspiracy. Neither Jurado nor Galan was licensed to engage in the wholesale distribution of prescription drugs.
In connection with the sale of the diverted drugs, Jurado sent bank wiring instructions, frequently through his middleman Galan, directing Miller to send payments for the drugs. During the course of the entire conspiracy, Jurado and his co-conspirators directed payments to more than 25 different bank accounts at banks in Mexico, Nicaragua, Canada, Florida and other locations. During the course of the conspiracy, Miller and MIC wired more than $40 million to the bank accounts specified by Jurado.
This matter is being investigated by FDA-OCI and the USPIS. Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in this case.
Large Scale Miami Drug Supplier Pleads Guilty in Nationwide Prescription Drug Diversion SchemeRead the Press Release
WASHINGTON – The Department of Justice announced that a South Florida man pleaded guilty in U.S. District Court in Cincinnati, Ohio, in connection with the prosecution of a nationwide prescription drug diversion scheme.
Ricardo Alfredo Jurado, 59, of Miami Beach, pleaded guilty before U.S. District Court Judge Timothy S. Black to one count of conspiracy to commit mail and wire fraud.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division; U.S. Attorney Carter M. Stewart of the Southern District of Ohio; Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI), Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS), Cincinnati Field Office, announced the guilty plea.
“Prescription drug diversion compromises the integrity of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer. “This Miami-based supplier sold tens of millions of dollars of illegally diverted drugs, which ended up on the shelves of pharmacies and in the medicine cabinets of American consumers.”
“The drug diversion activities charged in this case create unacceptable public health risks,” said U.S. Attorney Stewart. “Patients purchased what they believed were FDA-approved prescription drugs that had remained in regulated distribution channels intended to protect against misbranded, adulterated, sub-potent, improperly handled, counterfeit and stolen products. Instead, these customers received drugs of unknown quality and origin.”
Jurado sold illegally diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC). On May 6, Miller and MIC, along with Artur Stepanyan and Mihran Stepanyan, were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, ten counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license. Those charges are still pending. Jurado is the eighth co-conspirator who pleaded guilty for participating in the drug diversion scheme involving Miller and MIC.
Miller and MIC sold the prescription drugs obtained through Jurado – along with multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio. Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico. These false pedigrees covered up the illegitimate sources of the drugs – various illicit suppliers, including Jurado – and falsely stated that B&Y was an authorized distributor of the prescription drugs.
According to court documents, from July 2007 through April 2014, Jurado facilitated the sale of tens of millions of dollars of illegally diverted prescription drugs to Miller and MIC. Jurado obtained the drugs from other illicit, unlicensed sources in South Florida. To hide Jurado’s involvement in the sale of these drugs, Jurado and Miller used a middleman, Fernando Galan. On Oct. 14, Galan pleaded guilty for his role in the conspiracy. Neither Jurado nor Galan was licensed to engage in the wholesale distribution of prescription drugs.
In connection with the sale of the diverted drugs, Jurado sent bank wiring instructions, frequently through his middleman Galan, directing Miller to send payments for the drugs. During the course of the entire conspiracy, Jurado and his co-conspirators directed payments to more than 25 different bank accounts at banks in Mexico, Nicaragua, Canada, Florida and other locations. During the course of the conspiracy, Miller and MIC wired more than $40 million to the bank accounts specified by Jurado.
This matter is being investigated by FDA-OCI and the USPIS. Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in this case.
Justice Department Settles with Housing Authority of Baltimore City for Failure to Provide Accessible Housing to Persons with DisabilitiesRead the Press Release
The Justice Department announced today that a federal district court has approved a supplemental consent decree between the United States, the Maryland Disability Law Center and the Housing Authority of Baltimore City (HABC). The original consent decree contained remedies for HABC’s failure to provide accessible housing to persons with disabilities. The supplemental consent decree, which was approved today by U.S. District Judge J. Frederick Motz of the District of Maryland, continues and amends certain terms in the original consent order in United States v. HABC, and Bailey v. HABC, entered on Dec. 20, 2004.
“We are pleased with the significant progress made by the Housing Authority of Baltimore City to implement the terms of the original decree,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “We look forward to working with the Housing Authority to create new accessible housing opportunities for persons with disabilities and enhancing their quality of life.”
The original consent decree mandates that HABC create 756 units to comply with federal accessibility standards. As of Aug. 31, 2015, HABC had developed all but 54 of such units. Under the supplemental decree, these remaining units will be completed by Dec. 31, 2016. HABC’s plan requires two and three bedroom single family homes that are fully accessible to families with a household member who has physical disabilities.
The original consent decree also mandates that HABC create 500 units for non-elderly persons with disabilities. As of Aug. 31, 2015, HABC had created 411 such units. Under the supplemental decree, the remaining units will be completed by Dec. 31, 2016. Further, the original consent decree mandates that HABC create 100 new housing opportunities for non-elderly persons with disabilities called “Long Term Affordable” units. HABC has until Dec. 31, 2017, to develop the remaining balance of these units from certain specified developments.
HABC is participating in the Rental Assistance Demonstration Program. Under this program, HABC will be transferring certain public housing properties to private ownership. Under the supplemental decree, the new owners are required to preserve the accessibility of the units and implement the policies and practices that protect the rights of tenants with disabilities.
The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the division’s Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
HABC Supplemental Consent Decree
Jury Convicts Springfield Sex Offender for Production of Child PornographyRead the Press Release
Springfield, Ill. — A jury deliberated for approximately three and one-half hours this afternoon before returning verdicts of guilty against Marcus B. Fifer, 44, for production of child pornography. Fifer, of Springfield, was convicted on 17 counts of sexual exploitation of a minor to produce child pornography and one count of committing a felony offense with a minor while being required to register as a sex offender. The jury returned not guilty verdicts on six counts of sexual exploitation of a minor. U.S. District Judge Sue E. Myerscough presided over the trial which began on Tuesday, Oct. 27. Judge Myerscough scheduled sentencing for Fifer on Feb. 29, 2016.
At sentencing, Fifer faces mandatory life in prison for each count of sexual exploitation of a minor in the production of child pornography. Fifer was remanded to the custody of the U.S. Marshals Service. Fifer has remained detained in the Marshals’ custody since his arrest in February 2014.
At trial, the government presented evidence that from April 1, 2013 through Nov. 18, 2013, Fifer used a cell phone, tablet and laptop computer to take images of a minor. Further evidence from the government established that Fifer previously pled guilty in 2008, in Champaign County, Ill., to aggravated criminal sexual abuse, and at the time of the offenses for which Fifer was convicted today, he was required to register as a sex offender.
The charges are the result of an investigation by U.S. Immigration and Customs Enforcement Homeland Security Investigations in cooperation with the Springfield Police Department. Assistant U.S. Attorneys John E. Childress and Matthew Z. Weir are prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Jury Convicts Orlando Women of Conspiring to Pass and Possess Counterfeit CurrencyRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Sandra Milena Nieves (41) and Eileen Santos (50), both of Orlando, guilty of conspiring to pass and possess counterfeit currency. The jury also convicted Nieves on substantive counts of passing and possessing counterfeit currency and Santos on a substantive count of possessing counterfeit currency. Nieves and Santos each face a maximum penalty of 45 and 25 years in federal prison, respectively. They were indicted on June 2, 2015. Their sentencing hearing is scheduled for January 21, 2016.
According to testimony and evidence presented at trial, between December 2011 and January 2012, Nieves, Santos, along with co-conspirators Jorge Ortiz-Pulgarin, Ramon Rodriguez, Carlos Fuentes, and others, traveled from central Florida up the east coast of the United States with approximately $40,000 in counterfeit currency. The group stopped at more than 30 locations to make small purchases. They used counterfeit $100 bills and received genuine U.S. currency as change. During the road trip, in December 2011, conspirators attempted to pass a counterfeit bill at a mall in Melbourne, Florida. The serial number on the bill matched the number of other counterfeit bills that were subsequently seized from co-conspirators.
In January 2012, Jorge Ortiz-Pulgarin was arrested with $6,500 in counterfeit currency. Shortly thereafter, another member of the conspiracy, Fabian Ortiz, was arrested with more than $200,000 in counterfeit currency. Ortiz-Pulgarin and Ortiz were each federally charged, convicted, and sentenced for their roles in the conspiracy. Ramon Rodriguez and Carlos Fuentes have pleaded guilty for their roles in this conspiracy and are scheduled to be sentenced on November 5, 2015.
This case was investigated by the United States Secret Service. It is being prosecuted by Assistant United States Attorneys Embry J. Kidd and Shawn P. Napier.
Inland Empire Man Convicted of Threatening to Kill Federal OfficerRead the Press Release
LOS ANGELES – A man who threatened to kill a United States Forest Service Law Enforcement Officer who came to the man’s home to ask about trash dumped in the San Bernardino National Forest has been convicted by a federal jury.
Richard Latka, 56, of Hemet, was convicted yesterday afternoon in United States District Court of threatening a federal officer.
According to the evidence presented at the trial, the Forest Service Officer went to a residence in Hemet in October 2014 to investigate trash that had recently been dumped in the nearby national forest. The officer encountered Latka in the front yard of the residence, and Latka reacted angrily when the officer said he wished to speak to “Mr. Morales” without telling Latka why. Latka then ran toward the officer with clenched fists. Believing that Latka intended to hit him, the officer drew his Taser gun. Latka stopped running but continued screaming at the officer. The officer tried to remove himself from the situation by getting into his car, but Latka continued to scream at the officer and pounded on the window of the marked law enforcement vehicle with his fist. The officer drove away, but Latka followed in his own car, yelling “next time you’re dead.” Witnesses reported that Latka later said that he would “get” the officer and that he was going to kill him.
“Threatening the lives of law enforcement officers will not be tolerated,” said United States Attorney Eileen M. Decker. “The officer in this case took many steps to de-escalate the situation and prevent it from getting worse. If not for the officer’s professionalism and calm, the defendant’s conduct could have become more violent and dangerous.”
United States District Judge Dale S. Fischer, who presided over the trial, set sentencing for January 25, 2016, at which time Latka will face a statutory maximum penalty of 10 years in federal prison, a three-year period of supervised release, and a fine of $250,000.
