Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Thursday 29 October 2015
Warner Chilcott Agrees to Plead Guilty to Felony Health Care Fraud Scheme and Pay $125 Million to Resolve Criminal Liability and False Claims Act AllegationsRead the Press Release
Former President and Three District Managers Also Face Criminal Charges
Warner Chilcott U.S. Sales LLC, a subsidiary of pharmaceutical manufacturer Warner Chilcott PLC, has agreed to plead guilty to a felony charge of health care fraud, the Justice Department announced today. The plea agreement is part of a global settlement with the United States in which Warner Chilcott has agreed to pay $125 million to resolve its criminal and civil liability arising from the company’s illegal marketing of the drugs Actonel®, Asacol®, Atelvia®, Doryx®, Enablex®, Estrace® and Loestrin®. Prior to today’s guilty plea by Warner Chilcott, several individuals also pleaded guilty or were charged in connection with the company’s illegal activities.
Warner Chilcott agreed to plead guilty in the District of Massachusetts to criminal charges that the company committed a felony violation by paying kickbacks to physicians throughout the United States to induce them to prescribe its drugs, manipulating prior authorizations to induce insurance companies to pay for prescriptions of Atelvia® that the insurers may not have otherwise paid for and making unsubstantiated marketing claims for the drug Actonel®.
Earlier today, an indictment was unsealed in the District of Massachusetts charging former Warner Chilcott President W. Carl Reichel, 57, of Chester, New Jersey, with one count of conspiring to pay kickbacks to physicians. Reichel was arrested today in Boston and will make an initial appearance at 2:30 p.m. before U.S. District Court Magistrate Judge Jennifer C. Boal.
“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.”
“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 U.S. Attorney Carmen M. Ortiz for the District of Massachusetts. “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.”
In a criminal information filed today in the District of Massachusetts, the government charged that, between 2009 and 2013, Warner Chilcott, through its employees acting at the direction of members of the company’s management team, knowingly and willfully paid remuneration to physicians in order to induce those physicians to prescribe Warner Chilcott drugs. Under the law, it is illegal to offer or pay remuneration to physicians to induce them to refer individuals to pharmacies for the dispensing of drugs for which payments are made in whole or in part under a federal health care program. The information alleges that Warner Chilcott employees, at the direction of company management, provided payments, meals and other remuneration associated with so-called “Medical Education Events,” which included dinners, lunches and receptions. These events, which were often held at expensive restaurants, often contained minimal or no educational component and were instead used to pay prescribing physicians in an attempt to gain a “competitive advantage” over other companies. Warner Chilcott also enlisted high-prescribing physicians as “speakers” for the company. In fact, the “speakers” often did not actually speak about any clinical or scientific topics, and, instead, the payments were primarily intended to induce prescriptions. For instance, Warner Chilcott informed “speakers” who were not prescribing at a high volume that they would not be paid for subsequent events unless their prescribing habits increased.
In addition, the information alleges that from 2011 to 2013, Warner Chilcott employees knowingly and willfully submitted false, inaccurate, or misleading prior authorization requests and other coverage requests to federal health care programs for the osteoporosis medications Atelvia® and Actonel®. The false, inaccurate and misleading information was provided to certain insurance companies in order to overcome formulary restrictions that favored less expensive osteoporosis drugs. For instance, Warner Chilcott was aware that many insurers only paid for Atelvia® if a physician submitted an individualized request explaining why the patient could not be treated with less-expensive medications approved to treat the same conditions. As detailed in the information, Warner Chilcott sales representatives filled out numerous prior authorizations for Atelvia®, using “canned” medical justifications which often were inconsistent with the patients’ medical conditions. In some instances, according to the information, Warner Chilcott sales representatives submitted these prior authorizations directly to insurance companies, holding themselves out to be physicians. In other cases, sales representatives coached physicians and staff about which medical justifications would result in an approved prior authorization, whether or not the justification was true for a particular patient.
Finally, 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®. 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.” According to the information, Warner Chilcott managers also encouraged sales representatives to use props to visually support this false claim, including pouring water and syrup onto two sponges while telling physicians that Actonel, like water, penetrated and exited the bone more quickly than its competitors, represented by the syrup. Warner Chilcott management directed the sales representatives to make the superiority claim even though the claim was not supported by clinical evidence.
Under the terms of the plea agreement, Warner Chilcott will pay a criminal fine of $22.94 million.
Warner Chilcott also entered into a civil settlement agreement under which it agreed to pay $102.06 million to the federal government and the states to resolve claims arising from its conduct, which allegedly caused false claims to be submitted to government health care programs. The civil settlement resolved allegations that Warner Chilcott violated the federal Ant-Kickback Statute by paying illegal remuneration to prescribing physicians in connection with the so-called “Medical Education Events” and speaker programs and caused the submission of false prior authorization requests for Atelvia® and Actonel®. 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.
Prior to today’s guilty plea by Warner Chilcott and civil settlement, several individuals were either criminally charged or pleaded guilty to various offenses related to the company’s alleged conduct. Two former district managers, Jeffrey Podolsky, 49, of East Meadow, New York, and Timothy Garcia, 35, of Los Gatos, California, previously pleaded guilty to various charges, including conspiracy to commit health care fraud and violations of the Health Insurance Portability and Accountability Act (HIPAA). A third former district manager, Landon Eckles, 30, of Huntersville, North Carolina, was criminally charged earlier this month for alleged HIPAA violations relating to the alleged prior authorization scheme. Last week a Springfield, Massachusetts physician, Rita Luthra, M.D., 64, of Longmeadow, Massachusetts, was charged with, among other things, allegedly accepting free meals and speaker fees from Warner Chilcott in return for prescribing its osteoporosis drugs.
“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 (HHS). “Paying kickbacks and even providing instructions on how to defraud Medicare are practices that will not be tolerated.”
“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.”
The civil settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The civil lawsuit was filed in the District of Massachusetts and is captioned United States ex rel. Alexander, et al. v. Warner Chilcott plc, et al., Civil Action No. 11-CA-1121 (D. Mass.). As part of today’s resolution, the whistleblowers will receive approximately $22.9 million from the federal share of the civil recovery.
The criminal case was prosecuted by the U.S. Attorney’s Office of the District of Massachusetts and the Civil Division’s Consumer Protection Branch. The civil settlement was handled by the U.S. Attorney’s Office of the District of Massachusetts and the Civil Division’s Commercial Litigation Branch. Assistance was provided 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. This matter was investigated by the FBI, HHS Office of the Inspector General, 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.
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.
Except for the conduct admitted in connection with the criminal plea, the claims resolved by the civil agreement are allegations only, and there has been no determination of civil liability.
Waggaman Woman Sentenced After Pleading Guilty to Embezzling $208,000 from Local EmployerRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DELORES TROUILLET, age 59, of Waggaman, was sentenced after previously pleading guilty to wire fraud for embezzling over $200,000 from her employer.
U.S. District Judge Carl J. Barbier sentenced TROUILLET to serve one year and one day in prison, to be followed by three years of supervised release. Additionally, TROUILLET was ordered to pay restitution in the amount of $208,082.03 to the victim.
According to court documents, from 1999 to 2014, TROUILLET was employed by a carpet, flooring, and drapery sales and installation company (“Company A”) headquartered in Gretna, where she served as a bookkeeper. In her capacity as bookkeeper, TROUILLET was responsible for overseeing the company’s finances and accounts. TROUILLET had access to Company A’s bank accounts, including the ability to conduct wire transfers from Company A’s bank accounts.
Using her access to the company’s accounts, TROUILLET stole money from Company A in five different ways, including generating checks drawing on Company A’s bank accounts to pay her personal expenses. To make the payments appear legitimate, TROUILLET listed in Company A’s internal records checks she made out to herself and deposited into her personal bank account as being made payable to entities with whom Company A engaged in business or frequently paid funds, such as “State Farm Insurance” and “IRS.” TROUILLET also paid for her personal daily expenses using Company A’s corporate credit and debit cards. Further, TROUILLET added money to her biweekly payroll in excess of her agreed upon salary. In total, TROUILLET embezzled approximately $208,082.03 from Company A.
U.S. Attorney Polite praised the work of the United States Secret Service and investigators with assistance from the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Jordan Ginsberg was in charge of the prosecution.
Utica Man Pleads Guilty to Three Bank RobberiesRead the Press Release
ALBANY, NEW YORK – Calvin Stephon Moore, age 50, of Utica, pleaded guilty today to three counts of bank robbery, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation.
Moore faces up to 20 years of imprisonment, up to three years of supervised release and a maximum $250,000 fine when he is sentenced by Senior United States District Judge Thomas J. McAvoy on February 10, 2016 in Albany.
Moore committed bank robberies in Schenectady, Utica and Columbia, South Carolina.
On November 17, 2014, Moore and another man robbed a KeyBank branch in Schenectady. During the robbery, Moore stated to a teller, “this is a hold up give me money.” The two robbers fled the bank with $5,035. Schenectady Police found and arrested Moore’s accomplice near the bank; the accomplice had a backpack containing the stolen money and a copy of Moore’s birth certificate.
The following day, Moore robbed an Adirondack Bank branch in Utica. He handed the teller a demand note, which stated: “THIS IS A ROBBERY. I HAVE A GUN AND WILL SHOOT IF YOU TRY ANYTHING. PUT ALL THE LOOSE BILLS (EVERY DENOMINATION) IN THE BAG … NO DYE PACK OR TRACERS OR I WILL SHOOT!” Moore fled the bank with $1,647.
Moore then traveled to South Carolina.
On December 30, 2014, Moore entered a First Citizens Bank branch in Columbia. He approached a teller and presented a note in which he demanded money. He also told the teller he had a gun. Moore fled the bank with $1,271, into which a teller had placed an exploding dye pack.
On the evening of December 30, officers from the Cayce, South Carolina, Police Department responded to a report of a person at a motel tossing a suspicious item over a fence and into a parking lot. The item was a bank dye pack and several $20 bills.
Officers set up a perimeter near the motel and began identifying people in the area. One person they stopped was Moore, who, when his identification was checked, was found to have a federal arrest warrant for bank robberies committed in the Northern District of New York.
Officers determined that Moore was staying at the motel that had called the police, and obtained and executed a search warrant for Moore’s room. Officers recovered about $965 in U.S. currency; the serial numbers on some of this currency matched the serial numbers of some of the currency taken earlier in the day from the First Citizens Bank branch.
The investigation into the Schenectady and Utica robberies was conducted by the Albany Division of the Federal Bureau of Investigation, and the Schenectady and Utica Police Departments.
The investigation into the Columbia, South Carolina robbery was conducted by the Columbia Division of the FBI, and the Columbia and Cayce Police Departments. The case is being prosecuted by Assistant United States Attorney Michael Barnett of the Northern District of New York, and by Assistant United States Attorney Benjamin N. Garner of the District of South Carolina.
Urbandale Man Sentenced to Federal Prison for Bank RobberyRead the Press Release
DES MOINES, IA – On October 29, 2015, Hassam Fayiz Abusharkh, age 36, of Urbandale, Iowa, appeared in federal court before Senior United States District Judge Robert W. Pratt and was sentenced to 80 months in federal prison for bank robbery, announced United States Attorney Nicholas A. Klinefeldt. Abusharkh previously pleaded guilty to the offense, admitting that he robbed the Farmers and Merchants State Bank in St. Charles, Iowa, on March 25, 2015. Abusharkh will be required to serve a five-year period of supervised release after his release from prison and also was ordered to pay restitution.
This case was investigated by the Madison County Sheriff’s Office and the Federal Bureau of Investigation and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Two Illegal Aliens Indicted with Immigration ViolationsRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Sebastian Gonzalez-Delgado, age 27, of Guanajuato, Mexico, and Jose Ramos, age 33, a native and citizen of Guatemala, were indicted separately yesterday by a federal grand jury in Harrisburg on charges of illegally re-entering the United States after having been previously deported.