The case against Latka is the product of an investigation by the United States Forest Service.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Anderson in Billings, on October 28, 2015 and entering pleas of Not Guilty were:
- BRETT WADE CLOUSE, a 36-year-old resident of Absarokee, appeared on charges of conspiracy to possess with intent to distribute methamphetamine, possession with intent to distribute methamphetamine, conspiracy to commit money laundering, and possession of a firearm in furtherance of a drug trafficking crime. If convicted of the most serious charges contained in the indictment, CLOUSE faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Drug Enforcement Administration and the Federal Bureau of Investigation. PACER Case Reference. 15-127
- MAYNARD PAUL CROOKED ARM, a 51-year-old resident of Crow Agency, appeared on charges of conspiracy to distribute methamphetamine and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, CROOKED ARM faces 20 years in prison, $1,000,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Indian Affairs. PACER Case Reference. 15-128
- RINDA LEE MORGAN, a 42-year-old resident of Helena, appeared on charges of conspiracy to possess with intent to distribute methamphetamine, and possession with intent to distribute methamphetamine. If convicted of the most serious charge contained in the indictment, MORGAN faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Drug Enforcement Administration and the Federal Bureau of Investigation. PACER Case Reference. 15-127
- JESSE DALE VANHOOK, a 32-year-old resident of Missoula, appeared on charges of felon in possession of a firearm. If convicted of the charge contained in the indictment, VANHOOK faces 10 years in prison, $250,000,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-23
Appearing before U.S. Magistrate Johnston in Great Falls, on October 28, 2015 and entering pleas of Not Guilty were:
- SCOTT MITCHELL BUMMER, a 51-year-old resident of Helena, appeared on charges of conspiracy to possess with intent to distribute and to distribute methamphetamine, possession with intent to distribute methamphetamine, and possession of firearms in furtherance of a drug trafficking crime. If convicted of the most serious charges contained in the superseding indictment, BUMMER faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Russell Country Drug Task Force. PACER Case Reference. 15-46
- ULYSSES GARCIA, a 26-year-old resident of Salem, Oregon, appeared on charges of possession with intent to distribute methamphetamine. If convicted of the charge contained in the indictment, GARCIA faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the Bureau of Indian Affairs. PACER Case Reference. 15-74
- LLOYD THOMAS RIDER, III, a 28year-old resident of Great Falls, appeared on charges of felon in possession of a firearm. If convicted of the charge contained in the indictment, RIDER faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Indian Affairs. PACER Case Reference. 15-68
- PETER MICHAEL RUSSETTE, a 37-year-old resident of Great Falls, appeared on charges of felon in possession of a firearm and obstruction of justice – witness tampering. If convicted of the most serious charge contained in the indictment, RUSSETTE faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 15-67
Appearing before U.S. Magistrate Johnston in Great Falls, on October 27, 2015 and entering pleas of Not Guilty were:
- KALVIN JOSEPH GOBERT, a 29-year-old resident of Browning, appeared on charges of sexual abuse of a minor. If convicted of the charge contained in the indictment, GOBERT faces 15 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Bureau of Indian Affairs. PACER Case Reference. 15-75
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Honduran National Sentenced for Illegally ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JUAN VASQUEZ-ALVARADO, age 47, a citizen of Honduras, was sentenced today after previously pleading guilty to a one-count Indictment for illegal reentry of a removed alien.
U.S. District Judge Carl J. Barbier sentenced VASQUEZ-ALVARADO to time served and a $100 special assessment. VASQUEZ-ALVARADO will be surrendered to the custody of the U.S. Immigration & Customs Enforcement for removal proceedings.
According to court documents, VASQUEZ-ALVARADO was found in the United States on July 2, 2015, after having been officially deported and removed on or about September 2, 2002.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant United States Attorney Spiro G. Latsis is in charge of the prosecution.
Honduran National Charged with Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JIMY NAHUN NUÑEZ-IZAGUIRRE, age 31, a citizen of Honduras, was charged today in a one-count Bill of Information with illegal reentry of a removed alien.
According to the Bill of Information, NUÑEZ-IZAGUIRRE reentered the United States on or about October 1, 2015, after having been previously removed therefrom on or about July 25, 2008.
If convicted, NUÑEZ-IZAGUIRRE faces a maximum term of imprisonment of two years, a fine of up to $250,000.00, one year supervised release after imprisonment, and a $100 special assessment.
U.S. Attorney Polite reiterated that a Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, Immigration and Customs Enforcement in investigating this matter. Assistant United States Attorney Irene González is in charge of the prosecution.
Godfather of Portsmouth Bloods Gang Sentenced to Life in PrisonRead the Press Release
NORFOLK, Va. – Christopher Smith, aka Killa, 32, of Portsmouth, was sentenced today to life in prison for conspiring to manufacture, distribute, and possess with intent to distribute over one kilogram of heroin and for possessing a firearm in furtherance of that conspiracy.
Also sentenced today were co-conspirators Howard Foust (223 months), Dwayne Banks (135 months), and Ricky Jackson (280 months).
Smith, the former “Godfather” of the Portsmouth-based Imperial Gangsta Bloods, a set affiliated with the United Blood Nation, pleaded guilty on July 28, 2015. According to court documents, from early 2014 until September 2014, Smith and others working at his direction traveled to New York City, where they bought bulk quantities of heroin from Imperial Gangsta Bloods member Jackson, aka Sosa. The heroin was transported from New York City back to the Hampton Roads area where it was cut and prepared for street-level distribution by other members of the gang, including high-ranking members Junious Whitaker, aka “Redd,” and Foust, aka “Lil’ Howard” (Case details on Jackson, Whitaker, Foust and Jermarrieo Stigger are in the table presented below).
In August 2014, Smith and other members of the gang were involved a series of violent altercations with twin brothers Jason and Jeremy Saunders, who ran a separate heroin trafficking organization in Portsmouth. On Aug. 18, 2014, a member of the Imperial Gangsta Bloods shot Jeremy Saunders multiple times. Saunders survived the shooting. Days later, Smith, Whitaker and another IGB gang member were involved in a separate shooting incident with the Saunders brothers (both of whom were later convicted in a separate federal drug prosecution). Several weeks after the second August shooting, Smith, Foust and two other individuals were stopped on the Eastern Shore of Virginia on their way back from New York City, where they had purchased approximately 275 grams of heroin.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by U.S. District Judge John A. Gibney, Jr. Assistant U.S. Attorneys Andrew Bosse and Joseph DePadilla prosecuted the case.
This case was investigated by the FBI’s Norfolk field office in conjunction with the ATF, the Portsmouth, Virginia Beach, and Norfolk Police Departments, and the Virginia State Police. This investigation was part of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal, multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
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. 2:15-cr-7.
Name
Age, Hometown
Charges
Status
Christopher Smith
32, Portsmouth
Conspiring to manufacture, distribute, and possess with intent to distribute over one kilogram of heroin; Possession of Firearms in Furtherance of a Drug Trafficking Crime
Pleaded guilty July 28. Sentenced to life in prison today.
Ricky Jackson
37, Hempstead, New York
Conspiracy to Distribute Narcotics
Pleaded guilty May 28, 2015. Sentenced to 280 months in prison today.
Junious Whitaker
28, Portsmouth
Conspiracy to Distribute Narcotics; Possession of Firearms in Furtherance of a Drug Trafficking Crime
Pleaded guilty March 18, 2015. Sentenced June 23, 2015 to 300 months in prison.
Howard Foust
31, Portsmouth
Conspiracy to Distribute Narcotics
Pleaded guilty Feb. 2, 2015. Sentenced to 223 months in prison today.
Jermarrieo Stigger
30, Virginia Beach
Conspiracy to Distribute Narcotics; Possession of Firearms in Furtherance of a Drug Trafficking Crime
Pleaded guilty on June 15. Sentenced Sept. 24, 2015 to 420 months in prison.
Dwayne Banks
XX, Portsmouth
Conspiracy to Distribute Narcotics
Pleaded guilty on July 30. Sentenced to 135 months in prison today.
####
Four Defendants Sentenced in Private Insurance Health Care Fraud SchemesRead the Press Release
Four defendants sentenced for their participation in various private health care fraud schemes.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, J.D. Patterson, Director, Miami-Dade Police Department (MDPD), Ian A. Moffett, Chief, Miami-Dade Schools Police Department, Rodolfo Llanes, Chief, Miami Police Department (MPD), and Sergio Velazquez, Chief, Hialeah Police Department, made the announcement.
Hendris Castillo Morales, 33, of Miami, Maite Garcia, 40, of Hialeah, Osvaldo Marin Medina, 48, of Hialeah, and Alejandro Biart, 40, of Miami, were sentenced following their respective guilty pleas for their participation in schemes to defraud privately insured health care plans located in Miami-Dade County, including Cigna, Blue Cross Blue Shield (BCBS), United Health Care (UHC), Miami-Dade County Public Schools, City of Miami, Pepsi Co., BJ’s Wholesale Club, Inc., Lincoln Property Company, Macy’s Inc., Nextera Energy Inc., Radioshack Corporation, Sodexo, Inc., Southeast Frozen Foods Company LP, and other self-insured employers which offered Administrative Services Only (ASO) insurance plans to their employees. ASO insurance plans reimbursed Cigna, BCBS, and UHS for the money paid out by the insurance companies for health benefits for their respective employees. Therefore, the employers acted in a self-insured role, making them financially responsible for any claim payments to their employees.
The Honorable Robert N. Scola, Jr., United States District Judge, sentenced Hendris Castillo Morales to a term of 121 months’ incarceration, followed by a three-year term of supervised release and ordered restitution in the amount of $13,853,392. Judge Scola sentenced Maite Garcia to a term of 48 months’ incarceration, followed by a three-year term of supervised release and ordered restitution in the amount of $13,853,392.
The Honorable Ursula Ungaro United States District Judge, sentenced Osvaldo Medina to a term of 41 months’ incarceration, followed by a three-year term of supervised release. Judge Ungaro sentenced Alejandro Biart to a term of 41 months’ incarceration, followed by a three-year term of supervised release.
These four defendants are among fifteen individuals who have pled guilty to federal health care fraud conspiracy charges in two cases, United States v. Reynaldo Castillo, et al., Case No. 15-20144-Cr-Scola, and United States v. Ernesto Castillo, et al., Case No. 15-20177-Cr-Ungaro.
As alleged in the indictment in Case No. 15-20144-Cr-Scola, Reynaldo Castillo, Hendris Castillo Morales, Lisbet Castillo Batista, and Maite Garcia owned and controlled 30 companies based in Miami, Hialeah, Hialeah Lakes, and Doral, Florida. These individuals used medical director staffing companies to obtain and misappropriate the names and licensing information for numerous physicians. This information was then used to submit false and fraudulent claims to the private insurance plans.
The indictment further alleges that Alejandro Biart accepted kickbacks from co-conspirators in return for referring Cigna, BCBS, and UHC beneficiaries to the medical clinics controlled by Reynaldo Castillo, Hendris Castillo Morales, Lisbet Castillo Batista, and Maite Garcia. These beneficiaries signed documents falsely and fraudulently representing that they had received medical services when, in fact, they had not received medical services.
The indictment additionally charges Maite Garcia for her role in paying kickbacks and bribes to certain beneficiaries in order to reimburse the beneficiaries for their monthly premium payments to Cigna.