According to United States Attorney Peter Smith, Gonzalez-Delgado, was indicted on a charge of illegally re-entering the United States on an unknown date in February of 2015. The grand jury charged that Gonzalez-Delgado had previously been deported from the United States at the San Luis, Arizona Port of Departure on July 19, 2013. It is further alleged that Gonzalez-Delgado failed to get permission for re-entry into the United States as required by law.
Prosecution has been assigned to Assistant U.S. Attorney William H. Behe.
The maximum penalty under federal law is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine.
Jose Ramos was indicted on a charge of illegally re-entering the United States. The grand jury charged Ramos was previously convicted of an aggravated felony offense and removed from the United States in 2010.
Prosecution has been assigned to Assistant U.S. Attorney James T. Clancy.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine.
Both matters were investigated by the U.S. Immigration and Customs Enforcement (ICE) Enforcement and Removal Operations (ERO).
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Two Cedar Rapids Brothers Convicted of Drug Trafficking and Witness TamperingRead the Press Release
Two brothers who conspired to distribute methamphetamine were convicted by a jury on October 28, 2015, after a three-day jury trial in federal court in Cedar Rapids.
Martin Lawrence, 52 and Troy Lawrence, 54, both from Cedar Rapids, Iowa, were convicted of conspiracy to distribute ice methamphetamine, distribution of ice methamphetamine, possession with intent to distribute ice methamphetamine, and witness tampering. The verdict was returned following approximately three hours of jury deliberations.
The evidence at trial showed that Martin Lawrence headed a drug trafficking organization responsible for distributing pounds of ice methamphetamine, a highly pure, crystalized form of methamphetamine, in Eastern Iowa. His brother, Troy Lawrence, assisted the organization by distributing ice methamphetamine in the Cedar Rapids area. Investigators learned of the organization after Martin Lawrence’s step-son brought a stuffed animal containing methamphetamine to his elementary school. The evidence at trial also established that Martin Lawrence obtained ice methamphetamine from Omaha and transported it back to the Cedar Rapids area where he relied on a network of individuals who distributed it on his behalf. In addition, after their arrest on federal charges, both defendants instructed government witnesses to avoid contact with law enforcement in order to prevent these witnesses from testifying at trial.
Sentencing before United States District Court Judge Mark W. Bennett will be set after the preparation of the presentence reports. Martin and Troy Lawrence remain in custody of the United States Marshal. Both brothers face a mandatory minimum sentence of ten years’ imprisonment and a possible maximum sentence of life imprisonment, over $10,000,000 in fines, $300 in special assessments, and at least five years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Lisa C. Williams and was investigated by the Cedar Rapids Police Department, Drug Enforcement Administration, Linn County Sheriff’s Office, and the Dubuque Drug Task Force.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-0069.
Follow us on Twitter @USAO_NDIA.
Three Waterbury Men Indicted for Trafficking "Black Tar" HeroinRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration for New England, today announced that on October 28, 2015, a federal grand jury in Bridgeport returned a four-count indictment charging HUGO TEJEDA, 23, IVAN LERMA, also known as “Aurelia Llano” and “Miguel Cardona,” 24, and VLADIMIR RODRIGUEZ-LARA, 35, all of Waterbury, with trafficking “black tar” heroin.
As alleged in court documents, in August 2015, the Drug Enforcement Administration received information that an individual was in possession of approximately 1.5 kilograms of “black tar” heroin from Mexico and was searching for a buyer. The DEA subsequently identified the individual as TEJEDA, and LERMA and RODRIGUEZ-LARA as his associates. On August 10 and August 20, TEJEDA drove LERMA to meetings at which LERMA supplied black tar heroin to confidential informants working for the DEA. On August 13, 2015, TEJEDA drove LERMA to a meeting during which LERMA agreed to sell 1.5 kilograms of heroin to a confidential informant in exchange for $76,000.
On August 27, 2015, TEJEDA, LERMA and RODRIGUEZ-LARA were arrested when they attempted to sell the 1.5 kilograms of heroin to the confidential informants.
The indictment charges TEJEDA, LERMA and RODRIGUEZ-LARA with conspiracy to possess with intent to distribute one kilogram or more of heroin, and possession with intent to distribute, and distribution of, one kilogram or more of heroin, offenses that carry a mandatory minimum term of imprisonment of 10 years and a maximum term of life in prison. The indictment also charges TEJEDA and LERMA with possession with intent to distribute, and distribution of, a mixture and substance containing a detectable amount of heroin, offenses that carry a maximum term of imprisonment of 20 years.
The defendants were originally arrested on federal criminal complaints. LERMA has been detained since his arrest, and TEJEDA and RODRIGUEZ-LARA are each released on a $50,000 bond.
This investigation has been conducted by the Bridgeport High Intensity Drug Trafficking Area Task Force, which includes personnel from the DEA, Connecticut State Police and the Norwalk, Stamford, Stratford and Milford Police Departments. The case is being prosecuted by Assistant U.S. Attorney Amy C. Brown.
Three New Mexicans Charged with Fraudulently Selling Filipino-Made Jewelry as Native American-MadeRead the Press Release
Sixteen Search Warrants Executed in New Mexico and California as Part of Continuing Investigation into Alleged Violations of the Indian Arts and Crafts Act
Three New Mexicans have been charged with violating the Indian Arts and Crafts Act (IACA) by conspiring to import and fraudulently sell Filipino-made jewelry as Native American-made. The indictment charging the three defendants is the result of an ongoing federal investigation led by the U.S. Fish and Wildlife Service into an international scheme to violate the IACA that included a law enforcement operation yesterday during which 16 search warrants were executed in New Mexico and California and related investigative activity took place in the Philippines.
The IACA prohibits the offer or display for sale, or the sale of any good in a manner that falsely suggests that it is Indian produced, an Indian product, or the product of a particular Indian and Indian tribe. The law is designed to prevent products from being marketed as “Indian made,” when the products are not, in fact, made by Indians. It covers all Indian and Indian-style traditional and contemporary arts and crafts produced after 1935 and broadly applies to the marketing of arts and crafts by any person in the United States. IACA provides critical economic benefits for Native American cultural development by recognizing that forgery and fraudulent Indian arts and crafts diminish the livelihood of Native American artists and craftspeople by lowering both market prices and standards.
“American Indian and Alaska Native people have contributed tremendously to the cultural and artistic heritage of our nation and they have an important future that must be protected,” said Acting Associate Attorney General Stuart F. Delery. “This case demonstrates our willingness to prosecute those who falsely market products as ‘Indian Made’ and thus undermine the livelihoods of Native American artists and craftspeople, many of whom are responsible for carrying precious spiritual and artistic knowledge from one generation to another.”
“The indictment announced today and yesterday’s enforcement operation are not only about enforcing the law but also about protecting and preserving the cultural heritage of Native Americans,” said U.S. Attorney Damon P. Martinez for the District of New Mexico. “The cultural heritage of American Indians is a precious national resource and it is critically important that we provide the proper respect to those whose creations are seen by some as simple retail commodities to be exploited for profit.”
“As Chairman of the Indian Arts and Crafts Board, U.S. Department of the Interior, I want to convey the Board’s deep appreciation for the outstanding leadership and contributions provided by the U.S Attorney’s Office for the District of New Mexico and the U.S. Fish and Wildlife Service, along with the other agency partners who participated in bringing this landmark enforcement action under the Indian Arts and Crafts Act,” said Chairman Harvey Pratt of the Indian Arts and Crafts Board. “By requiring truth-in-marketing of Indian art and craftwork, the Act is intended to protect Native American artists and artisans who rely heavily on the production and sale of traditional and contemporary art and craftworks to provide their economic livelihood, preserve their rich heritage and pass along their unique culture from generation to generation. Unfair competition from counterfeit Native American art and craftwork seriously erodes the sustainability, vitality and economic well-being of Indian tribes and their members and businesses. The Act is also intended to protect the consumers who purchase Native American art, bringing much needed financial resources to Indian communities in the Southwest and across the country. Eliminating the flow of counterfeit Native American art and craftwork provides a level playing field for the highly talented, dedicated, and hard-working producers of genuine Native American art. We must protect these authentic American Treasures.”
“Under our 2012 cooperative agreement with the Indian Arts and Crafts Board, the U.S. Fish and Wildlife Service has investigated numerous potential violations of the Indian Arts and Crafts Act,” said Special Agent in Charge Nicholas E. Chavez for U.S. Fish and Wildlife Service’s Office of Law Enforcement for the Southwest Region. “Our investigations primarily have focused on identifying fraudulent schemes where jewelry is marketed and sold as authentic Native American adornments to defraud tourists and other consumers. Through these investigations, the U.S. Fish and Wildlife Service endeavors to protect and preserve the authenticity of jewelry produced by our country’s Native American artisans.”
The four-count indictment that was unsealed earlier today charges Nael Ali, 51, and Mohammad Abed Manasra, 53, both of Albuquerque, New Mexico, and Christina Bowen, 41, of Los Lunas, New Mexico, with conspiracy to violate IACA and three substantive violations of the Act. Ali is the owner of two jewelry stores, Gallery 8 and Galleria Azul, in Albuquerque’s Old Town that purport to specialize in the sale of Native American jewelry. Bowen was formerly employed as a store manager by Ali. Manasra holds himself out as a wholesaler of Native American jewelry.
Ali was arrested in Albuquerque yesterday and Bowen surrendered to the U.S. Marshals Service this morning. Both made their initial appearances in federal court in Albuquerque this morning and were released pending trial. Manasra was arrested yesterday in La Habra, California, and will be transferred to the District of New Mexico to face the charges against him. If convicted of the charges against them, the defendants each face a statutory maximum penalty of five years in prison and a $250,000.00 fine. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
During yesterday’s law enforcement operation and as part of the continuing investigation, federal agents executed 15 search warrants in New Mexico and one in California. Eight of the search warrants were executed in Albuquerque including four at retail and wholesale jewelry businesses. In addition, search warrants were executed at three jewelry stores in Gallup, three jewelry stores in Santa Fe and a jewelry production shop in Zuni. Federal agents also executed a search warrant at a jewelry store in Calistoga, California. Three federal seizure warrants also were executed on bank accounts in a Charlotte, North Carolina, bank and a San Francisco, California, bank. In addition, the Philippines National Bureau of Investigations conducted a series of investigative interviews at two factories in Cebu City, Philippines.
The case was investigated by the Office of Law Enforcement for the Southwest Region of the U.S. Fish and Wildlife Service with assistance from the FBI, Homeland Security Investigations (HSI), U.S. Marshals Service, DEA and New Mexico Department of Game and Fish. The U.S. Fish and Wildlife Service’s Office of Law Enforcement for Region Eight and California Department of Fish and Wildlife provided support in Calistoga, California, and HSI provided support in La Habra, California. The U.S. Fish and Wildlife Service Attaché for Southeast Asia and the Philippine National Bureau of Investigations provided support in Cebu City, Philippines. Assistant U.S. Attorney Kristopher N. Houghton is prosecuting the case.
Three New Mexicans Charged with Fraudulently Selling Filipino-Made Jewelry as Native American-MadeRead the Press Release
ALBUQUERQUE – Three New Mexicans have been charged with violating the Indian Arts and Crafts Act (IACA) by conspiring to import and fraudulently sell Filipino-made jewelry as Native American-made. The indictment charging the three defendants is the result of an ongoing federal investigation led by the U.S. Fish and Wildlife Service into an international scheme to violate the IACA that included a law enforcement operation yesterday during which 16 search warrants were executed in New Mexico and California and related investigative activity took place in the Philippines.
The IACA prohibits the offer or display for sale, or the sale of any good in a manner that falsely suggests that it is Indian produced, an Indian product, or the product of a particular Indian and Indian tribe. The law is designed to prevent products from being marketed as “Indian made,” when the products are not, in fact, made by Indians. It covers all Indian and Indian-style traditional and contemporary arts and crafts produced after 1935, and broadly applies to the marketing of arts and crafts by any person in the United States. IACA provides critical economic benefits for Native American cultural development by recognizing that forgery and fraudulent Indian arts and crafts diminish the livelihood of Native American artists and craftspeople by lowering both market prices and standards.