According to the indictment, Osvaldo Marin Medina, Humberto Martinez Rodriguez, Alejandro Jesus Cura, Dania Chavez, Ezequiel Severo Casas, Jose Gerardo Gonzalez, Julio Suarez, Nelson Ramos, Reinaldo Cinta Gonzalez, Rudy N. Dominguez and Duilys Martinez agreed, in exchange for a fee, to have companies be placed in their names, to open bank accounts and check cashing accounts in the names of the companies, and to cash and deposit checks received from Cigna, BCBS, and UHC.
The indictment alleges that as a result of this scheme, Reynaldo Castillo together with his co-conspirators, submitted and caused to be the submitted false and fraudulent claims to private insurance plans, including Cigna, BCBS, UHC, and ASO insurance plans managed by Cigna, BCBS, and UHC, on behalf of the medical clinics seeking approximately $125,676,324.00, as reimbursement for injection treatments, physical therapy treatments, and other medical items and services which were neither ordered by a physician nor provided to a beneficiary as claimed. Based on these false and fraudulent claims, Cigna, BCBS, and UHC, as well as, ASO insurance plans managed by Cigna, BCBS, and UHC, paid the medical clinics approximately $13,853,392.00.
The indictment further alleges that Reynaldo Castillo, Lisbet Castillo Batista, and Hendris Castillo incorporated Investors Group of Florida Corp. to receive proceeds from the medical clinics and utilized those proceeds to purchase real estate properties. Investors Group of Florida Corp. was listed as owner of the purchased real estate properties and acted as the leasing agent. Reynaldo Castillo was the president and registered agent of Investors Group of Florida Corp. The real properties are subject to criminal forfeiture as specified in the indictment.
Osvaldo Marin Medina and Alejandro Biart were also charged in United States v. Ernesto Castillo, et al., Case No. 15-20017-Cr-Ungaro, together with Ernesto Castillo, 43, of Hialeah, and Danny Jacomino Bordon, 50, of Miami, for Conspiracy to Commit Health Care Fraud and Health Care Fraud.
The indictment in Case No. 15-20017-Cr-Ungaro alleges that Ernesto Castillo, Osvaldo Marin Medina, Alejandro Biart, Danny Jacomino Bordon, and their co-conspirators submitted and caused Amazing Medical Services Inc. (Amazing) to submit claims to Cigna seeking reimbursement in the amount of approximately $1,111,183.00, which claims falsely and fraudulently represented that medical services were prescribed by a doctor and provided to Cigna beneficiaries by Amazing. As a result of such false and fraudulent claims, Cigna made payments to Amazing in the approximate amount of $86,035.00.
The indictment further alleges that Ernesto Castillo, Osvaldo Marin Medina, Alejandro Biart caused Serenity Rehabilitation Center, Inc. (Serenity) to submit fraudulent claims to Cigna seeking reimbursement in approximately $1,806,800.00, which resulted in reimbursement payments to Serenity in the approximate amount of $252,259.00. The defendants also caused World of Rehabilitation Therapy, Inc. (World Rehab) to submit fraudulent claims to Cigna seeking reimbursement in the amount of approximately $2,245,300.00, which resulted in payments to World of Rehab from Cigna in the approximate amount of $889,151.00.
The indictment also alleges that defendant Alejandro Biart accepted kickbacks from co-conspirators in return for referring Cigna beneficiaries to Amazing, Serenity, and World of Rehab.
Mr. Ferrer thanked the FBI, ICE-HSI, MDPD, Miami-Dade Schools Police Department, MPD, and the Hialeah Police Department for their investigative efforts. This case is being prosecuted by Assistant U.S. Attorney Christopher J. Clark.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Senate Staffer Sentenced to 38 Months for Defrauding Three WomenRead the Press Release
A former staff member of the U.S. Senate Committee on Commerce, Science and Transportation was sentenced today to 38 months in prison for a wire fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office.
Robert Lee Foster, 65, formerly of Falls Church, Virginia, was also ordered to forfeit $499,622.54 and pay $503,003.37 in restitution as part of his sentence, which was imposed by Senior U.S. District Judge T.S. Ellis III of the Eastern District of Virginia. Foster pleaded guilty on July 31, 2015.
According to admissions made in connection with his guilty plea, between 2008 and May 2015, Foster devised a scheme to fraudulently obtain approximately $500,000 from three women in their 60s and 70s. Foster admitted that, to perpetuate the scheme, he gained the victims’ trust and confidence, after which he made various false statements to the victims to convince them to send him money. Among other things, Foster admitted that he told his victims he needed to borrow money to pay for litigation costs and business expenses that did not exist and for foreign travel that did not occur. Foster also admitted that he promised to repay the victims from large sums of money he claimed he was about to receive, which was another lie.
This case was investigated by the FBI’s Washington Field Office. Trial Attorneys Peter Halpern and Kevin Driscoll of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Jamar Walker and Ryan Faulconer of the Eastern District of Virginia prosecuted the case.
Former Senate Staffer Sentenced to 3 Years for Defrauding Three WomenRead the Press Release
ALEXANDRIA, Va. – Robert Lee Foster, a former staff member of the U.S. Senate Committee on Commerce, Science, and Transportation, was sentenced today to 38 months in prison for a wire fraud scheme in which he defrauded three women of approximately $500,000. Foster was also ordered to forfeit $499,622.54 and pay $503,003.37 in restitution as part of his sentence.
Foster, 65, formerly of Falls Church, pleaded guilty on July 31, 2015. According to court documents, between 2008 and May 2015, Foster devised a scheme to fraudulently obtain approximately $500,000 from three women, whom he targeted because of their age, health, marital or family status, and other circumstances. To perpetuate the scheme, Foster gained the victims’ trust and confidence, after which he made various false statements to the victims to convince them to send him money. Among other things, Foster told his victims he needed to borrow money to pay for litigation costs, business expenses, and foreign travel, and that he would repay them from large sums of money he claimed he was about to receive. Foster’s statements were lies: he had no such costs or expenses, he did not even have a valid passport for much of the relevant period, and he was never “about” to receive any large sum of money. Foster spent the money he obtained from the three women for his own personal use and benefit, including more than $44,000 on golf-related expenses and tens of thousands in dining and clothing expenses. Foster received at least 10 separate wire transfers totaling $9,446.02 from Person A, a 61 year-old woman; 159 separate wire transfers totaling $461,676.52 from Person B, a 75 year-old woman; and 19 separate wire transfers totaling $28,500 from Person C, a 77 year-old woman.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division; and Paul M. Abbate, Assistant Director in Charge of the FBI’S Washington Field Office, made the announcement after sentencing by U.S. District Judge T. S. Ellis, III. Assistant U.S. Attorneys Jamar Walker and Ryan Faulconer, and Trial Attorneys Peter Halpern and Kevin Driscoll of the Public Integrity Section in the Justice Department’s Criminal Division prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-148.
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Former Immigration Officer Pleads Guilty to Concealing Relationship with Foreign National During Security Clearance InvestigationRead the Press Release
Jacksonville, Florida. – United States Attorney A. Lee Bentley, III announces that Paul Reynolds Friel, Jr. (47, Orange Park) pleaded guilty today to concealing material facts during an interview with a government agent. He faces a maximum sentence of five years in federal prison. His co-defendant, Marisol Del Carmen Rodriguez Chavarria (40, Orange Park), also pleaded guilty today, to possessing a visa that had been obtained by means of a false statement. She faces a maximum penalty of 10 years in federal prison. The sentencing dates have not yet been set.
According to court documents, Rodriguez entered the United States from Nicaragua on December 10, 2010, on an immigrant visa issued by the State Department. Her visa was granted based on the false representation that she intended to permanently reside with her American spouse, Luis Aguilar, at his residence. Court records indicate that Friel knew Rodriguez from previous trips to Nicaragua and that he had made the reservations and paid for her airfare to the United States. In March 2011, Rodriguez divorced her spouse and moved into an apartment with Friel. Thereafter, she and Friel lived together in a romantic relationship. In March 2012, they were married and later had a child together.
Friel was an immigration officer with U.S. Citizenship and Immigration Services. In December 2011, during a background investigation for a national security clearance, Friel failed to disclose his relationship with Rodriguez, a foreign national.
Rodriguez’s former spouse, Luis Aguilar, previously pleaded guilty to conspiracy to commit visa fraud, and is awaiting sentencing.
This case was investigated by the U.S. Department of Homeland Security, Office of Inspector General, and the Jacksonville office of the Federal Bureau of Investigation. It is being be prosecuted by Assistant United States Attorney Dale Campion.
Former Gates Mills postmaster sentenced to prison for theftRead the Press Release
The former postmaster of the Gates Mills Post Office was sentenced to 10 months in prison and ordered to repay approximately $57,000 that she stole, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Monica Weyler, Special Agent in Charge of the U.S. Postal Service -- Office of Inspector General, Eastern Area Field Office.
Ann Apana, 66, of Maple Heights, Ohio, was previously found on one count of theft of property used by the U.S. Postal Service.
From at least June 12, 2009 until June 15, 2014, as part of a continuing course of conduct, Apana stole approximately $38,741.42 in money and merchandise from the Postal Service and made approximately $18,341.08 in unauthorized purchases of postage using customers’ credit card information.
"The vast majority of the Postal Service's 600,000 employees are hardworking, dedicated individuals worthy of the American public's trust,” Weyler said. “Unfortunately, a small few decide to take advantage of that trust and steal from their employer and customers. Today's sentence shows that special agents with the U.S. Postal Service Office of Inspector General work diligently to identify those few individuals, and seek their prosecution and removal from employment. The message is clear -- if you steal from the Postal Service, you will go to jail and lose your job."
This case is being prosecuted by Assistant U.S. Attorney Miranda E. Dugi following an investigation by special agents of the U.S. Postal Service Office of Inspector General.
Former Bookkeeper Pleads Guilty to Embezzling from Tacoma Charity Thrift StoresRead the Press Release
The former bookkeeper for the St. Vincent de Paul Society Stores of Tacoma, Washington, pleaded guilty today in U.S. District Court in Tacoma to wire fraud and aggravated identity theft, announced United States Attorney Annette L. Hayes. ANGELA TONEY SAUCIDO, 44, moved from the Tacoma area to Phoenix in 2007, but continued to work for the charity as its bookkeeper through March 2013. As part of her plea agreement SAUCIDO will pay more than $543,000 in restitution to St. Vincent de Paul Society stores. Sentencing is scheduled in front of U.S. District Judge Benjamin H. Settle on January 25, 2016.