“American Indian and Alaska Native people have contributed tremendously to the cultural and artistic heritage of our nation and they have an important future that must be protected,” said Acting Associate Attorney General Stuart F. Delery. “This case demonstrates our willingness to prosecute those who falsely market products as ‘Indian Made’ and thus undermine the livelihoods of Native American artists and craftspeople, many of whom are responsible for carrying precious spiritual and artistic knowledge from one generation to another.”
“The indictment announced today and yesterday’s enforcement operation are not only about enforcing the law but also about protecting and preserving the cultural heritage of Native Americans,” said U.S. Attorney Damon P. Martinez. “The cultural heritage of American Indians is a precious national resource and it is critically important that we provide the proper respect to those whose creations are seen by some as simple retail commodities to be exploited for profit.”
“As Chairman of the Indian Arts and Crafts Board, U.S. Department of the Interior, I want to convey the Board’s deep appreciation for the outstanding leadership and contributions provided by the U.S Attorney’s Office for the District of New Mexico and the U.S. Fish and Wildlife Service, along with the other agency partners who participated in bringing this landmark enforcement action under the Indian Arts and Crafts Act,” said Chairman Harvey Pratt of the Indian Arts and Crafts Board. “By requiring truth-in-marketing of Indian art and craftwork, the Act is intended to protect Native American artists and artisans who rely heavily on the production and sale of traditional and contemporary art and craftworks to provide their economic livelihood, preserve their rich heritage, and pass along their unique culture from generation to generation. Unfair competition from counterfeit Native American art and craftwork seriously erodes the sustainability, vitality, and economic well-being of Indian tribes and their members and businesses. The Act is also intended to protect the consumers who purchase Native American art, bringing much needed financial resources to Indian communities in the Southwest and across the country. Eliminating the flow of counterfeit Native American art and craftwork provides a level playing field for the highly talented, dedicated, and hard-working producers of genuine Native American art. We must protect these authentic American Treasures.”
“Under our 2012 cooperative agreement with the Indian Arts and Crafts Board, the U.S. Fish and Wildlife Service has investigated numerous potential violations of the Indian Arts and Crafts Act,” said Nicholas E. Chavez, Special Agent in Charge for the United States Fish and Wildlife Service, Office of Law Enforcement for the Southwest Region. “Our investigations primarily have focused on identifying fraudulent schemes where jewelry is marketed and sold as authentic Native American adornments to defraud tourists and other consumers. Through these investigations, the U.S. Fish and Wildlife Service endeavors to protect and preserve the authenticity of jewelry produced by our country’s Native American artisans.”
The four-count indictment that was unsealed earlier today charges Nael Ali, 51, and Mohammad Abed Manasra, 53, both of Albuquerque, N.M., and Christina Bowen, 41, of Los Lunas, N.M., with conspiracy to violate IACA and three substantive violations of the Act. Ali is the owner of two jewelry stores, Gallery 8 and Galleria Azul, in Albuquerque’s Old Town that purport to specialize in the sale of Native American jewelry. Bowen was formerly employed as a store manager by Ali. Manasra holds himself out as a wholesaler of Native American jewelry.
Ali was arrested in Albuquerque yesterday and Bowen surrendered to the U.S. Marshals Service this morning. Both made their initial appearances in federal court in Albuquerque this morning and were released pending trial. Manasra was arrested yesterday in La Habra, Calif., and will be transferred to the District of New Mexico to face the charges against him. If convicted of the charges against them, the defendants each face a statutory maximum penalty of five years in prison and a $250,000.00 fine. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
During yesterday’s law enforcement operation and as part of the continuing investigation, federal agents executed 15 search warrants in New Mexico and one in California. Eight of the search warrants were executed in Albuquerque including four at retail and wholesale jewelry businesses. In addition, search warrants were executed at three jewelry stores in Gallup, three jewelry stores in Santa Fe, and a jewelry production shop in Zuni. Federal agents also executed a search warrant at a jewelry store in Calistoga, Calif. Three federal seizure warrants also were executed on bank accounts in a Charlotte, N.C., bank and a San Francisco, Calif., bank. In addition, the Philippines National Bureau of Investigations conducted a series of investigative interviews at two factories in Cebu City, Philippines.
The case was investigated by the Office of Law Enforcement for the Southwest Region of the U.S. Fish and Wildlife Service with assistance from the FBI, Homeland Security Investigations (HSI), U.S. Marshals Service, DEA and New Mexico Department of Game and Fish. The U.S. Fish and Wildlife Service’s Office of Law Enforcement for Region Eight and California Department of Fish and Wildlife provided support in Calistoga, Calif., and HSI provided support in La Habra, Calif. The U.S. Fish and Wildlife Service Attaché for Southeast Asia and the Philippine National Bureau of Investigations provided support in Cebu City, Philippines. Assistant U.S. Attorney Kristopher N. Houghton is prosecuting the case.
Three More Arrested in $12 Million Health Care Fraud ConspiracyRead the Press Release
HOUSTON – Three more Houston residents, including a man who was practicing medicine without a license, have been arrested on wide-ranging charges involving a $12 million conspiracy to commit health care fraud and to pay kickbacks to patients, announced U.S. Attorney Kenneth Magidson.
Bompa Mbokosa Mompiere, 56, Ann Marie Rocha, 48, and Eddie Wayne Taylor, 56, are charged in a 30-count superseding indictment with conspiracy to commit health care fraud. Taylor is additionally charged with health care fraud. They were all taken into custody today. They all appeared this morning before U.S. Magistrate Judge Mary Milloy. Mompiere and Taylor will be in court again today at 2:00 p.m. to complete the initial proceedings.
The original 25-count indictment charged Mktrich “Mike” Yepremian, 58, Dr. Harding Ross, 61, Dr. Faiz Ahmed, 63, Jermaine Doleman, 38, Michael Wayne Wilson, 46, and Eric Johnson, 61. They were arrested in July 2015 in conjunction with a search warrant executed at a downtown office building where several clinics and a blood testing laboratory were located. With the exception of Doleman who is in custody on unrelated health care fraud charges, all were released upon posting bond.
Yepremian was the owner and operator of the clinics and lab. The indictment alleges Yepremian paid Doleman, Wilson, Johnson and Taylor to bring Medicare and Medicaid patients to his clinics so they could be billed for multiple, medically unnecessary diagnostic tests and for unnecessary blood tests. In turn, the patients were allegedly paid by Yepremian, Doleman, Wilson, Johnson and Taylor to attend the clinics.
The indictment alleges this scheme began in 2006 and involved clinics that were held in the names of “straw owners,” although Yepremian controlled all funds from the false billing. The clinics were named Crawford Medical Services, Mid City Healthcare, Care Family Practice, Arca Medical Clinic, while the lab was named Empire Clinical Laboratory.
Yepremian is additionally charged with two additional money laundering counts for allegedly funneling money to relatives. The superseding indictment seeks to forfeit a Houston home purchased in the name of one of Yepremian’s relatives.
The statutory maximum penalty for conspiracy, money laundering or health care fraud is up to 10 years in prison as well as a maximum $250,000 fine, while a conviction for a violation of the anti-kickback statute could result in a five-year maximum term of imprisonment.
The charges are the result of the investigative efforts of the Texas Attorney General’s Medicaid Fraud Control Unit, FBI and the Department of Health and Human Services - Office of Inspector General, Office of Investigations. Special Assistant United States Attorney Suzanne Bradley and Assistant United States Attorney Tina Ansari are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Stearns County Man Charged with Receipt and Possession of Child PornographyRead the Press Release
United States Attorney Andrew M. Luger, FBI Special Agent in Charge for the Minneapolis Division Richard T. Thornton, Minnesota Bureau of Criminal Apprehension (BCA) Superintendent Drew Evans and Stearns County Sheriff John Sanner today announced a federal criminal complaint charging DANIEL JAMES HEINRICH, 52, with receipt and possession of child pornography. HEINRICH made an initial appearance today in U.S. District Court in St. Paul, Minn., before Magistrate Judge Jeffrey J. Keyes. A detention hearing is expected to be held on Monday, November 2, 2015.
According to the federal criminal complaint and documents filed in state court, a search warrant was executed on July 28, 2015, at the Annandale, Minn., home of the defendant, seeking evidence related to the January 13, 1989, kidnapping and sexual assault of a Cold Spring, Minn., juvenile male and the October 22, 1989, abduction of a St. Joseph Township, Minn., juvenile male. During the execution of the search warrant, officers recovered numerous images of suspected child pornography from the residence. Those images were maintained in multiple three-ring binders and on the hard drive of a desktop computer.
“The charges against Mr. Heinrich result from a long-term child exploitation investigation,” said U.S. Attorney Luger. “Every image of child pornography victimizes a young person. Their lives and those of their families are never the same. This investigation wasn’t initiated to pursue those who trade in child pornography, but that’s what it uncovered and that’s what we’ve charged. The Stearns County Sheriff, Minnesota Bureau of Criminal Apprehension and the FBI continue the relentless pursuit of justice through this ongoing investigation for those who have lost loved ones.”
“This arrest sends a clear message to those who would exploit children: Law enforcement is actively pursuing you,” said Special Agent in Charge Thornton. “Children are the most innocent among us and there is no greater cause than their safety and protection. The FBI, in conjunction with our law enforcement partners, will continue to aggressively seek those who would victimize children.”
“An investigation of this length and nature requires an unwavering commitment dedicated to ensure that in the end justice is served,” said Stearns County Sheriff John L. Sanner. “The Stearns County Sheriff’s Office is grateful for and appreciates this level of commitment from our partners, the BCA, the FBI and the community as a whole.”
“Our pursuit of predators who target our children will never stop,” said BCA Superintendent Drew Evans. “It doesn’t matter how long ago it happened. In fact, as the science and the tools we use improve year after year, so does our ability to solve these crimes.”
According to the criminal complaint, among the suspected child pornography images stored in three-ring binders in HEINRICH’s home were more than 100 images that appear to depict child pornography, some of which depict known child victims, based on a review of national database of known victims of sexual abuse. In addition to the printed images, digital images of suspected child pornography were recovered from the defendant’s computer hard drive. Investigators also recovered hours of videos, apparently surreptitiously recorded by HEINRICH, of neighborhood children delivering newspapers, riding bicycles, playing in public playgrounds and participating in sporting activities.
In addition to the suspected child pornography discovered in HEINRICH’s home, and according to the criminal complaint, a recently-tested article of clothing worn by the juvenile male during a 1989 Cold Spring abduction and sexual assault was found to contain the defendant’s DNA. According to the BCA laboratory report, the predominant male DNA profile matches a known sample of the defendant. The predominant profile match to the defendant’s DNA would not be expected to occur more than once among unrelated individuals in the world population.
If you have information about this case, please contact the Stearns County Sheriff’s Office at 1-320-656-6625 or the National Center for Missing and Exploited Children at 1-800-THE-LOST.
This case is the result of an investigation conducted by the FBI, Minnesota Bureau of Criminal Apprehension and the Stearns County Sheriff’s Office.
This case is being prosecuted by Assistant United States Attorneys Steven L. Schleicher and Julie Allyn of the U.S. Attorney’s Office’s Special Prosecutions Unit.
Defendant Information:
DANIEL JAMES HEINRICH, 52
Annandale, Minn.
Charges:
- Possession of child pornography, 4 counts
- Receipt of child pornography, 1 count
###
Additional news available on our website.
Follow us on Twitter and Facebook.
United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the criminal complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Statesboro Man Convicted on Identity Theft ChargesRead the Press Release
Jai Devon Lee, age 39, of Statesboro, Georgia, was convicted on October 27, 2015 of identity theft, aggravated identity theft and fraud in connection with access devices following a two-day jury trial in Valdosta. Senior U.S. District Court Judge Hugh Lawson presided over the trial.
Evidence presented at trial showed that in June 2014, Mr. Lee possessed documents containing personal identifying information, including names, social security numbers, and dates of birth of more than 1000 individuals, intended to be used for fraudulent purposes. A tip was made to the U.S. Secret Service office in Albany, Georgia on June 19, 2014 informing the agency that Mr. Lee was trying to arrange to sell the personal identifying information (PII) through the source for $50 each. A meeting was arranged at a Valdosta restaurant on June 25, 2014 between Mr. Lee and a Lowndes County Sheriff’s Office detective posing as a buyer who would purchase 900 of the documents for $45,000.00. Mr. Lee arrived with a backpack containing a shoebox filed with the stolen identifying information he intended to sell, as well as a folder containing more stolen identifying information, including some personal credit reports. Mr. Lee was taken into custody at that time and charged.
U.S. Attorney Michael Moore said, “This conviction in this case is the result of the good work and cooperation between the Lowndes County Sheriff’s Office and the Secret Service. Identity theft crimes wreak havoc for those whose information is stolen. The frustration that these victims suffer in having to monitor their credit reports and request new credit cards and checking accounts is not lost on federal law enforcement agencies. We’ll continue to pursue those who commit these crimes. As we prepare for sentencing, I expect that the only number Mr. Lee has on his mind is the number of years he can expect to spend in federal prison.”
“Identity theft is an ever-increasing problem throughout the country. The U.S. Secret Service remains committed to aggressively investigating those responsible for committing identity theft for the purpose of defrauding the nation’s financial system. Victims that have their personally identifiable information (PII) stolen have their lives invaded in a way that often causes long lasting financial consequences. Along with our law enforcement partners we will continue to pursue those committing these crimes,” said Clint A. Bush, Resident Agent in Charge, Albany, Georgia Resident Office, United States Secret Service.
Sentencing will take place on February 24, 2015 at 9:30 am in Valdosta. Mr. Lee has an extensive criminal record, including nine (9) prior felony convictions, and faces a possible maximum sentence of twenty-two (22) years imprisonment.
The case was investigated by the United States Secret Service and the Lowndes County Sheriff’s Office. Assistant United States Attorney Robert D. McCullers is prosecuting the case on behalf of the Government.
Statement by U.S. Attorney Damon P. Martinez on Assassination of Albuquerque Police Officer Daniel Webster in Line of DutyRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez released the following statement regarding the death of Albuquerque Police Officer Daniel Webster:
“We were deeply saddened to learn that Officer Daniel Webster did not survive the senseless act of violence he suffered in the line of duty on the evening of October 21, 2015. We offer our deepest condolences to Michelle Carlino-Webster, the widow of this fallen hero, and the rest of his family and loved ones, and we condemn the despicable act that took Officer Webster from us in the strongest possible terms.
“Officer Webster was a dedicated law enforcement officer and a true patriot who served his country in the U.S. Army for 20 years. He leaves behind an enduring legacy that will live on in the lives he touched; in the work that the men and women of the Albuquerque Police Department continue to perform; and in a city and world that are safer because of his devoted service. His loss underscores the real dangers that are routinely faced by those who protect and serve their fellow citizens, and will be a constant reminder that we are deeply indebted to our law enforcement officers for placing their lives on the line each and every day in order to preserve public safety.
“The thoughts and prayers of the entire federal law enforcement community are with Officer Webster’s family and loved ones during this very difficult time. As we go forward, the Justice Department will honor Officer Webster’s service and his sacrifice by fighting for the values he protected every day, and by safeguarding the community for which he gave his life.”
South Jersey Man Sentenced to 15 Years in Prison for Conspiracy to Traffic Guns from South Carolina to New JerseyRead the Press Release
CAMDEN, N.J. – A Camden man was sentenced today to 180 months in prison for his role in a conspiracy to sell 22 guns without a license, U.S. Attorney Paul J. Fishman announced.
Joseph Rutling, 24, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to deal firearms without a license and one count of possession of a firearm by a previously convicted felon. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Between April 8, 2013, and July 28, 2014, Joseph Rutling and his brother, Marcus Rutling, a/k/a “Fresh,” 33, of Camden, and Saluda, South Carolina, conspired with others to illegally sell firearms without a license, including handguns, shotguns and an assault rifle. They obtained the firearms from pawn shops, gun stores and other sources in South Carolina and brought them to New Jersey, at times using Amtrak trains to transport the guns. Marcus Rutling personally sold or participated in the sale of at least seven firearms, including handguns and shotguns, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Joseph Rutling personally sold or participated in the sale of at least 15 firearms, including handguns, shotguns and an assault rifle, also to an ATF cooperating witness. On at least five occasions, Joseph Rutling sold ammunition with the firearms.
In addition to the prison term, Judge Bumb sentenced Joseph Rutling to three years of supervised release. Marcus Rutling also pleaded guilty to his role in the conspiracy and was sentenced to 14 years in prison on Oct. 8, 2015.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s sentencing. He also thanked special agents from the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, as well as officers from the Winslow Township and Clementon, New Jersey, police departments, for their work in the case.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.
Defense counsel: Mark W. Catanzaro Esq., Mount Holly
Somerset County, New Jersey, Builder Admits Bank Fraud Associated with Bogus Sale of Irvington, New Jersey, PropertyRead the Press Release
NEWARK, N.J. – A Neshanic Station, New Jersey, man today admitted his role in a scheme that used straw buyers and phony loan documents to fraudulently obtain a $400,500 loan on a property in Irvington, New Jersey, U.S. Attorney Paul J. Fishman announced.
Antonio Pimenta, 47, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count Two of an indictment charging him with bank fraud.
According to documents filed and statements made in court:
Pimenta owned and managed Kelmar Construction Co. (“Kelmar”). Kelmar built multiple properties in Irvington, New Jersey. These properties were sold to straw buyers utilizing fraudulent mortgage loans brokered by loan officer, Klary Arcentales, 47, of Lyndhurst, New Jersey, and closed by settlement agent Linda Cohen, 57, of Orange, New Jersey, who used fraudulent settlement statements (HUD-1s) to hide the true sources and destinations of the mortgage funds. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings.
One such transaction took place in September 2007 on a property located at 97 22nd Street in Irvington, New Jersey, which was built by Kelmar. The mortgage loan application contained false and fraudulent information concerning the straw buyer’s income, employment and rental history. The application also falsely represented that the straw buyer intended to reside in the property as his primary residence. The straw buyer also represented to JP Morgan Chase that he would make a down payment of $44,500. Based on the bogus information, JP Morgan Chase agreed to fund a mortgage loan of approximately $400,500.
Pimenta admitted that despite the fact that he never received a down payment, he knowingly signed a settlement statement that falsely indicated that the payment was made. Afterwards, Pimenta and Kelmar received approximately $381,000 from the fraudulent transaction. No payments were ever made to JP Morgan Chase for this mortgage loan.
The charge to which Pimenta pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Feb. 16, 2016.
Arcentales and Cohen have both pleaded guilty to related charges and await sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and special agents of the Federal Housing Finance Agency, Office of the Inspector General, under the direction of Special Agent in Charge Steven Perez, for the investigation leading to today’s plea. Fishman also thanked the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, for its role in the investigation.
The government is represented by Special Assistant U.S. Attorney Sean M. Farrell and Assistant U.S. Attorneys Zach Intrater and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Alain Leibman Esq., Princeton, New Jersey
Seven Individuals Indicted for Conspiracy, Mail and Wire Fraud, and Identity Theft in Connection with Laswuit Against BPRead the Press Release
Gulfport, Miss – Mikal C. Watts, 48, David Watts, 50, Wynter Lee, 37, of San Antonio, Texas, Gregory P. Warren a/k/a Greg Warren, 51, of Lafayette, Louisiana, Hector Eloy Guerra, 48, of Harlingen, Texas, Thi Houng Le a/k/a Kristy Le, 48, of Pascagoula, Mississippi, and Thi Hoaug Nguyen a/k/a Abbie Nguyen, 30, of Grand Bay, Alabama, were indicted on September 15, 2015 by a federal grand jury on 95 counts of Conspiracy, Mail and Wire Fraud, Identity Theft, and Aggravated Identity Theft, announced U.S. Attorney Gregory K. Davis and U.S. Secret Service Special Agent in Charge Craig Caldwell.
The indictment, unsealed today, alleges that the defendants conspired to defraud numerous victims from Mississippi, Louisiana, Texas, Alabama, and elsewhere, as well as the Gulf Coast Claims Facility and BP. As set forth in the indictment, the defendants, without contacting the individuals, would obtain names, addresses, dates of birth, and social security numbers from any source available to create "clients" for anticipated litigation as a result of the Deepwater Horizon Oil Spill. The indictment further alleges that the defendants fraudulently submitted names of over 40,000 individuals as plaintiffs represented by defendant Mikal C. Watts in litigation related to the Deepwater Horizon/BP oil spill, knowing that the individuals had not consented to be represented by the firm, and/or that stolen and false social security numbers, dates of birth, addresses, and occupations were claimed. According to the indictment, the defendants attempted to obtain payments from the Gulf Coast Claims Facility for persons Mikal C. Watts claimed to represent and ultimately submitted "Presentment Forms" to BP for each of the 40,000 plus individuals Mikal C. Watts claimed to represent. The indictment alleges that the total amount of claims submitted by the defendants to BP was in excess of $2 billion.
"The defendants in this case are accused of exploiting a disaster relief program set up to help those who were injured or suffered an economic loss as a result of the BP Oil spill – the worst environmental disaster in American history," said U.S. Attorney Davis. "The indictment alleges that the defendants carried out mail and wire fraud schemes using stolen identities of coastal residents in order to enrich themselves." Davis praised the outstanding investigative work of the U.S. Secret Service in their investigation of this complex case.
"This indictment represents the largest disaster fraud identity theft case to date, associated with the Deepwater Horizon Oil Spill Trust. This case highlights the Secret Service’s investigative expertise in combatting some of the most sophisticated, prolific financial crimes over our 150 year history," said Craig S. Caldwell, Special Agent in Charge of the United States Secret Service Birmingham Field Office. "This investigation serves as a great example of the steps the Secret Service will undertake to relentlessly defend the Nation’s financial infrastructure."
Conspiracy carries a maximum sentence of 5 years in prison and a $250,000 fine. Each count of Mail and Wire Fraud carries a maximum sentence of 20 years in prison and a $250,000 fine. Each count of Identity Theft carries a maximum sentence of 5 years in prison and a $250,000 fine. Each count of Aggravated Identity Theft carries a two year mandatory sentence and a $250,000 fine.
The defendants are scheduled to appear before U.S. Magistrate Judge John Gargiulo on Thursday, October 29, 2015 at 1:30 p.m. for their initial appearance and arraignment. Assistant U.S. Attorneys John Dowdy and Jerry Rushing are prosecuting the case for the government.
The public is reminded that an indictment is a formal charge that a defendant has committed a violation of the federal criminal laws. All defendants are presumed innocent unless and until proven guilty.
###
If you believe you were a victim of identity theft in connection with this case or if you have any knowledge of fraudulent claims or schemes to obtain funds intended for the victims of the Deepwater Horizon Oil Spill, please contact the Gulf Coast Disaster Fraud Hotline at (877)NCDF GCF (623-3423).
Sentencings for October 23 - October 29, 2015Read the Press Release
Roberto Crispin Salinas-Garcia, 34, of Mexico, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on October 29, 2015, for illegal re-entry of a previously deported alien into the United States. Salinas-Garcia was arrested in Gillette, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Dale Peden, 52, was sentenced by Federal District Court Judge Scott W. Skavdahl on October 28, 2015, for conspiracy to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Peden was arrested in Gillette, Wyoming. He received 180 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $1,000.00 fine and a $100.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. 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.
Stacy Amanda Deming, 31, of Sparks, Nevada, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on October 26, 2015, for possession with intent to distribute 50 grams or more of methamphetamine and aiding and abetting. Deming was arrested in Rawlins, Wyoming. She received 120 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $500.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Dylan Lee Smith, 21, of Modesto, California, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on October 26, 2015, for simple possession of marijuana. Smith was arrested in Rawlins, Wyoming. He received time served, placed on six months supervised release, and was ordered to pay a $100.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Katie Collins, 35, of Gillette, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on October 23, 2015, for conspiracy to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Collins was arrested in Casper, Wyoming. She received 57 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $400.00 fine and a $100.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. 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.