According to records in the case, the embezzlement scheme involved a variety of frauds. SAUCIDO would transfer funds from the St. Vincent de Paul Society Stores bank accounts to her own bank accounts and falsify entries making it appear the transfers were for legitimate purposes. SAUCIDO forged signatures on checks and made electronic fund transfers to benefit her and her family. SAUCIDO made purchases for her personal use on the St. Vincent de Paul Society Stores Home Depot credit account, and then used the charity’s funds to pay for the purchases. Finally, SAUCIDO used the identities of other employees to make it appear they had received additional pay when in fact she had deposited the money into bank accounts she and her husband controlled.
Wire fraud is punishable by up to 20 years in prison and a $250,000 fine. Aggravated Identity Theft is punishable by a mandatory two years of prison that must follow any term imposed on the wire fraud counts.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Matthew Hampton.
Former Area Controller Sentenced on Fraud & Money Laundering ChargesRead the Press Release
St. Louis, MO – KELLEY BARATTA was sentenced to 30 months in prison involving her scheme to embezzle money from her employer while she was controller of the company. Barrata was also ordered to pay more than $1.2 million in restitution to her former employer.
According to court documents, between 2007 and March 2012, Baratta was employed as controller of Media Management, Inc. (MMI) of Chesterfield, Missouri. She was responsible for payroll, accounts payable and receivable, and certain human resource matters. She initially performed these duties at the offices in Chesterfield, until she relocated to New York State, but continued to work as controller for MMI. After being terminated, MMI discovered that Barrata had embezzled from MMI between 2009 and 2012 by falsifying her salary in computer-based payroll system to cause the system to pay her an inflated salary. Additionally, Baratta was found to have transferred company funds directly to her bank account. In all, Baratta was found to have stolen $1,209,249 over the three-year period.
"The IRS enforces the nation's tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others," said Andrew Thornton, Acting Special Agent in Charge of IRS Criminal Investigation.
Baratta, Auburn, NY, formerly of St. Louis County, pled guilty earlier this year to two felony counts of wire fraud and one felony count of money laundering. She appeared today for sentencing before United States District Judge Rodney Sippel.
This case was investigated by the Internal Revenue Service Criminal Investigation. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
Final Defendant Sentenced in State Department Contracting Fraud Scheme and Contractor Cover-UpRead the Press Release
ALEXANDRIA, Va. – Marvin Hulsey, 52, of Stafford, was sentenced today to one year and one day in prison, and two years of supervised release for conspiracy to commit wire fraud.
According to court documents, Hulsey, who was employed as a program manager for a government contractor, admitted to conspiring with Tony Chandler, 69, of Severn, Maryland, an employee of the State Department, to submit false invoices to the State Department in order to conceal unallowable costs for nutritional supplements purchased by employees under Hulsey’s supervision. As part of the scheme, Hulsey caused the employees to be reimbursed by his employer for the nutritional supplement purchases, and then caused false invoices to be made and submitted to the State Department for the cost of the nutritional supplements. Chandler, as an authorized distributor of the nutritional supplements for a multi-level marketing company, earned commissions in excess of $25,000 from the purchases made by Hulsey’s employees. Despite knowing that he was personally profiting from the sales of the nutritional supplements, Chandler, in his official capacity as an employee of the State Department, approved the majority of the false invoices. The false invoices submitted to the State Department as part of the scheme totaled more than $170,000.
In a related case, Curtis L. Wrenn, Jr., 60, of Triangle, pleaded guilty to making a false statement to the State Department by concealing that an internal investigation conducted by the contractor discovered credible information of fraud involving Chandler and Hulsey. Wrenn as president of the State Department contractor employing Hulsey, learned of Hulsey’s submission of false invoices to the State Department and of Chandler’s role in the scheme. Wrenn knew that he had a responsibility under the Federal Acquisition Regulation to timely disclose to the government credible evidence of fraud, but instead omitted facts related to the fraud from the final letter delivered to the State Department. After submitting the altered letter, Wrenn met with Chandler and told him he had “saved his bacon.” Wrenn later wrote in an email that he told Chandler “to get this resolved with minimal questions or we throw him under the bus.”
Hulsey pleaded guilty on July 24, 2015. In court documents filed on Oct. 5, 2015, Hulsey admitted that he engaged in a second fraud scheme in which he submitted false and inflated claims to the State Department related to a business owned by his wife. This second fraud scheme caused an additional loss of approximately $140,000.
Chandler and Wrenn both pleaded guilty on June 12, 2015, and were both sentenced on Sept. 18, 2015. Chandler was sentenced to six months in prison, while Wrenn was sentenced to one year of probation.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Steve A. Linick, Inspector General for the U.S. Department of State and Broadcasting Board of Governors; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Claud M. Hilton. Special Assistant U.S. Attorney Brian D. Harrison and Assistant U.S. Attorney Grace L. Hill prosecuted the case.
This case was investigated by the U.S. Department of State, Office of Inspector General (DOS-OIG) and the FBI’s Washington Field Office. Substantial assistance was provided by the Criminal Analysis Branch of the DOS-OIG
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-137.
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Federal Way Man Sentenced to Prison for Drug Conspiracy Involving Hash Oil BlastRead the Press Release
A Federal Way man who led an illegal marijuana “medibles” manufacturing operation was sentenced today in U.S. District Court in Tacoma to six years in prison and three years’ supervised release, announced U.S. Attorney Annette L. Hayes. KEVIN WEEKS 25, directed others to use highly flammable butane gas to make hash oil. On May 20, 2014 one operation at a Puyallup residence exploded and caught fire. The evidence showed that after the explosion, WEEKS threatened an associate to keep him working and to attempt to hide WEEKS’ own involvement. WEEKS pleaded guilty in April 2015 to Endangering Human Life While Manufacturing Controlled Substances, Maintaining a Drug Involved Premises and Manufacturing Hash Oil & Marijuana.
At sentencing U.S. District Judge Ronald B. Leighton said “What disturbs the court about this case is the disregard for human life. The process of manufacturing marijuana into hash oil is dangerous and stupid. Threatening other people to do your bidding makes it a perfect storm.”
“No one signed off on the use of dangerous manufacturing methods in residential neighborhoods when they voted to legalize marijuana,” said U.S. Attorney Annette L. Hayes. “Not only did the hash oil manufacturing process that this defendant used risk explosions, the final marijuana product was packaged to appeal to kids using an iconic logo from a children’s breakfast cereal. We will continue to investigate and prosecute these types of cases in coordination with our state and local partners.”
The hash oil manufacturing operation first came to the attention of law enforcement on May 20, 2014 when a large explosion shook a Puyallup residential neighborhood. WEEKS’ co-defendant Seth M. Cleek was working for WEEKS when he manufactured hash oil in the yard at the home and the explosive gas ignited. Butane canisters were hurled in every direction – putting those living near the scene, and first responders at risk. One canister was driven through a plastic planter – demonstrating the force of the explosion. Fortunately Cleek’s family, including an 18-month-old child, was not injured in the blast.
According to records filed in the case, WEEKS was paying Cleek $10 for each “tube” of marijuana he turned into butane honey oil (BHO). The process, which involves forcing butane gas through marijuana clippings packed in a tube, and then boiling off the solvent, can prove highly explosive. The fire resulting from the May 20, 2015 explosion melted the siding on the Puyallup home, damaged a parked car, and destroyed a plastic basketball backboard.
The investigation revealed that WEEKS was the operator of the marijuana “medible” company ‘Cap’n Cosmics. The company had no state license to make marijuana products, and used marketing that mimics the look of the children’s cereal, “Cap’n Crunch.” Even after the explosion at the Puyallup residence, WEEKS continued his hash oil manufacturing at a different location. WEEKS opened the BHO manufacturing operation in an industrial area using a method that could have resulted in a much greater and even more damaging explosion. In all some 1800 pounds of marijuana and marijuana laced food products were seized in the investigation.
The case was investigated by the Puyallup Police Department, Pierce County Sheriff’s Department, the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The Pierce County Prosecutors Office assisted with the case. The case was prosecuted by Assistant United States Attorneys Vince Lombardi and Todd Greenberg.
Employer Support of the Guard and Reserve (Esgr) Honors U.S. Attorney Alicia A.G. LimtiacoRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was presented with the “Above and Beyond” Award on May 23, 2015, by the Employer Support of the Guard and Reserve (ESGR). The awards event was held at the Sheraton Laguna Resort & Spa in Tumon, Guam. U.S. Attorney Limtiaco and the U.S. Attorney’s Office were nominated by an employee of the U.S. Attorney’s Office presently serving in the Guam Air National Guard.
According to the ESGR website, the Above and Beyond Award is presented by ESGR State Committees to recognize employers at the local level who have gone above and beyond the legal requirements of the Uniformed Services Employment and Reemployment Rights Act (USERRA) by providing their Guard and Reserve employees additional, non-mandated benefits such as differential or full pay to offset lost wages, extended health benefits, and other similar benefits. The award is given in limited numbers by state committees to employers who have had at least one of their supervisors/managers recognized with a Patriot Award, and who have signed or agreed to sign a Statement of Support. Statements of Support pledge, among other things, to recognize, honor and enforce USERRA and to encourage opportunities to employ Guardsmen, Reservists, and Veterans.
U.S. Attorney Limtiaco expressed her appreciation to all Veterans and to all service members for their courage and fortitude and their commitment to protecting our freedoms as Americans, and to the ESGR for their continued efforts to raise awareness among employers about the significant role and responsibilities employers have in supporting and protecting the rights of employees in military service.
Student Trainee Clerk Sean Perez, former member of the
U.S. Air Force Reserve, U.S. Attorney Alicia Limtiaco and
AUSA Stephen Leon Guerrero (Major in the Guam Air
National Guard)EEOC Training Held for the Districts of Guam and the NMIRead the Press Release
U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands (NMI), announced that the U.S. Attorney’s Office sponsored training by Glory Gervacio Saure, Director of the Honolulu Local Office for the U.S. Equal Employment Opportunity Commission (EEOC). In her capacity as Director, Ms. Gervacio Saure oversees the EEOC’s operations in the State of Hawaii and the U.S. Territories of Guam, American Samoa, Wake Islands and the Commonwealth of the Northern Mariana Islands.
The half-day training was held at the U.S. Attorney’s Office in Guam on September 17, 2015. The training session reviewed Equal Employment Opportunity laws and recent EEOC updates, including new developments involving sex discrimination (i.e., discrimination against pregnant women and LGBT persons) and rules and regulations on the use of arrest and conviction records in the employment process. The training was attended by approximately 30 members from various sectors of the community.
Glory Gervacio Saure during her presentation.District Man Sentenced to 40 Years in Prison for Killing Man in Northwest WashingtonRead the Press Release
WASHINGTON – Erik Postell, 27, of Washington, D.C., was sentenced today to 40 years in prison for killing a man in 2013 in Northwest Washington, U.S. Attorney Channing D. Phillips announced.