Schuylkill County Man Sentenced to 27 Months in Prison for Illegal Possession of Unregistered MachinegunsRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 51-year-old Schuylkill County man was sentenced today to 27 months in prison by U.S. District Court Judge Malachy E. Mannion in Scranton, for his illegal possession of a fully functional unregistered machinegun, and an unmarked and unregistered drop in auto sear—which is a specific part that makes a semi-automatic rifle fire fully automatic when placed into the weapon.
According to United States Attorney Peter Smith, the defendant, James Augustus Brauer, previously pleaded guilty in April 2015, at which time he admitted to possession of the machineguns at his home on January 24, 2012.
The conviction is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pennsylvania State Police.
Judge Mannion also ordered that Brauer serve three years on supervised release following his prison sentence.
Assistant U.S. Attorney John Gurganus prosecuted the case.
# # #
Previously Deported Alien Charged with Illegal Re-EntryRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced that yesterday a federal Grand Jury in Harrisburg charged Manuel Zarate-Palomares with illegal re-entry into the United States by a previously deported alien.
According to United States Attorney Peter Smith, Zarate-Palomares, age 34, a native and citizen of Mexico, was arrested by the Border Patrol in New York and was extradited to Adams County, Pennsylvania on a bench warrant related to a traffic offense. He was previously deported from the United States on at least six occasions.
This matter was investigated by the U.S. Immigration and Customs Enforcement (ICE) Enforcement and Removal Operations (ERO). Prosecution has been assigned to Assistant U.S. Attorney Chelsea Schinnour.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 2 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Porcupine Woman Sentenced for False StatementRead the Press Release
United States Attorney Randolph J. Seiler announced that a Porcupine, South Dakota, woman convicted of False Statement was sentenced on October 28, 2015, by U.S. District Chief Judge Jeffrey L. Viken.
Danishia Marshall, age 20, was sentenced to 10 months in custody, followed by 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Marshall was indicted by a federal grand jury on December 16, 2014. She pled guilty on June 11, 2015.
The conviction stemmed from an incident on September 27, 2013, when a call came into the Pine Ridge Police Department indicating that Marshall was intoxicated and would not allow relatives to care for her infant baby. An officer responded and upon investigation, Marshall was placed under arrest on a tribal charge.
The officer arrived at the Kyle jail with Marshall, and during the booking process, she appeared to have an asthma attack. The officer then transported Marshall to the Indian Health Services hospital in Pine Ridge, and while enroute, Marshall slumped over in the back seat. The officer was concerned for her health, and radioed for an ambulance. The ambulance took custody of Marshall, and the officer followed the ambulance to the hospital.
While in the ambulance, Marshall made an allegation of sexual assault against the officer. She reported it to tribal police and had a sexual assault examination at the hospital.
On October 3, 2013, Marshall was interviewed by a Federal Bureau of Investigation (FBI) agent. During the interview, Marshall falsely told the agent she was raped and sodomized by the officer. When Marshall made these statements to the ambulance crew, medical staff, tribal police, and the FBI, Marshall knew the statements were false. She knew that the officer had not sexually assaulted her, and that she had falsely accused an innocent man of a crime.
This case was investigated by the FBI. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Marshall was immediately turned over to the custody of the U.S. Marshals Service.
Pittsburgh Man Pleads Guilty to Counterfeit Currency ChargesRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to charges of conspiracy, making counterfeit currency and passing counterfeit money, United States Attorney David J. Hickton announced today.
Robert W. Jackson, Jr., a/k/a Flace Rob, a/k/a Black Rob, 26 of Pittsburgh, PA pleaded guilty to six counts before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that in and around May 2013, Jackson and others conspired to make and pass counterfeit currency, and from on or about January 14, 2014, January 23, 2014, and January 26, 2014, Jackson passed counterfeit money.
Judge Conti scheduled sentencing for Feb.5, 2016 at 3:30 p.m. The law provides for a total sentence of 105 years in prison, a fine of $1,500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The United States Secret Service conducted the investigation that led to the prosecution of Jackson.
Philadelphia Man Sentenced to Prison for Drug Law ViolationsRead the Press Release
JOHNSTOWN, Pa. - A resident of Philadelphia, Pa., has been sentenced in federal court to 30 months in prison and three years’ supervised release on his conviction of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Paul A. Robinson, Jr., 33, of Philadelphia, Pa.
According to information presented to the court, from Jan. 31, 2013, to April 23, 2013, Robinson conspired to distribute less than 28 grams of cocaine base, in the form commonly known as “crack.” Robinson also distributed less than 28 grams of cocaine base on Jan. 31, 2013, and Feb. 12. 2013.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation leading to the successful prosecution of Robinson.
Philadelphia Man Charged with Setting Fire That Damaged Apartment Buildings and Construction SiteRead the Press Release
PHILADELPHIA – Stephen Gregory Pettiway, 50, of Philadelphia, PA, was charged today by indictment with setting a fire on September 15, 2015, that damaged three properties in Philadelphia, announced United States Attorney Zane David Memeger. According to the indictment, Pettiway started a fire that caused damage to equipment and buildings that included Chancellor Apartments at 206 South 13th Street, a construction site at 208 South 13th Street owned by Maze Hospitality Group, and Gramercy Building at 210 South 13th Street. He is charged with one count of malicious damage by means of fire of a building used in interstate commerce.
If convicted the defendant faces a mandatory-minimum term of 60 months in prison with a possible guideline sentencing range of up to 71 months in prison without the possibility of parole, a fine of up to $250,000, a $100 special assessment, and up to three years of supervised release.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Philadelphia Fire Department. It is being prosecuted by Assistant United States Attorneys José R. Arteaga and Thomas M. Zaleski.
Philadelphia Man and Linden Woman Indicted for Conspiracy to Distribute Heroin Following Arrest in Loyalsock TownshipRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that a federal grand jury in Harrisburg returned an Indictment yesterday charging a Philadelphia man and a Linden, Pennsylvania woman with conspiracy to distribute and distribution of heroin in Loyalsock Township, Lycoming County.
According to U.S. Attorney Peter Smith, the grand jury alleged that Timothy Moses, age 34, and Marissa Copen, age 26, conspired to distribute and distribution of heroin on or about October 2015. The indictment alleges that they utilized rental vehicles and hotel rooms to facilitate the distribution of heroin in the Williamsport area to carry out their activities. Moses and Copen were arrested on October 21, 2015.
The federal investigation was conducted by the Federal Bureau of Investigation with the assistance of the Pennsylvania State Police. Assistant United States Attorney George J. Rocktashel has been assigned to the prosecution of this matter.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the sentencing judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 40 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the sentencing judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Owners of Danbury Flooring Company Plead Guilty to Federal Tax ChargesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and William P. Offord, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that DAVID BENINCASA, 34, and SCOTT BENINCASA, 32, both of Danbury, waived their right to indictment and pleaded guilty yesterday in Hartford federal court to federal tax offenses.
According to court documents and statements made in court, DAVID BENINCASA and his brother, SCOTT BENINCASA, were 50 percent owners in Goodhouse Flooring, LLC, a business that provides floor installation and flooring products to retail and commercial customers. DAVID BENINCASA assisted SCOTT BENICASA with the daily operations of the business, but had primary responsibility for the financial aspects of the business. For the 2008 through 2010 tax years, DAVID and SCOTT BENINCASA intentionally understated gross receipts from their business on the Schedule C attached to their respective federal personal income tax filings. During those years, the brothers failed to accurately report the expenses incurred in running their business, as they paid certain laborers who worked for their business in cash and then failed to reflect the cash payments on their filed returns.
The additional tax due and owing attributable to DAVID and SCOTT BENINCASA’s criminal conduct is $238,274 and $47,076, respectively.
In pleading guilty, SCOTT BENINCASA also admitted that, during an IRS civil audit, he submitted a false real estate log and business schedule in an effort to improperly justify previously taken deductions on his 2009 federal personal income tax return.
DAVID BENINCASA pleaded guilty to one count of tax evasion, which carries a maximum term of imprisonment of five years. He is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on January 25, 2016. SCOTT BENINCASA pleaded guilty to one count of filing a false tax return, which carries a maximum term of imprisonment of three years. He is scheduled to be sentenced by Judge Chatigny on January 21, 2016. Both defendants also will be ordered to pay full restitution, plus applicable interest and penalties.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
North Bergen, New Jersey, Compliance Officer Indicted for Rigging Contractor Selection Process for Community Development ProjectsRead the Press Release
NEWARK, N.J. – A compliance officer with the Union City Community Development Agency (UCCDA) was indicted today for allegedly manipulating the contractor selection process for federally-funded residential rehabilitation and sidewalk replacement projects, causing losses of at least $250,000, U.S. Attorney Paul J. Fishman announced.
Washington Borgono, 64, of North Bergen, New Jersey, was charged with one count of obtaining by fraud, converting and misapplying government funds provided by the UCCDA and one count of conspiring with others to do the same. The indictment was returned today by a federal grand jury sitting in Newark.
According to the indictment:
From April 2007 through February 2013, Borgono was a compliance officer at the UCCDA, a local government agency that receives grant funds from the U.S. Department of Housing and Urban Development (HUD) for home improvement projects, sidewalk replacement and other projects.
From 2007 through 2013, Borgono conspired with Johnny Garces, 52, of Union City, New Jersey, a UCCDA inspector, and contractors Joseph Lado, 67, of Fort Lee, New Jersey, Leovaldo Fundora, 54, of Guttenberg, New Jersey, and others to use false and misleading bids to rig the selection process for HUD-funded projects. In addition to instructing Lado, Fundora and other contractors to submit phony higher bids from competitors or their own companies, Borgono and Garces used fabricated higher bids or threw out lower bids in order to secure certain UCCDA projects for Lado, Fundora and others.
The charge of obtaining by fraud, converting and misapplying government funds carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
The charges and allegations contained in the indictment are merely accusations, and Borgono is presumed innocent unless and until proven guilty.
Garces, Lado and Fundora previously pleaded guilty to their roles in the scheme and await sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, for their work in the investigation.
The government is represented by Assistant U.S. Attorney Barbara R. Llanes of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Louis A. Zayas Esq., North Bergen, New Jersey
Norristown Man Charged with Bank RobberyRead the Press Release
PHILADELPHIA – Shawn LaSalle Harris, 37, of Norristown, PA, was charged today by Indictment with armed bank robbery and a weapons offense, announced United States Attorney Zane David Memeger. According to the indictment, on June 3, 2015, Harris held up the Bank of America branch at 420 Plymouth Road, in Plymouth Meeting, PA. He allegedly brandished and discharged a .380 caliber Ruger handgun.
If convicted, Harris faces a mandatory minimum term of 10 years in prison with a statutory maximum sentence of life, up to five years of supervised release, a $200 special assessment and a possible fine.
The case was investigated by the FBI and the Plymouth Township Police Department. It is being prosecuted by Assistant United States Attorney José R. Arteaga.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
New Jersey Man Admits Conspiring to Provide Material Support to ISILRead the Press Release
A West New York, New Jersey, man today admitted that he conspired to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division.
Alaa Saadeh, 24, pleaded guilty before U.S. District Judge Susan D. Wigenton of the District of New Jersey to an information charging him with one count of conspiring with others to provide material support to ISIL. He remains detained without bail.
“Saadeh conspired with his brother and others to travel overseas to join ISIL,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“Alaa Saadeh is the second defendant in this case who has admitted trying to provide material support to a known terrorist organization,” said U.S. Attorney Fishman. “That organization, and others who share its goals, are intent on recruiting people in this country and around the world to join their campaign against our security. The fight against these kinds of groups is going on around the world, but is also being waged here at home. They are intent on threatening the safety of Americans here and abroad, and we and our law enforcement partners are intent on stopping them.”