Postell was found guilty by a jury in July 2015 of first-degree murder while armed and three firearms offenses stemming from the slaying of Paul Danzo Tanoh. The verdict followed a trial in the Superior Court of the District of Columbia. Postell was sentenced by the Honorable Lynn Leibovitz. Following his prison term, he will be placed on five years of supervised release.
According to the government’s evidence, on March 21, 2013, at about 2:45 a.m., Postell fatally shot Mr. Tanoh, 24, as Mr. Tanoh sat in the driver's seat of his car, which was stopped in the 1000 block of 17th Street NW. The shooting followed a brief physical altercation between Postell and Mr. Tanoh that took place inside a nearby nightclub 15 minutes earlier.
Following the confrontation at the nightclub, Postell retrieved a .45 caliber handgun from a parked car and tracked down Mr. Tanoh. He then stood alongside Mr. Tanoh's driver's side window and fired at him nine times. Postell fled in a vehicle driven by another man, Michael Smith. Smith, 35, of Camp Springs, Md., previously pled guilty to multiple felonies for his role in the murder of Mr. Tanoh and is to be sentenced Nov. 20, 2015. Postell was taken into custody on Oct. 11, 2013, and had been held without bond ever since.
In announcing the sentence, U.S. Attorney Phillips commended the work of the detectives, officers and others who investigated the case from the Metropolitan Police Department (MPD). He also expressed appreciation for the assistance provided by the U.S. Secret Service; the District of Columbia Department of Forensic Sciences; Bode Technologies; Assistant U.S. Attorney Kellen Dwyer of the U.S. Attorney’s Office for the Eastern District of Virginia; Trial Attorney Jessica N. Moran of the Department of Justice’s Tax Division, and Assistant U.S. Attorney Ellen Chubin Epstein of the U.S. Attorney’s Office for the District of Columbia. In addition, he acknowledged the work of those who handled the murder case for the U.S. Attorney’s Office, including Paralegal Specialists Lynda Randolph, Donville Drummond, Sandra Lane, Alesha Matthews, and Kalisha Johnson-Clark; Litigation Technology Specialists Leif Hickling, Kimberly Smith, Thomas “Ron” Royal, Paul Howell, Aneela Bhatia, Anisha Bhatia, Claudia Gutierrez, Joshua Ellen, and Karen McColman; Intelligence Specialists Sharon Johnson, Zachary McMenamin, and William Hamann; Victim/Witness Advocate Marcia Rinker, and La June Thames, Katina Adams-Washington, and David Foster, all of the Victim/Witness Assistance Unit.
Finally, he commended the work of Assistant U.S. Attorney Michael C. Liebman and former Assistant U.S. Attorney Philip A. Selden, who investigated and prosecuted the case.
District Man Sentenced to 10 Years in Prison for Role in Three Robberies in Northeast WashingtonRead the Press Release
WASHINGTON - Damairzio Wells, 18, of Washington, D.C., has been sentenced to a 10-year prison term on charges stemming from three robberies in Northeast Washington during a three-month period this year, U.S. Attorney Channing D. Phillips announced today.
Wells pled guilty in September 2015, in the Superior Court of the District of Columbia, to two counts of robbery and one count of armed robbery, involving three separate crimes. He was sentenced on Oct. 29, 2015, by the Honorable Yvonne Williams. Upon completion of his prison term, he will be subject to five years of supervised release.
According to the government’s evidence, in two separate incidents, on Feb. 15, 2015 and Feb. 24, 2015, Wells placed orders at two different restaurants to lure the delivery drivers to locations in Northeast Washington. Once the drivers arrived, he robbed them at gunpoint. After the first robbery, Wells bragged in a Facebook post that “EatGood we eatin good erynight,” with a picture of the food and cash he had stolen. In the second robbery, Wells thrust the gun into the driver’s mouth, causing significant injuries. The gun used in this robbery was recovered and the muzzle of the gun contained the DNA of the delivery driver and of Wells.
In the third incident, on May 24, 2015, Wells was driving his car in the 1300 block of Monroe Street NE when he chanced upon a college student returning from a day of work. Wells pulled the car up and blocked the student’s path. Two unknown individuals jumped out of the car and demanded the student’s bag with the threat that they had a weapon. The car driven by Wells was located by officers of the Metropolitan Police Department (MPD) within minutes from where the robbery had occurred, and Wells was arrested. An imitation firearm was recovered from the car driven by Wells, along with the proceeds of the robbery.
In announcing the sentence, U.S. Attorney Phillips praised the work of those who investigated the case from the Metropolitan Police Department. He acknowledged the work of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialist Donville Drummond and Victim/Witness Coordinator Jennifer Clark. Finally, he thanked Assistant U.S. Attorneys Jennifer Kerkhoff, Nebiyu Feleke and Laura Crane, who investigated and indicted the case.
District Man Pleads Guilty to Voluntary Manslaughter for Shooting Man Following Argument About Victim's DogRead the Press Release
WASHINGTON – Rickey Jones, also known as Heritage Rickey Jones, 22, of Washington, D.C., pled guilty today to charges stemming from the shooting death of a man last year in Southeast Washington, U.S. Attorney Channing D. Phillips announced.
Jones pled guilty in the Superior Court of the District of Columbia to charges of voluntary manslaughter and carrying a pistol without a license. He is to be sentenced on Jan. 22, 2016, by the Honorable Robert E. Morin. The plea, which is contingent on the Court’s approval, calls for a sentence of ten years in prison.
According to the government’s evidence, on Sunday, Nov. 30, 2014, Jones and the victim, Kirk Perry, 50, got into verbal arguments in the 2400 block of Elvans Road SE over Mr. Perry’s dog. During those arguments, Jones said, “I got a 4-5 with an extended clip for your dog.” Mr. Perry and a family member left the area and went to a nearby laundromat.
About three hours after the argument, Mr. Perry returned to his apartment complex. While bringing laundry into the apartment, he again saw Jones outside. After a mutual associate approached Mr. Perry and suggested that he speak with Jones, Mr. Perry returned outside in hopes of settling their dispute. At approximately 12:35 a.m., on Dec. 1, 2014, Mr. Perry had a conversation with Jones that occurred in between two parked cars in a parking lot of the apartment complex on Elvans Road where they both resided. At the time of that conversation, Mr. Perry had a firearm tucked into his waistband.
Jones, armed with a pistol, fired at Mr. Perry and Mr. Perry was struck multiple times. When Mr. Perry fell to the ground face down, Jones continued firing his weapon. Mr. Perry suffered 13 gunshot wounds, including two in his back. When medical and law enforcement personnel arrived, they transported Mr. Perry to a nearby medical facility where Mr. Perry was pronounced dead.
In announcing the guilty plea, U.S. Attorney Phillips commended the work of the detectives of the Criminal Investigations Division Homicide Branch, crime scene officers, and the Seventh Police District of the Metropolitan Police Department. He also expressed appreciation for the work of the D.C. Department of Fire and Emergency Medical Services and the D.C. Office of the Chief Medical Examiner. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Jennifer Clark; Victim/Witness Security Specialist Tanya Via; Paralegal Specialists Zekiah Wright and Debra Joyner; Investigative Analyst Zachary McMenamin, and Assistant U.S. Attorney Natalia Medina. Finally, he praised the work of Assistant U.S. Attorney Robert Eckert, who investigated and prosecuted the case.
Defendant Convicted of Three Counts of Murder in Indian CountryRead the Press Release
Today, a man was convicted of three counts of murder in Indian country after a week-long jury trial, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Mark F. Green of the Eastern District of Oklahoma.
David Brian Magnan, 53, was convicted in the shooting deaths of three victims, James Howard, Karen Wolf and Lucilla McGirt, who were all members of the Seminole Nation. U.S. District Court Judge Ronald A. White of the Eastern District of Oklahoma presided over the trial.
The evidence presented at trial established that the victims were celebrating a birthday on the evening of March 1, 2004, at Howard’s home. In the early morning hours of March 2, 2004, Magnan arrived at the home with two other men. Armed with a pistol, Magnan confronted an individual outside of the house and a fight ensued, after which Magnan shot the individual in the abdomen. Magnan then entered the home where he found the three victims asleep. He first confronted Howard, who he shot multiple times in the chest as he lay in bed. Magnan then moved to a bedroom where he found McGirt and Wolf sleeping. Magnan shot Wolf in the head and shot McGirt in the shoulder and head. McGirt survived that evening and identified Magnan as the shooter, but she ultimately succumbed to her wounds and died two weeks later. Following the shootings, Magnan and the two other men fled the scene and hid the murder weapon, which police subsequently recovered.
This case was investigated by the Oklahoma State Bureau of Investigation, the Seminole County Sheriff’s Office, the Seminole Nation Lighthorse Police and the FBI. The case is being prosecuted by Trial Attorney Mike Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Edward Snow of the Eastern District of Oklahoma. Trial Attorney Richard Friedman of the Criminal Division’s Appellate Section handled an interlocutory appeal.
Dayton Couple Charged in Alleged $70 Million Ponzi SchemeRead the Press Release
DAYTON – A federal grand jury has charged William M. Apostelos, 54, and Connie M. Apostelos, 50, both formerly of Springboro, Ohio, with charges related to fraudulently inducing hundreds of individuals from around the country to invest $70 million collectively.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) and Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service, James Vanderberg, U.S. Department of Labor Office of Inspector General, the U.S. Department of Labor Employee Benefits Security Administration and Brian Peters, Enforcement Attorney, Ohio Department of Commerce Division of Securities, announced the indictment returned October 29 and unsealed today.
The indictment alleges that beginning in 2009, The indictment alleges that beginning in 2009, and continuing for at least five years, the couple and others orchestrated a Ponzi scheme in the Dayton area in which nearly 480 investors lost more than $30 million collectively. William Apostelos operated and oversaw multiple purported investment and asset management companies in the Dayton area, including WMA Enterprises, LLC, Midwest Green Resources, LLC and Roan Capital. He allegedly falsely reported that he held a degree in mathematics and was a registered securities broker.
Connie Apostelos, also known as Connie Coleman, also operated and oversaw multiple companies in the Dayton area, including Coleman Capital, Inc. and Silver Bridle Racing, LLC. These companies were allegedly operated through improper use of investor funds to William Apostelos’ companies.
The couple recruited investors from 37 states to invest in WMA and Midwest Green, telling the investors that their money would be used for acquiring stocks or securities, purchasing real estate or land, providing loans to business and buying gold and silver.
When the defendants became late on interest payments to the victims, it is alleged that they advised that their bank account had been hacked, a bank mistakenly failed to wire payment and/or the deal the victim had invested in was temporarily on hold.
A number of investors have initiated legal action against the couple.