“Today in the U.S. District Court of New Jersey Alaa Saadeh admitted he planned to travel to Syria to join ISIL along with others,” said Special Agent in Charge Frankel. “Now, thanks to the efforts of Newark FBI’s Joint Terrorism Task Force, Saadeh will go to prison rather than take up arms overseas.”
According to documents filed in this and related cases and statements made in court:
Saadeh admitted that prior to his arrest on June 29, 2015, he planned to travel overseas to join ISIL along with others. Saadeh discussed the plans to join ISIL with his brother, Nader Saadeh, Samuel Rahamin Topaz and Munther Omar Saleh, and told the judge today that each of them indicated that they wanted to join ISIL at various times. Saadeh also admitted that he watched ISIL-related videos with Nader Saadeh and Topaz, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.
On May 5, 2015, Nader Saadeh, departed the United States with plans to travel overseas to join ISIL as part of the conspiracy, according to Saadeh’s statements in court today. Saadeh further admitted assisting Nader Saadeh with these plans by letting him purchase airline tickets using Saadeh’s credit card, removing the SIM card from Nader’s smartphone and resetting the smartphone in an effort to avoid detection. Saadeh admitted that Saleh assisted Nader Saadeh by giving him a contact that would facilitate Nader’s travel from Turkey to ISIL in Syria. Saadeh further admitted that after his brother left the United States, Saleh and Topaz intended to travel overseas to join ISIL. After becoming aware that the FBI was investigating this matter, Saadeh instructed an individual who knew of Nader Saadeh’s support for ISIL to lie if questioned by the FBI on the subject. Saadeh further admitted telling this individual to “just play stupid,” “pretend it never happened” and “keep it honest up to a point.”
Saadeh admitted to knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes and executing individuals who did not obey ISIL’s commands.
The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 15 years in prison and a fine of $250,000. Sentencing is scheduled for Feb. 16, 2016.
Saadeh’s alleged co-conspirators are being prosecuted and are currently in federal custody. On Sept. 9, 2015, Topaz pleaded guilty before Judge Wigenton to conspiring to provide material support to ISIL. Nader Saadeh has been charged in a criminal complaint with conspiring to provide material support to ISIL, among other charges. Saleh has been indicted on terrorism-related charges in the Eastern District of New York. The charges and allegations against Nader Saadeh and Saleh are merely accusations, and they are presumed innocent unless and until proven guilty.
Assistant Attorney General Carlin and U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, under the direction of Special Agent in Charge Frankel, and the Joint Terrorism Task Force with the investigation leading to today’s guilty plea.
The case is being prosecuted by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta and Francisco J. Navarro of the District of New Jersey, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
Alaa Saadeh Information
Alaa Saadeh Plea Agreement
Nebraska Man Pleads Guilty to Unauthorized Access to BVU ComputersRead the Press Release
A man who was upset at being passed over for an IT position at Buena Vista University and gained unauthorized access to several BVU computers, pled guilty on October 28, 2015, in federal court in Sioux City.
David Boyer, age 46, from Nebraska, was convicted of one count of unauthorized access to a protected computer.
In a plea agreement, Boyer admitted that from October 2009, through June 4, 2010, he intentionally accessed protected computers belonging to Buena Vista University without authorization. Boyer accessed the computers and email accounts of the President, Vice President and other employees of Buena Vista University because he was angry at University for failing to promote him to be the head of the IT department, and hiring another individual for that position. As part of the plea agreement Boyer agreed to pay $100,000 in restitution, and signed a written apology to the University.
Sentencing before United States District Court Judge Mark W. Bennett will be set after a presentence report is prepared. Boyer remains free on bond previously set pending sentencing. Boyer faces a term of imprisonment of not more than 1 year, a $10,000 fine, a $25 special assessment, and at least 1 year of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Timothy T. Duax and was investigated by the Iowa Department of Criminal Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-4109.
Follow us on Twitter @USAO_NDIA.
Missoula Tax Preparer Sentenced for Tax FraudRead the Press Release
MISSOULA – Roy Eugene Baker, Jr., 71, of Missoula, MT, was sentenced today in Missoula federal court. In July, Baker pleaded guilty before U.S. Magistrate Jeremiah Lynch to one count of Aiding or Advising a False Tax Return. Chief U.S. District Court Judge Dana Christensen Sentenced Baker to five years’ probation and the payment of $11,768.24 in restitution. Baker was initially charged by indictment with six counts of Aiding or Advising a False Tax Return and one count of False Statements to a Government Agency.
The IRS began investigating Baker and his tax preparation company, Bak-Tax Management Service, following a complaint by one of Baker’s clients that Baker had falsely inflated business expenses on the client’s tax return. Two undercover IRS agents went to Bak-Tax to have tax returns prepared. Baker prepared a return for one of the agents that included false business expenses in the amount of $4,433. When the agent questioned Baker about the figure, Baker responded, “I gave you a few more supplies there.”
When subsequently questioned by the IRS about the cost of goods figure reported on the undercover agent’s tax return, Baker lied, stating that the figure had been supplied by the client. An audit of all of Baker’s clients revealed $467,737 in underreported tax to the IRS. The Government charged Baker based on $59,789 of criminal loss to the IRS from those clients whose records and testimony could prove beyond a reasonable doubt that Baker falsified their tax returns. Baker’s methods included creating false schedule C businesses, inflating business expenses, and omitting income reported to him by his clients. When some of Baker’s clients confronted him, he claimed ignorance and refused to help them with the audit process. In its recommendation for sentencing, the United States noted that Baker’s actions resulted in a significant fraud against both the United States Treasury and his own clients, many of whom owed substantial amounts to the IRS as a result of Baker’s actions.
This case was prosecuted by Assistant U.S. Attorney Chad Spraker and investigated by the Internal Revenue Service.
Michigan Ferrari Mechanic Sentenced to Prison for Tax FraudRead the Press Release
A Smith’s Creek, Michigan resident, who specialized in repairing classic and rare cars was sentenced today to two years in prison, followed by two years of supervised release, for tax evasion and failure to file income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
On April 29, Terry Myr, 71, was convicted by a jury on one count of attempted tax evasion and four counts of failure to file tax returns. According to the evidence presented at trial and court documents, the Internal Revenue Service (IRS) assessed Myr approximately $195,000 in taxes, interest and penalties for his failure to report all of his income for the tax years 2000 through 2003. In 2009, when his tax liabilities remained unpaid, Myr sold a rare Ferrari engine for $610,000. To prevent the IRS from collecting the taxes he owed, Myr transferred property that he owned to a third party, used nominee companies to conceal his income and assets and otherwise dealt in cash. Myr used some of the Ferrari engine proceeds to purchase more than $360,000 in gold and silver coins. Myr also attempted to evade the payment of his taxes by asking his customers to pay him in cash, money orders, or prepaid debit cards. The evidence also showed that although Myr was required to file individual income tax returns, he had not filed a tax return or paid federal income taxes since 2001. The government estimated that Myr’s actions caused a total tax loss of $738,904.
U.S. District Court Judge Nancy G. Edmunds in the Eastern District of Michigan also ordered Myr to pay his back taxes, penalties and interest.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation who investigated the case, and Trial Attorneys Tiwana Wright and Kenneth C. Vert of the Tax Division, who are prosecuting the case.
Mexican National Convicted of Importing Nearly $2 Million in MethRead the Press Release
McALLEN, Texas – A 43-year-old Mexican national has entered a guilty plea to importing 75 kilograms of methamphetamine into the country hidden within a load of squash and cactus, announced U.S. Attorney Kenneth Magidson.
On March 31, 2015, Daniel Salvador Gomez-Reyes was intercepted by federal agents while was driving a semi-truck loaded with squash and cactus into the Pharr port of entry from Mexico. Upon investigation, federal agents soon discovered 75 kilograms of methamphetamine hidden within false compartments in the pallets under the produce. Gomez-Reyes admitted he picked up the narcotics-laden produce under suspicious circumstances in Mexico and that he knew he was importing controlled substances into the U.S.
The estimated value of the load of methamphetamine is estimated to be approximately $1.98 million.
U.S. District Judge Randy Crane, accepted the plea and has sentencing for Jan. 14, 2016. At that time, Gomez-Reyes faces up to life in federal prison. He will remain in custody pending that hearing.
The charges are the result of an investigation conducted by Homeland Security Investigations and Customs and Border Protection. Assistant U.S. Attorneys David A. Lindenmuth and Alexandro Benavides are prosecuting the case.
Memphian Sentenced to Federal Imprisonment for $2.8 Million Federal Benefit Fraud SchemeRead the Press Release
Memphis, TN – A Memphis man who masterminded a federal benefit fraud scheme that cost the government approximately $2.8 million has been sentenced to 37 months in federal prison. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentencing today.
From October 2011 to December 2013, Remark Chism, 35, defrauded two public assistance programs: Supplemental Nutrition Assistance Program (SNAP) benefits and Child Care Certificate Program.
Chism, along with co-conspirators, recruited multiple SNAP recipients willing to sell their allotted benefits for amounts less than face value. The benefits were redeemed through Maxi Foods, a grocery store owned by Chism, for full monetary value. More than $1.9 million in SNAP benefits were unlawfully redeemed for cash over the two-year period.
SNAP (formerly known as Food Stamps) is a program designed to help low- and middle-income families purchase food. A SNAP beneficiary is provided a designated amount of funding each month via a rechargeable Electronic Benefits Transfer (EBT) card. Cardholders are able to use the allotted funding to purchase eligible food items at authorized retailers. Maxi Foods possessed a SNAP EBT card system, enabling SNAP beneficiaries to pay for eligible food items with their EBT card.
Chism also masterminded a scheme to defraud the Certificate Program, which provides federal funding to assist underprivileged families with child care costs, from October 2011 to December 2013. Chism, along with co-conspirators, paid cash to parents who qualified for Certificate Program benefits in exchange for use of their child care certificates. After acquiring the information, Chism would falsely report the children’s attendance at his daycare center, K.A.R.E. 3 Enrichment Center, and receive reimbursement for care.
The loss to the Certificate Program through K.A.R.E. is estimated at more than $986,000 over the two-year period.
In June 2015, Chism pled guilty today to one count of conspiracy to commit SNAP benefit fraud, one count of conspiracy to commit child care benefit fraud, and one count of false statements.
On Wednesday, October 28th, Judge Samuel H. Mays sentenced Chism to 37 months in prison on each of the counts. The prison terms will be served concurrently. Chism was also ordered to pay more than $2.8 million dollars in restitution.
This investigation was conducted by the United States Department of Agriculture Office of the Inspector General; United States Secret Service; United States Marshals Service; Memphis Police Department Organized Crime Unit; and the Tennessee Department of Human Services.
Assistant U.S. Attorneys Larry Laurenzi and Debra Ireland prosecuted the case on the government’s behalf.
Maryland man convicted of heroin traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – LaQuan Johnson, 35, of Baltimore, Maryland, was convicted of heroin trafficking in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Johnson sold heroin in April 2014 in Berkeley County, West Virginia. He pled guilty to one count of “Distribution of Heroin.” As a result of his guilty plea, Johnson will be sentenced to 180 months in prison.
Johnson was charged in a 6-count superseding indictment in April 2015. The indictment alleged various heroin and cocaine trafficking offenses. One count of the indictment specifically indicated that Johnson sold heroin containing fentanyl, a powerful painkiller, in Berkeley County, West Virginia in June 2014 which led to the death and serious bodily injury of another individual.
Assistant U.S. Attorneys Paul Camilletti, Robert McWilliams, and Anna Krasinski prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.Chief U.S. District Judge Gina M. Groh presided.