William and Connie Apostelos are charged with one count of conspiracy to commit mail and wire fraud, eight counts of mail fraud and 13 counts of wire fraud, each crimes punishable by up to 20 years in prison. They were also charged with two counts of money laundering, which each carry a potential 10-year prison sentence. They were also charged with one count of theft or embezzlement from employee benefit plan, which carries a maximum penalty of up to five years imprisonment. Finally, Connie Apostelos is charged separately with one count of making a false statement, which carries a maximum penalty of up to five years imprisonment.
U.S. Attorney Stewart commended the investigation of this case by law enforcement, and Assistant United States Attorneys Brent G. Tabacchi and Alex R. Sistla, who are prosecuting the case.
The couple is scheduled to appear before U.S. Magistrate Judge Michael J. Newman at 1:30pm today.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Chesapeake Man Sentenced to 30 Years for Role in Heroin Overdose DeathRead the Press Release
NEWPORT NEWS, Va. – Ronnie A. Brickhouse, 36, of Chesapeake, was sentenced today to 360 months in prison for his role in a conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin, and, for his distribution of heroin which resulted in the death of Robert Joseph Mills in February 2013.
Brickhouse, who pleaded guilty on Feb. 19, 2015, was also ordered to pay $2 million in restitution and $5,000 in funeral expenses. According to court documents, from approximately June 2010 until October 2014, Brickhouse was the leader of a large scale heroin conspiracy that supplied major drug traffickers with multiple kilogram quantities of heroin in the Eastern District of Virginia. On Feb. 1, 2013, Brickhouse provided heroin to a conspirator who then provided it to Mills. Mills injected the heroin at his parent’s house in York County and was found dead shortly thereafter.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Gregory J. Cherundolo, Assistant Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Richmond Field Division; and Richard W. Meyers, Chief of Newport News Police, made the announcement after sentencing by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorneys Robert E. Bradenham, II, and Kevin Hudson, and Trial Attorney Jennifer Sykes of the Criminal Division’s Organized Crime and Gang Section prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:14cr60.
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Carroll County Man Charged with Carjacking and Attempted Bank RobberyRead the Press Release
Baltimore, Maryland – Franklin Albert Johnson, age 41, of, Westminster, Maryland, has been charged with attempted bank robbery and carjacking, in connection with the July 23, 2015, attempted robbery of a bank in Mt. Airy, Maryland, in which the alleged carjacking victim was forced to wear and carry purported explosive devices. The criminal complaint was filed on October 27, 2015 and unsealed on October 29, 2015 at Johnson’s initial appearance. Johnson remains detained.
The criminal complaint was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; and Chief Gary Gardner of the Howard County Police Department.
According to the affidavit filed in support of the criminal complaint, on July 23, 2015, a man entered the bank while talking on a cell phone and carrying a briefcase. He approached a bank employee and handed the employee the cell phone. He also opened the briefcase and displayed what appeared to be a homemade explosive device. The bank employee immediately ordered the evacuation of the bank. The suspected robber remained in the bank briefly, and was seen on bank surveillance video using a pair of scissors to remove a second apparent explosive that was attached to his person with duct tape. After the man removed the device from his body, he left the bank, but stayed at the scene and surrendered to police when they arrived.
The man told law enforcement that he had been operating as a “hack” (unlicensed taxi) near Lexington Market, in Baltimore City, and had picked up an unknown male customer (“UM”), subsequently identified as Johnson, who later forced him at gunpoint to wear what he believed was an explosive device, and to carry a second purported explosive device into the bank in the briefcase. Johnson allegedly told the victim that he was going to rob a bank for him and that if he did as directed he would not be harmed. Johnson dropped the victim off at the bank, and directed him to hand the cell phone to a bank employee. The victim entered the bank and gave the phone to a bank employee, who spoke with Johnson, who was already on the line. Upon exiting the bank, the victim saw that Johnson was no longer parked in the parking lot, but was afraid he would return, so he walked across the street from the bank and waited for the arrival of the police, to whom he surrendered. The victim’s vehicle, a Gold Hyundai Elantra, was recovered a short time later, parked near the Woodbine Inn. The two purported explosive devices were recovered and found to be inert. An examination by the FBI Crime Lab found that the devices were carefully designed and constructed to look like actual explosive devices.
Johnson faces a maximum sentence of 20 years in prison for attempted bank robbery and a maximum of 20 years in prison for carjacking.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended FBI and Howard County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney John F. Purcell, who is prosecuting the case.
California Man Sentenced to Federal Prison for Cocaine Trafficking Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Gilbert Rosales, 43, of Dinuba, Calif., was sentenced yesterday in federal court in Albuquerque, N.M., to 60 months in prison followed by four years of supervised release for his cocaine trafficking conviction.
Rosales and his co-defendant Oscar Casillas-Nunez, were arrested in Oct. 2013, on a criminal complaint charging them with conspiracy to distribute cocaine after DEA agents found approximately 4.6 kilograms of cocaine in their baggage during an interdiction investigation at the Amtrak Train Station in Albuquerque on Oct. 16, 2013. Both men were indicted Oct. 30, 2013, and charged with conspiracy to distribute cocaine and possession of cocaine with intent to distribute in Bernalillo County, N.M.
On March 27, 2015, Rosales pled guilty to the indictment and admitted that on Oct. 16, 2013, he and Casillas-Nunez transported cocaine while traveling through Albuquerque on the Amtrak Train. Rosales further admitted that when the pair arrived in Albuquerque, he left the train to avoid police, and when police questioned Casillas-Nunez he abandoned the bag the cocaine was in and did not return to the train.
Casillas-Nunez has entered a plea of not guilty to the complaint and indictment and is currently scheduled for trial in Nov. 2015. Charges in criminal complaints and indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Interdiction Unit of the DEA’s Albuquerque office which focuses on disrupting the flow of narcotics, weapons, and the proceeds of illegal activities as they are smuggled into or through New Mexico in passenger buses, passenger trains, commercial vehicles and automobiles. Assistant U.S. Attorney Paul Mysliwiec is prosecuting the case.
Bridgeport Man Sentenced to 10 Years in Federal Prison for Selling Stolen FirearmsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MICHAEL MURPHY, 27, of Bridgeport, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 120 months of imprisonment, followed by three years of supervised release, for selling numerous firearms that had been stolen from the Smith & Wesson manufacturing plant in Springfield, Mass.
According to court documents and statements made in court, on November 8, 2012, Elliot Perez, a truck driver for Pace Motor Lines, picked up five boxes of firearms from the Smith & Wesson manufacturing plant in Springfield and placed the boxes in his truck. At the same time, Perez stole three additional boxes containing a total of 111 firearms. He then drove the truck containing all the firearms to his residence in Bridgeport where he met MURPHY. Shortly thereafter, Perez delivered the original five boxes of firearms to the trucking company’s distribution center in Stratford.
Perez and MURPHY stored and ultimately sold many of the stolen guns. More than 50 of the stolen firearms have not been recovered by law enforcement.
Perez and MURPHY were originally arrested by the Stratford Police Department on state firearms charges. MURPHY has been in custody since his federal arrest on November 30, 2012.
On December 12, 2013, MURPHY pleaded guilty to one count of conspiracy to possess and sell stolen firearms, and one count of possession of firearms by a convicted felon.
Perez has been in custody since his state arrest on November 23, 2012. On February 11, 2014, he pleaded guilty to one count of conspiracy to possess and sell stolen firearms, one count of possession of firearms by a convicted felon, and one count of making a false statement to a federal law enforcement officer. On October 27, 2015, he was sentenced to 210 months of imprisonment.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Stratford Police Department and the Bridgeport Police Department. The case was prosecuted by Assistant U.S. Attorney Rahul Kale.
Asset Forfeiture Training Hosted by the U.S. Attorney’s Office for the Districts of Guam and the NMIRead the Press Release
U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands, announced that the U.S. Attorney’s Office hosted an Asset Forfeiture training conducted by Scott Gilbert, Assistant U.S. Attorney of the Southern District of Mississippi, and James Curt Bohling, Assistant U.S. Attorney of the Western District of Missouri. The training was held at the U.S. Attorney’s Office in Guam on August 26 and 27, 2015, with a live feed to the Northern Mariana Islands via video teleconference, and was made available to federal and local law enforcement officers and the prosecution team of the U.S. Attorney’s Office. Approximately 75 participants attended the training.
The training topics included Forfeiture 101, Financial Investigation and Tracing of Assets, Anticipating Defenses, Forfeiting Real Property, Adoption and Structuring Orders, Equitable Sharing, Building a Federal Case from a Money Seizure, and Ethics.
From left to right: U.S. Attorney’s Office Staff from Guam and the
Northern Mariana Islands with instructors Scott Gilbert and James
Bohling, and attendees from DEA and ATF.
Allentown Man Pleads Guilty in Sex Trafficking CaseRead the Press Release
PHILADELPHIA - Corderro Cody, 28, of Allentown, PA, pleaded guilty today to charges related to his running of a sex trafficking operation. Cody pleaded guilty to conspiracy to commit sex trafficking by force, fraud or coercion, 12 counts of sex trafficking, conspiracy to transport individuals across state lines for the purpose of prostitution, and one count of sex trafficking of a minor.
Cody recruited women to work as prostitutes, referred to his prostitution business as the “program,” and advertised the women on Backpage.com. The women were sometimes driven to other states and forced to perform sexual acts. Cody recovered and kept most, if not all, of the money generated by the sexual acts, and used physical force in the form of beatings when the women did not adhere to the “program,” and to maintain the women performing commercial sexual acts.
United States District Court Judge Edward G. Smith scheduled a sentencing hearing for January 29, 2016. Cody faces a mandatory minimum prison term of 15 years up to a maximum of life, a fine of up to $3.75 million, a mandatory minimum of five years of supervised release up to lifetime supervised release, and a $1,500 special assessment.
The case was investigated by Homeland Security Investigations and the Allentown Police Department. It is being prosecuted by Assistant United States Attorney Sherri A. Stephan, and Trial Attorney Anita Channapati of the Civil Rights Division of the Department of Justice.
Agueda Johnston Middle School Invites U.S. Attorney to Youth and Parent SymposiumRead the Press Release
ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak on “Enhancing Community Bonds” at Agueda Johnston Middle School’s Youth and Parent “Change for the Better” Symposium, held on February 28, 2015.
U.S. Attorney Limtiaco introduced the audience to the Department of Justice’s Smart on Crime Initiative, which focuses on crime prevention, strengthening protections for vulnerable populations, and reentry of criminal offenders into the community. The U.S. Attorney spoke with students, parents/guardians, family members, school teachers, and administrators about the importance of building community relationships, as well as the value of collaboration, diversity, and cultural competency, in our efforts to foster greater understanding, appreciation and trust among the various ethnic and multicultural groups on Guam.
U.S. Attorney Limtiaco addressing the audience at Agueda
Johnston Middle School.
Picture of the students and parents attending the Symposium
Group photo of the organizers and presenters at the SymposiumAcoma Pueblo Man Sentenced for Federal Misdemeanor Assault ChargeRead the Press Release
ALBUQUERQUE – Kevin Bernard Joe, 41, a member and resident of Acoma Pueblo, N.M., was sentenced yesterday in Santa Fe, N.M., to 11 months in prison followed by one year of supervised release for his misdemeanor conviction of assaulting an Indian woman.
Joe was arrested on April 27, 2015, on a criminal complaint charging him with an assault charge. According to the complaint, on March 23, 2015, the Acoma Pueblo Tribal Police Department was notified by the victim of an assault occurring on Acoma Pueblo in Cibola County, N.M. The complaint alleged that Joe assaulted the victim, an Acoma woman, by punching her and causing the victim to sustain injuries, including a laceration above her left eye. Joe was subsequently indicted on May 12, 2015, and charged with assault of an intimate partner resulting in substantial bodily injury.
On June 29, 2015, Joe entered a guilty plea to a misdemeanor information and admitted assaulting the victim by punching her with a closed fist. He also acknowledged that his assault caused the victim to suffer a laceration to the left eye that required medical attention.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Pueblo Tribal Police Department. Assistant U.S. Attorney Raquel Ruiz-Velez prosecuted the case.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
29 Defendants Arrested for Human Trafficking Offenses Following Undercover InvestigationRead the Press Release
Federal authorities arrested 29 people in 13 cities across eight states Thursday on sex trafficking and related charges in a sweeping operation dubbed “Operation Safe Haven” announced United States Attorney, Middle District of Georgia Michael J. Moore.
The operation, led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), began in Moultrie, Georgia and identified a loosely affiliated organization that coordinates the movement of Hispanic females throughout the southeastern United States. The traffickers within this organization work as independent operators and coordinate the movement and delivery of women for sexual purposes.
According to a five-count indictment filed in the U.S. District Court for the Middle District of Georgia, at least one of the victims identified during the investigation was a minor when she was trafficked. Law enforcement officers rescued 15 potential victims of fraud, force or coercion, in the brothels and residences searched yesterday.
“Human sex trafficking is a cancer that we must cut out, and then aggressively fight with all of our resources. Sometimes the trafficking victims are kidnapped and forced into sexual servitude through violence. Other times the victims are lured with the promise of a better life, and then held hostage by predators who literally financially imprison them or intimidate them with threats of harm or shame to them or their families. No matter the circumstances that brought these women into sexual servitude, they are victims. And whether the weapons used by the traffickers cause physical, mental or emotional harm, they are predators, and we will track them down no matter the cost. This investigation has been an example of the outstanding cooperation between federal and state agencies. I applaud their efforts. I also want to thank my colleagues, US Attorneys George Beck, Joyce Vance and Chris Canova for their partnership and assistance,” said U.S. Attorney Michael Moore.
The indictment charges six people with conspiracy to participate in the sex trafficking of a minor. 38 people are charged with conspiracy to transport a person in interstate commerce for prostitution – nine suspects remain at large after 29 were arrested Thursday. Three of the network’s customers have been charged with promoting the prostitution.
Individuals charged with conspiracy to engage in sex trafficking of a minor face up to life imprisonment and a $250,000 fine. Individuals charged with conspiracy to transport a person in interstate commerce for purposes of prostitution and individuals charged with promoting prostitution face imprisonment up to five years and a $250,000 fine. All defendants are presumed innocent until proven guilty.
The female victims’ identities are being protected while HSI ensures they receive emergency medical assistance, food and shelter. HSI provides relief to victims of human trafficking by allowing for their continued presence in the United States during criminal proceedings. Victims may also qualify for a T visa, which is issued to victims of human trafficking who have complied with reasonable requests for assistance in investigations and prosecutions.
“As previous investigations have shown, and “Operation Safe Haven” yet again confirms, the sex trafficking of foreign women in the United States is done by loosely organized criminal networks who have little, if any regard for the women they victimize,” said Special Agent in Charge Nick S. Annan, ICE Homeland Security Investigations in Atlanta. “This investigation identified women victimized through fraud, force and coercion, including underage teens. To the criminals behind these illegal enterprises, these women are just pieces of meat used to pull a quick profit and then discarded or passed on to the next trafficker down the line.”
“Operation Safe Haven” is the first major investigation supported by the Joint Task Force for Investigations (JTF-I) since it became fully operational in July 2015. JTF-I first identified this operation as a priority investigation in January. The task force directed significant funding, intelligence, and analytical support to bolster the special agents investigating this criminal network from the HSI Savannah office.
"This operation highlights exactly what the Secretary charted us to do through these task forces,” said Dave Marwell, Director of DHS Joint Task Force – Investigations. “By strategically applying the broad resources of DHS against a priority investigation, criminal organizations don't stand a chance. We will continue to focus our efforts to ensure we are dismantling criminal organizations that traffic women into the US for the purposes of sexual slavery."
U.S. Customs and Border Protection’s (CBP) Air and Marine Operations (AMO) became involved with Operation Safe Haven in July 2014. AMO’s Jacksonville Air and Marine Branch flew more than 115 flight hours and launched 38 separate missions in furtherance of this dynamic investigation, using covert aerial surveillance to track suspects and identify multiple target locations. AMO’s presence greatly increased the situational awareness of agents on the ground. Multiple air assets and crews were committed to this investigation, including crews from AMO’s Miami, New Orleans and Houston locations.
“Collaboration is crucial in a mission of this caliber,” said Director Daniel Meagher, Air Operations at the Jacksonville Air and Marine Branch. “I am proud to say that our unique capabilities contributed to both the success of this mission and to the safety of all those involved.”
Operation Safe Haven was led by HSI-Savannah with assistance from Savannah Chatham Metropolitan P.D, Savannah State University P.D., Chatham Narcotics Team, Colquitt County SO, Pierce County SO, CBP AMO, ICE Enforcement and Removal Operations, Coast Guard Investigative Service and Gwinnett County District Attorney's Office.
Anyone who suspects instances of human trafficking is encouraged to call the HSI tip line at 1-866-DHS-2-ICE (866-347-2423) or the Human Trafficking Hotline at 1-888-373-7888. Online tips can be submitted at www.ice.gov/tipline. Anonymous calls and tips are welcome.
DEFENDANTS
HOME TOWN
AGE
(1) Jose Roberto Laines a/k/a “El Viejon”
Moultrie, GA
59
(2) Galdino Benitez
Moultrie, GA
57
(3) Carmen Michelle Pecina
Moultrie, GA
42
(4) Yamileth Hernandez a/k/a “Yamileth Portillo” and “Gabby”
(5) Maria Mercado a/k/a “Marisol”
Duluth, GA
51
(6)Heriberta Caraballo a/k/a “Cristina” and “La Columbiana”
Louisiana
55
(7) Juan Ortiz Bojorquez
Louisiana
39
(8) Juan Jose Sotelo a/k/a “Don Jose”
Prairieville, LA
(9) Antonio Flores Esparza a/k/a “Tonio”
Pensacola, FL
34
(10) Jose Trujillo a/k/a “El Gordo”
Houston, TX
53
(11) Germania Guzman a/k/a “Deborah”
Houston, TX
56
(12)Flor Torres
Columbia, SC
34
(13) Uvaldo Barrioz Perez
Moultrie, GA
37
(14) John McLeod
Moultrie, GA
33
(15) Juan Gomez
Hartsfield, GA
52
(16) Evelyn Patricia Yanes, a/k/a “Patty”
Houston, TX
42
(17) Arnold Campbell
Houston, TX
29
(18) Leti LNU
Atlanta, GA
(19) Alejandro Monterrey
Norcross, GA
53
(20) Carlos Perez a/k/a “Chema”
Atlanta, GA
(21) Bernabe Carbajal, a/k/a “El Chaparro”
Montgomery, AL
36
(22) Gloria Isabel Reyes, a/k/a ”Estela Reyes,” Gloria Dominguez”, “Dona Gloria”
Forest, MS
60
(23) Milton Ivan Dominguez
Forest, MS
43
(24) Luis Roberto Dominguez
Mississippi
41
(25) Amada Garcia a/k/a “Marlene”
Taylor, SC
46
(26) Jaime Ramirez Villeda
Winston-Salem, NC
34
(27) Ernesto Trejos Villeda
Winston-Salem, NC
32
(28) Alba Blandon a/k/a “Dona Alba”
Sunset, LA
55
(29) Mauro Lira a/k/a “Chino”
Hattiesburg, MS
24
"Spice" Conspirator Sentenced in Federal CourtRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Irvin Louis Kendrick, 51, of Prichard, Alabama, was sentenced in federal court today for his role in a conspiracy to distribute synthetic marijuana, or "spice," and a conspiracy to launder drug money. Kendrick pled guilty to the charges in April of 2015.
United States District Court Judge Callie V. S. Granade imposed a sentence of 64 months in Kendrick’s cases, and ordered that the sentences run concurrently with each other. She ordered that when he is released from his prison sentence, Kendrick will serve three years of supervised release on each case, to run concurrently. The judge imposed $200 in mandatory special assessments, but did not order a fine. As a condition of his supervision, the judge ordered that Kendrick will be monitored for drug and alcohol abuse.
The case was investigated by the Mobile County Sheriff’s Office and the Department of Homeland Security Investigations. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorney Gloria Bedwell.
Thursday 29 October 2015
Warner Chilcott Agrees to Plead Guilty to Health Care Fraud Scheme and Pay $125 MillionRead the Press Release
BOSTON – Pharmaceutical company Warner Chilcott has agreed to plead guilty to health care fraud and pay $125 million to resolve criminal and civil liability arising from the illegal promotion of the drugs Actonel®, Asacol®, Atelvia®, Doryx®, Enablex®, Estrace®, and Loestrin®, and various formulations of these drugs.
In a related development, former Warner Chilcott President W. Carl Reichel was arrested this morning in Boston for conspiring to pay kickbacks to physicians. Reichel will make an initial appearance in U.S. District Court in Boston today at 2:30 p.m.
In addition, in recent weeks, three former Warner Chilcott district managers pleaded guilty or agreed to plead guilty to conspiracy to commit health care fraud and criminal HIPAA violations, and a Springfield, Mass. physician was indicted for taking kickbacks, criminal HIPAA violations and obstruction of justice.
“Doctors’ medical judgment should be based on what is best for the patient, and not clouded by expensive meals and other pharmaceutical company kickbacks,” said United States Attorney Carmen M. Ortiz. “Pharmaceutical company executives and employees should not be involved with treatment decisions or submissions to a patient’s insurance company. Today’s enforcement actions demonstrate that the government will seek not only to hold companies accountable, but will identify and charge corporate officials responsible for the fraud.”