Marion County, WV man convicted of cocaine traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Michael T. Figueroa, Jr., 28, of Fairmont, West Virginia, was convicted of cocaine trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Figueroa sold cocaine base in January 2015 in Marion County, West Virginia. He pled guilty today to one count of “Distribution of Cocaine Base.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Manhattan U.S. Attorney, DEA New York Special Agent in Charge, New York County District Attorney, and Rockland County District Attorney Launch Prescription Drug Abuse Prevention Public Service AnnouncementsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York; James J. Hunt, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration; Cyrus Vance, Jr., the New York County District Attorney; and Thomas Zugibe, the Rockland County District Attorney, announced today the release of two public service announcements addressing the dangers of prescription drug abuse and how parents can keep their children safe.
According to the Centers for Disease Control, 46 people die each day from an overdose of prescription painkillers in the United States. The rate of prescription painkiller overdoses has more than quadrupled since 1999 and is now the leading cause of injury death, causing more deaths than motor vehicle traffic accidents annually.
Teens and young adults, who mistakenly believe prescription drugs are safer than illicit drugs, are abusing pills at an alarming rate. One in four teens has misused or abused a prescription drug at least once in their lifetime, a 33 percent increase since 2008.
The increase in the use of prescription drugs has also led to an explosion of heroin abuse. The recent national heroin abuse rate is 19 times higher among those who reported prior use of prescription pain relievers than among those who did not report such use. And four out of every five people who try heroin for the first time admit to having abused prescription pain relievers first.
Here in New York State, young adults are seeking treatment for opioid and heroin addiction at historic rates. The number of people who sought treatment increased 136 percent from 2004 to 2013. In particular, upstate New York, with a 222 percent increase in admissions, and Long Island, with a 242 percent increase, have been hard-hit by this problem.
The PSAs released today provide tips on how parents can dispose of prescription drugs safely, since the home medicine cabinet is the number-one source of prescription pills for teens and young adults.
The PSAs can be found here: http://www.justice.gov/usao-sdny. Media requesting a high resolution version can contact the U.S. Attorney’s Office of Public Affairs.
Manhattan U.S. Attorney Announces Criminal and Civil Charges Against Pharmacist, Two Pharmacies, and Two Other Individuals for Multimillion-Dollar Oxycodone Distribution SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), Thomas E. Bishop, Acting Special Agent in Charge of the New York Office of Internal Revenue Service – Criminal Investigation (“IRS-CI”), and Scott J. Lampert, the Special Agent in Charge for the New York Regional Office of the Department of Health and Human Services - Office of Inspector General (“HHS-OIG”), announced the unsealing of an indictment today against three individuals and two pharmacies for a multimillion-dollar oxycodone distribution scheme that flooded New York City with illegal controlled substances through pharmacies operated in Brooklyn and Queens. Defendants LILIAN JAKACKI, a/k/a/ “Lilian Wieckowski” (“WIECKOWSKI”), MARCIN JAKACKI, a/k/a “Martin,” ROBERT CYBULSKI, EUROPEAN APOTHECARY, INC., d/b/a “Chopin Chemists,” and MW&W GLOBAL ENTERPRISES, INC., d/b/a “Chopin Chemists,” are charged with illegally distributing more than 500,000 pills of oxycodone over a five-year period with a street value between $10 million and $15 million. The defendants are also charged with money laundering and health care fraud.
The defendants were arrested yesterday and are expected to be presented before U.S. Magistrate Judge James C. Francis IV. These arrests are the product of coordinated civil and criminal investigations that also resulted in the simultaneous filing today of a civil lawsuit against WIECKOWSKI, EUROPEAN APOTHECARY, INC., and MW&W GLOBAL ENTERPRISES, INC., that seeks millions of dollars in civil penalties and damages for violations of the Controlled Substances Act (“CSA”) and the False Claims Act (“FCA”).
Manhattan U.S. Attorney Preet Bharara said: “The defendants and pharmacies charged today allegedly were part of one the largest opioid painkiller diversion schemes ever uncovered in New York. As alleged, they flooded the city with over half a million illegally diverted oxycodone pills based on obviously fake prescriptions or no prescription at all, helping fuel the growing crisis of prescription pill abuse. Whether it is the corrupt doctor writing unwarranted prescriptions; the greedy pharmacist selling pills based on fake or no prescriptions; or the street-level drug dealer peddling painkillers directly to the addicted, we must confront this escalating epidemic at every level. Our actions today show that we and our law enforcement partners are committed to doing just that.”
DEA Special Agent in Charge James Hunt said: “During the same time that nearly two million Americans either abused or were dependent on opioid painkillers, Chopin Pharmacy was making a killing off the profit of illicit oxycodone sales. This two-year investigation uncovered a massive pill mill operating under the guise of ‘mom and pop’ pharmacies in Brooklyn and Queens. Using resources from numerous law enforcement agencies, the three defendants arrested today all face drug distribution charges, two face additional money laundering charges, and Wieckowski faces further Medicare fraud charges.”
IRS Acting Special Agent in Charge Thomas Bishop said: “As the law enforcement arm of the Internal Revenue Service, IRS-Criminal Investigation is responsible for investigating criminal tax fraud and related financial crimes, including money laundering. IRS-Criminal Investigation remains committed to the investigation of those who illegally traffic in prescription drugs. Any profitable illegal drug organization depends on the laundering of illegal proceeds in order to remain successful and to operate undetected by law enforcement. We are proud of our proven track record of using financial investigations to dismantle such organizations. We also remain committed to protecting publicly funded programs, like Medicare, and we will use our investigative authority accordingly to combat healthcare fraud.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Abuse of prescription drugs kills more people than illegal drug use and wastes millions of taxpayers’ dollars. HHS-OIG, along with our law enforcement partners, will continue to investigate those accused of contributing to America's prescription drug fraud epidemic.”
According to the allegations in the Indictment and the civil Complaint[1]:
WIECKOWSKI is the owner of EUROPEAN APOTHECARY, INC., a pharmacy that conducts business in Queens, New York, as Chopin Chemists (“Chopin Queens”). WIECKOWSKI also owns MW&W GLOBAL ENTERPRISES, INC., a pharmacy that conducted business as Chopin Chemists in Brooklyn, New York, until it was sold by WIECKOWSKI in 2014 (“Chopin Brooklyn,” and collectively the “Chopin Pharmacies”). All three individual defendants, along with the Chopin Pharmacies, are charged with conspiracy to distribute narcotics. WIECKOWSKI and JAKACKI are also charged with laundering the proceeds of their illegal narcotics business. WIECKOWSKI is also charged with a conspiracy to misbrand prescription drugs and a separate offense of defrauding Medicare out of more than $750,000 by claiming reimbursements for medicine she never actually dispensed.
As measured by the sheer quantity of pills distributed, the defendants’ oxycodone ring is one of the largest illegal diversions of oxycodone pills ever uncovered in a New York State pharmacy.
In 2013, WIECKOWSKI’S Chopin Brooklyn was the single largest purchaser of oxycodone pills in its zip code for three straight years, from 2010 to 2012. In 2011 and 2012, for example, Chopin Brooklyn exceeded the second highest purchaser’s orders in that zip code by more than 240,000 pills each year. In 2013, the DEA conducted an audit of Chopin Brooklyn that revealed more than 400,000 pills were dispensed without prescriptions. WIECKOWSKI and the Chopin Pharmacies also illegally diverted more than 160,000 additional pills by accepting 1,300 fraudulent prescriptions at both locations, including prescriptions made out in the names of famous luxury brands such as “Coach” or “Chanel.”
JAKACKI, WIECKOWSKI’s husband, helped to arrange the illegal sales of oxycodone pills. In September and October 2015, JAKACKI coordinated the illegal sale of hundreds of oxycodone pills to a DEA undercover agent at the Chopin Queens location.
CYBULSKI was one of the largest purchasers of illegal oxycodone from WIECKOWKSI at Chopin Brooklyn. While WIECOWSKI owned it, CYBULSKI regularly visited Chopin Brooklyn with multiple prescriptions in others’ names, typically obtaining 500 30-milligram oxycodone pills each time. In total, CYBULSKI illegally obtained tens of thousands of oxycodone pills from Chopin Brooklyn.
WIECKOWSKI and JAKACKI also conspired with others to launder hundreds of thousands of dollars in cash proceeds derived from the illegal oxycodone scheme. Among other things, WIECKOWSKI and JAKACKI transferred money between various bank accounts in the form of structured financial transactions. Among other things, WIECKOWSKI and JAKACKI purchased a $2 million home in Greenwich, Connecticut, using the proceeds of their illegal oxycodone distribution scheme.
WIECKOWSKI and Chopin Brooklyn also conspired to defraud the federally funded Medicare program by submitting false requests for reimbursement for expensive medications that were never dispensed by the Chopin Pharmacies. From 2010 to 2014, Medicare reimbursed Chopin Brooklyn for more than $750,000 in claims for prescription medications that were not purchased or dispensed by WIECKOWSKI or Chopin Brooklyn. WIECKOWSKI used a portion of the money from the federal Medicare program to purchase additional oxycodone pills for the illegal diversion scheme.
WIECKOWSKI is also charged with purchasing prescription medications from the black market at a deep discount from the prices legitimate suppliers typically charge, and then re-selling these drugs at Chopin Brooklyn.
WIECKOWSKI, 49, of Greenwich, Connecticut, is charged with one count of conspiracy to distribute and possess with the intent to distribute oxycodone illegally, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit health care fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; two counts of money laundering, each which carry a maximum sentence of 20 years in prison; and one count of conspiracy to misbrand prescription medication, which carries a maximum sentence of 5 years in prison.
JAKACKI, 35, of Greenwich, Connecticut, is charged with one count of conspiracy to distribute and possess with the intent to distribute oxycodone illegally, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 in prison; and one count of money laundering, which carries a maximum sentence of 20 years in prison.
CYBULSKI, 30, Staten Island, New York, is charged with one count of conspiracy to distribute and possess with the intent to distribute oxycodone illegally, which carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. The criminal case has been assigned to U.S. District Judge Jed S. Rakoff.
Mr. Bharara praised the outstanding investigative work of the DEA’s New York Division Diversion Group D62, the DEA Tactical Diversion Squad, the U.S. Internal Revenue Service, and the U.S. Department of Health and Human Services. The DEA’s Tactical Diversion Group includes agents and officers of the DEA, the New York City Police Department, the New York State Police, Town of Orangetown Police Department, and Westchester County Police Department.
The criminal case is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Sidhardha Kamaraju and Louis A. Pellegrino are in charge of the prosecution.
The civil case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorney Louis A. Pellegrino is in charge of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the texts of the Indictment and Complaint and the descriptions of each set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Man Pleads Guilty to Selling Home-Slaughtered PoultryRead the Press Release
PITTSBURGH - A Pittsburgh resident pleaded guilty in federal court to a charge of transporting poultry without inspection, United States Attorney David J. Hickton announced today.
Xia Vue, 84, of Pittsburgh, PA, pleaded guilty to one count before Senior United States District Judge Maurice B. Cohill.
In connection with the guilty plea, the court was advised that Vue had been slaughtering poultry at a dilapidated residential home and was selling the poultry in commerce to retail markets and individual customers. The poultry products sold by the defendant had not been inspected by the United States Department of Agriculture, as required by law.
Judge Cohill scheduled sentencing for Feb. 18, 2016. The law provides for a total sentence of one year in prison, a fine of $1000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant on bond.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The United States Department of Agriculture, Office of the Inspector General conducted the investigation that led to the prosecution of Xia Vue.
Luzerne County Man Sentenced to 37 Months in Prison for Bath Salts ConspiracyRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 30-year-old Larksville man was sentenced today to 37 months in prison by U.S. District Court Judge Malachy E. Mannion in Scranton, for conspiring with others to distribute and possess with intent to distribute alpha-pvp, commonly known as “bath salts.”
According to United States Attorney Peter Smith, the defendant, John Pearce, previously admitted to participating in the conspiracy which distributed alpha-pvp to customers during December 2011 through August 2013.
Pearce was indicted by a federal grand jury in August 2014, as a result of an investigation by Homeland Security Investigations (HSI), the Drug Enforcement Administration, United States Postal Inspectors, the Pennsylvania State Police, and West Pittston Police. All eleven defendants charged in the case have entered guilty pleas, including the principal distributors from West Pittston, Pennsylvania, and their suppliers from Texas.