“The Justice Department is committed to protecting the integrity of physician prescribing decisions and ensuring that financial arrangements in the healthcare marketplace comply with the law,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department will continue to hold companies and responsible individuals accountable when they use improper incentives, like those alleged here, to promote their products.”
“Pharmaceutical companies and their employees have a significant responsibility to sell and market drugs in an ethical and legal manner,” said Special Agent in Charge Harold H. Shaw of the FBI’s Boston Field Office. “This settlement and the related indictments reflect the commitment of the FBI and our government partners to aggressively investigate companies and individuals who fail that responsibility and seek to profit from fraudulent activities.”
“Placing financial gain above the legitimate needs of patients is deplorable,” said Inspector General Daniel R. Levinson of the U.S. Department of Health and Human Services. “Paying kickbacks and even providing instructions on how to defraud Medicare are practices that will not be tolerated.”
“These types of health care fraud investigations have great impact on VA operations because the settlement will return funds to VA for the continued care of our nation’s Veterans,” said Jeffrey G. Hughes, Special Agent in Charge, Department of Veterans Affairs, Office of Inspector General. “The VA OIG will continue to work with its law enforcement partners and the Boston U.S. Attorney’s Office to combat fraud in the health care arena.”
The Warner Chilcott Resolution
In a criminal Information filed today in U.S. District Court in Boston, the government charged that, between 2009 and 2013, Warner Chilcott employees, at the direction of members of the company’s management team, paid remuneration to physicians in order to induce those physicians to prescribe Warner Chilcott drugs. The Information alleges that Warner Chilcott employees provided payments, meals, and other remuneration associated with so-called “Medical Education Events.” These events, which were often held at expensive restaurants, frequently contained minimal or no educational component, and were instead used to pay prescribing physicians in an attempt to gain a competitive advantage over other pharmaceutical companies.
The Information also alleges that, from 2011 to 2013, Warner Chilcott employees submitted false, inaccurate, or misleading prior authorization requests to federal health care programs for the osteoporosis medications Atelvia® and Actonel®. A prior authorization request contains protected health information, including biographical data and information concerning a patient’s medical condition. The fraudulent requests were provided to certain insurance companies in order to overcome restrictions that favored less expensive osteoporosis drugs. In some instances, Warner Chilcott sales representatives submitted these prior authorizations directly to insurance companies, holding themselves out to be physicians.
In addition, the Information alleges that Warner Chilcott employees were instructed by members of the company’s management team to make unsubstantiated superiority claims when marketing the drug Actonel® even though the claim was not supported by clinical evidence. The management team instructed the sales representatives to tell physicians that Actonel® was superior to other bisphosphonates due to its supposedly unique “mechanism of action.”
Under the terms of the criminal plea agreement, Warner Chilcott will pay a fine of $22,940,000. Warner Chilcott also entered into a civil settlement agreement under which it agreed to pay $102,060,000 to the federal government and the states to resolve false claims it submitted to government health care programs. The federal share of the civil settlement is approximately $91.5 million, and the state Medicaid share of the civil settlement is approximately $10.6 million. The civil settlement was brought under the whistleblower provisions of the False Claims Act and the whistleblowers will receive approximately $22.9 million from the federal share of the civil recovery.
The civil case was investigated by the FDA’s Office of Chief Counsel, HHS Office of Counsel to the Inspector General, and the National Association of Medicaid Fraud Control Units. The civil settlement was handled by Assistant U.S. Attorneys Sonya Rao and Susan Poswistilo of Ortiz’s Civil Division and Trial Counsel Colin Huntley of the Commercial Litigation Branch of the Justice Department’s Civil Division.
The criminal case was investigated by the FBI, HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, the Department of Veterans Affairs and the Office of Personnel Management’s Office of Inspector General. The criminal case of the company was handled by Assistant U.S. Attorneys David Schumacher and Miranda Hooker of Ortiz’s Health Care Fraud Unit and AUSAs Rao and Poswistilo. The criminal cases of individuals are being prosecuted by AUSAs Schumacher and Hooker of Ortiz’s Health Care Fraud Unit.
Carl Reichel Indictment
The former President of Warner Chilcott, W. Carl Reichel, 57, of Chester, N.J., was indicted on one count of conspiracy to pay kickbacks. Reichel was arrested today in Boston and will make an appearance before U.S. District Court Chief Magistrate Judge Jennifer Boal at 2:30 p.m.
The indictment alleges that, between 2009 and 2012, Reichel, designed a sales and marketing strategy to provide physicians payment and other benefits, including free dinners and bogus “speaker” fees, in return for prescriptions of Warner Chilcott drugs. Reichel provided the sales force with virtually unlimited expense accounts to wine and dine physicians and other health care practitioners. These so-called “medical education programs,” in fact, contained little, if any, medical education, and a primary purpose of the program was to obtain prescriptions from the physicians.
Reichel also allegedly designed the strategy of signing up physicians who prescribed a high volume of their drugs as paid “speakers” for Warner Chilcott. According to the indictment, the “speakers” often did not speak at all, and instead enjoyed an expensive dinner with a sales representative. Reichel instructed the sales force that they should only continue to use the “speakers” if they were prescribing Warner Chilcott drugs at a high level, and that they should communicate to the “speaker” that he or she would not be used – paid – at subsequent events until their Warner Chilcott prescriptions increased.
The charging statute provides a sentence of no greater than five years in prison, three years 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.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The District Manager Pleas
1. Timothy Garcia
Timothy Garcia, 35, of Los Gatos, Calif., pleaded guilty on Oct. 16, 2015, to one count of conspiracy to commit health care fraud. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for April 14, 2016.
From 2008 to 2011, Garcia worked for Warner Chilcott and served as a district manager in the company’s osteoporosis division in 2011, managing approximately 12 sales representatives in the San Francisco Bay area. The same year, Warner Chilcott launched Atelvia®, an osteoporosis drug, which many insurance companies around the country did not cover primarily because a generic alternative was available. Many of these insurance companies would only pay for Atelvia® if a physician submitted a prior authorization but were often hesitant to do so. Recognizing this, Garcia aggressively pushed his sales representatives to manipulate Atelvia® prior authorizations. Garcia instructed his sales representatives that, if the physicians or staff were unwilling to prepare Atelvia® prior authorizations, the sales representatives should fill them out themselves. Futhermore, Garcia stressed the importance of concealing the misconduct of his sales representatives.
In 2011, Garcia received a bonus of more than $60,000, and was promoted to senior district manager in Warner Chilcott’s most prestigious sales division. As a result of the scheme, insurance companies, including Medicare, paid Warner Chilcott at least $100,000 for Atelvia® based on prior authorizations that were manipulated by Garcia’s sales representatives.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss resulting from the offense, and exclusion from the Medicare program. 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.
2. Landon Eckles
Landon Eckles, 30, of Huntersville, N.C., was charged in an Information on Oct. 16, 2015, with one count of wrongful disclosure of protected health information, in violation of the criminal provisions of the Health Insurance Portability and Accountability Act (HIPAA). A plea hearing is scheduled for Nov. 12, 2015, before U.S. District Court Judge George A. O’Toole, Jr.
According to the Information, from 2007 to 2012, Eckles worked for Warner Chilcott and served as a district manager in the company’s osteoporosis division in a mid-Atlantic district. Atelvia® had poor insurance coverage in Eckles’s district when it was launched in 2011, and many insurance companies required a prior authorization before covering Atelvia®. Eckles allegedly directed certain sales representatives that, if physicians refused to fill out Atelvia® prior authorizations, the sales representatives should fill them out themselves. By doing so, Eckles and his sales representatives accessed patients’ protected health information.
In addition, following directions from his supervisors, Eckles allegedly encouraged his sales representatives to ensure that patient medical charts in physicians’ offices were “flagged” with Atelvia® brochures, so that physicians would be reminded to prescribe Atelvia® for the patients. According to the Information, Eckles and a sales representative accessed a number of patients’ medical charts and placed Atelvia® brochures in the charts in a Philadelphia physician’s office. Eckles bragged about this tactic, stating, “I guarantee you that this is going to drive business,” and encouraged his sales representatives to follow suit. In part, as a result of his scheme, Eckles received a bonus of approximately $60,000 in 2011.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000, forfeiture, and exclusion from the Medicare program. 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.
3. Jeff Podolsky
Jeff Podolsky, 49, of East Meadow, N.Y., pleaded guilty on July 7, 2015, to one count of conspiracy to commit health care fraud. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for April 8, 2016.
From 2009 to 2013, Podolsky worked for Warner Chilcott. He served as a district manager in New York City and Long Island in 2010 and 2011, during which time Atelvia®, as well as its predecessor drug, Actonel®, had poor insurance coverage. Podolsky directed the sales representatives in his district to fill out prior authorizations for physicians who prescribed Actonel® and Atelvia®, using false clinical justifications as to why the patient needed the drugs and submitted them to health insurance companies.
As a result of the scheme, Podolsky’s district was the top-grossing district in Warner Chilcott’s osteoporosis division. In 2011, Podolsky received a bonus of more than $100,000, and was promoted to senior district manager in a more prestigious sales division. Insurance companies and Medicare paid at least $200,000 for Actonel® and Atelvia® prescriptions that were based on prior authorizations that were manipulated by Podolsky’s sales representatives.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss resulting from the offense, forfeiture and exclusion from the Medicare program. 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.
Rita Luthra Indictment
Rita Luthra, M.D., 64, of Longmeadow, Mass., was indicted on Oct. 21, 2015 with one count of accepting kickbacks, one count of wrongful disclosure of protected health information, and one count of obstructing a criminal investigation.
From October 2010 to November 2011, Warner Chilcott paid Luthra $23,500 to prescribe its osteoporosis drugs, Actonel® and Atelvia®. On at least 31 occasions during that period, a Warner Chilcott sales representative brought food into Luthra’s medical office for Luthra and her staff and paid Luthra $750 to talk with her for 25-30 minutes while she ate. It is alleged that Luthra’s prescriptions of Actonel® and Atelvia® increased during the time that she was paid by Warner Chilcott and precipitously declined once she stopped being paid. Luthra also allowed a Warner Chilcott sales representative to access protected health information in her patient’s medical files in order to submit prior authorizations for Atelvia®. Finally, Luthra allegedly lied to federal agents when interviewed about her relationship with Warner Chilcott, and allegedly directed one of her employees to do the same.
The charge of violating the Anti-Kickback Statute provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $25,000, forfeiture and exclusion from the Medicare program. The charge of disclosure of individually identifiable health information provides a sentence of no greater than one year in prison and/or a fine of $50,000, one year of supervised release and exclusion from the Medicare program. The charge of obstructing a criminal health care investigation provides a sentence of no greater than five years in prison, three years 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.