Judge Mannion also ordered that Pearce serve three years on supervised release following his prison sentence.
Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
# # #
Long Island Fisherman Sentenced to Prison Time and Pay More Than $600,000 for Fisheries FraudRead the Press Release
Anthony Joseph, a commercial fisherman from Levittown, New York, was sentenced today in federal court in Central Islip, New York, to seven months in prison for federal violations stemming from his role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.
Joseph was also sentenced to three years of supervised release following his incarceration and to pay $603,000 in restitution.
Joseph, the former operator of the dragger F/V Stirs One, pleaded guilty on April 11, 2014, to one count of mail fraud, two counts of wire fraud and one count of falsification of federal records for knowingly submitting 158 falsified fishing logs, known as fishing vessel trip reports (FVTRs) and aiding and abetting the submission of 167 falsified dealer reports from June 2009 through December 2011, as part of a scheme to defraud the United States of overharvested and underreported fluke.
Under the National Oceanic and Atmospheric Administration’s (NOAA) regulations, all of the Stirs One’s catch had to be reported to NOAA on FVTRs. During the years 2009, 2010 and 2011, the Stirs One principally targeted fluke. However, under the captaincy and with the knowledge of Joseph, the vessel exceeded its relevant federal and New York State quotas for fluke for at least 158 trips. These illegal overages totaled 302,000 pounds of fluke worth approximately $626,000.
In order to cover up the illegal fluke harvesting, Joseph falsified the FVTRs that he personally mailed to NOAA. He also utilized the exempted fisheries permit quota that was acquired through the federal RSA Program as a mask for his fluke overages. According to court documents, the defendant characterized the RSA Program as “a license to steal” and remarked that during the period of 2009 to 2011, he referred to the Research Set-Aside Program with the nickname, “Research Steal-Aside.”
NOAA regulations also required the first purchasers of seafood, i.e., directly from the fishing vessel, to report their purchases to NOAA on an electronic form known as a dealer report. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price and weight. NOAA utilizes the data in the dealer reports to set quotas and implement other management measures designed to ensure a sustainable fisheries. The dealer reports also serve as a check on the information that is submitted in FVTRs. In other words, in order to effectuate his scheme, Joseph needed to ensure that corresponding false dealer reports were being submitted that contained the same false information as was contained on the falsified FVTRs. A mismatch would have indicated a serious error or fraud, and would have been a red flag for fisheries managers. Accordingly, during June 2009 to December 2011, the defendant schemed with two other fish dealers to submit false dealer reports in furtherance of the fraud. In doing so, the defendant aided and abetted previously convicted Alan Dresner and Jones Inlet Seafood Company in their internet submission of a total of at least 167 false dealer reports from computers in New York to NOAA’s Regional Fisheries Office in Gloucester, Massachusetts.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environment and Natural Resources Division’s Environmental Crimes Section.
Leader of Rx Pill Ring Sentenced to 10 Years in Federal PrisonRead the Press Release
PITTSBURGH – A man imprisoned in Michigan has been sentenced in federal court to 10 years imprisonment and three years supervised release, on his conviction of violating the federal narcotics laws, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Telano White, 33, of Jackson, Michigan.
According to information presented to the court, Telano White was the leader of the Detroit to Pittsburgh oxycodone distribution network, even though he was incarcerated for nearly the entire period of the conspiracy. White’s wife, Brandy Bara White, received deliveries of oxycodone 30 mg. pills delivered by Tarrance Mays, Jr. and LaMont Whitfield, two Detroit residents who previously pleaded guilty for their roles in the conspiracy.
Prior to imposing sentence, Judge Fischer stated that White has admitted to being the leader of the oxycodone ring that brought large quantities of pills from Detroit to Pittsburgh. She said that it was an “affront to the justice system” that he orchestrated the criminal activity from jail.
Assistant United States Attorney Stephen R. Kaufman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Drug Enforcement Administration, Federal Bureau of Investigation, Pennsylvania Attorney General’s Office, Pennsylvania State Police and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of White.
Leader of Multi-Million Dollar Heroin Trafficking Organization Sentenced to PrisonRead the Press Release
BOSTON – A leader of a Lawrence heroin trafficking organization that operated in Massachusetts and New York was sentenced today to 13 years in federal prison.
Ygoa Almonte-Baez, 48, of Dorchester, Mass., and the Bronx, N.Y., was sentenced by U.S. District Court Judge Rya W. Zobel to 13 years in prison, five years of supervised release and ordered to forfeit $2 million. In June 2015, Almonte-Baez was convicted by a federal jury for one count of conspiracy to possess with intent to distribute and to distribute heroin and one count of possession with intent to distribute heroin.
On July 26, 2013, federal agents raided Almonte-Baez’s stash house in Lawrence and seized over 21 kilograms of highly pure heroin. Agents also found digital scales, grinders, cutting agents and other tools used for processing and packaging heroin for distribution. Almonte-Baez recorded the sales and related payments for his heroin business in ledgers that showed millions of dollars in heroin sales in 2013 alone. The same day that agents arrested Almonte-Baez, they also seized over $372,000 in drug proceeds from a courier who testified at trial that he worked for Almonte-Baez picking up tens of thousands of dollars at a time from wholesale heroin customers.
According to the charging statutes, the judge was legally required to impose a mandatory minimum sentence of 10 years in prison. Prosecutors sought a lengthier sentence arguing that the 21 kilograms of heroin agents seized from Almonte-Baez was only a small portion of what his organization distributed. Furthermore, it was of such high purity that it likely would have been diluted by a factor of three before begin distributed in street-level transactions, amounting to approximately 120,000 dosage units.
This case was prosecuted as part of the federal response to New England’s opioid crisis. A substantial increase in the purity of heroin in recent years, as well as a reduction in its price, has persuaded many individuals addicted to prescription medication to switch to heroin. Overdoses from heroin have climbed substantially as a result.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Essex County Sheriff Frank G. Cousins, Jr.; and Lawrence Police Chief James X. Fitzpatrick, made the announcement today. The case was investigated by the DEA’s Cross Borders Initiative and prosecuted by Assistant U.S. Attorneys David D’Addio and Susan Winkler.
Law Enforcement and Service Providers Partner to Address Domestic ViolenceRead the Press Release
CEDAR RAPIDS, IOWA – October is National Domestic Violence Awareness month as proclaimed by Presidential Proclamation. Domestic violence statistics are alarming. Nearly one in four women and one in seven men have suffered severe physical violence by an intimate partner. Besides the physical violence endured, victims are often deprived of basic liberties, lose their autonomy and almost daily face threats to their health, safety and security. October is dedicated to reaffirming America’s commitment to ensuring that no one suffers the hurt and hardship that domestic violence brings.
To reaffirm this commitment, local and federal law enforcement agencies joined area domestic abuse service providers today at Waypoint Services to discuss, among other things, the federal laws that can be used to combat domestic violence in an effort to raise public awareness to the issue.
United States Attorney Kevin W. Techau stated, “Domestic violence continues to devastate the lives of Iowans across the state. Experience tells us that the severity of such crimes frequently escalates over time, sometimes with deadly results. It is crucial for victims of domestic abuse to receive protection and assistance from law enforcement agencies and community organizations. The United States Attorney's Office has and will work shoulder to shoulder with our law enforcement and community partners to help ensure all Iowans are safe in their homes and communities.”
Joining in this meeting and the press conference that followed were representatives from the Cedar Rapids and Marion Police Departments, Linn County Sheriff’s and County Attorney’s Offices, and several domestic abuse service providers and homeless shelters, including: Waypoint’s Domestic Violence Victim Services Program, Cedar Valley Friends of the Family Victim Shelter Program, Amani Culturally Specific Services for African Americans, Madge Phillips Center, Willis Dady Shelter, and the Catholic Worker House.
Domestic violence can result in physical injury, psychological trauma, and in severe cases, even death. The devastating physical, emotional, and psychological consequences of domestic violence can cross generations and last a lifetime. Area service providers are key partners.
Tara Beck, Director of Waypoint’s Domestic Violence Victim Services Program stated, “Waypoint’s Domestic Violence Victim Services Program continues to support upwards of 2000 victims of domestic violence every year. Many of the individuals we support face very real threats of serious injury or death. Community awareness about the dynamics of domestic violence, services available, and potential legal remedies is crucial in helping to create greater safety for victims and accountability for offenders.”
The Cedar Rapids Police Department worked closely with Cedar Valley Friends of the Family, the Linn County Attorney’s Office and other law enforcement representatives to initiate the use of an assessment tool when responding to abuse complaints. Federal funding was secured to train responders how to assess a victim’s safety level when responding to domestic disturbances. A questionnaire will be used by responding officers as one tool to assess the circumstances. A series of questions will be asked of the alleged victim to aid in making an appropriate service referral to protect them from future harm. Chief Wayne Jerman added, “We are recommitted to prevention and response efforts and to holding accountable all alleged abusers.”
Linn County Attorney Jerry Vander Sanden added that his office prosecutes approximately 500 domestic violence related cases each year. “Many of our victims report that their abuse is not an isolated incident and that they have been enduring abuse for some time. We recognize the seriousness of these offenses and know that all too often the degree of the abuse escalates, sometimes even ending in death.” Vander Sanden added, “In the last 18 months there have been six homicides in Linn County alone that have arisen out of domestic relationships. We have to respect our victims, understand why reporting domestic violence is so difficult for some and why it is difficult in some cases for our victims to cooperate with the prosecution of these domestic abuse offenses. It is our job to get justice for these people and send the message that domestic violence will not be tolerated. The home is the last place a person should feel unsafe.”
Assisting victims of abuse with futures is equally important. The Iowa Coalition Against Domestic Abuse (ICADV) is offering 35 survivors of domestic abuse the opportunity to change their futures. The Alice Barton Scholarship Program will grant $1,000 scholarships to be used towards tuition, books, supplies, childcare or housing. The Program works to empower survivors of domestic violence through education and job training. “Abuse wreaks havoc on a survivor's life. Receiving an education is one way to start putting the pieces back together,” stated Elizabeth Albright Battles, Administrator of the scholarship program for ICADV. She also noted, “A survivor has an opportunity to see themselves in a new light, learn new skills, and meet new, supportive people. Through the Alice Barton Scholarship, we hope to encourage more survivors to follow their dreams.” Learn more about this program by emailing Elizabeth Albright Battles at [email protected], or by calling 515-244-8028.
Follow us on Twitter @USAO_NDIA.
Lafayette man sentenced to 24 months in prison for possessing stolen firearmRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Lafayette man was sentenced Wednesday to 24 months in prison for possessing a stolen handgun.
Cordera Dean Felix, 28, of Lafayette, was sentenced by U.S. District Judge Richard T. Haik on one count of possession of a stolen firearm. He was also sentenced to one year of supervised release. According to evidence presented at the June 24, 2015 guilty plea, Lafayette Police arrested Felix on June 27, 2014, near the 900 block of East Simcoe Street on an active warrant. Officers recovered a Glock model 36, .45 caliber pistol from Felix. He stated that he was approached by juveniles who showed him a bag containing approximately eight handguns. He purchased the .45 caliber pistol from them. The handgun was reported stolen from Dave’s Gun Shop in Lafayette.
This case is part of Project Safe Neighborhoods, which is a Department of Justice initiative designed to reduce firearm crimes by removing dangerous and persistent felons from the community and promote firearm safety.
The ATF and the Lafayette Police Department conducted the investigation. Assistant U.S. Attorney Dominic A. Rossetti prosecuted the case.
Justice Department Settles with Colorado Youth Wrestling League to Prevent Disability DiscriminationRead the Press Release
The Justice Department announced today that it reached a settlement with the operators of Pikes Peak Wrestling League, a youth wrestling league that serves approximately 4,000 children across the state of Colorado, under the Americans with Disabilities Act (ADA). The settlement resolves allegations that Pikes Peak Youth Sports Association LLC and Peak Youth Sports Association violated the ADA by failing to modify their policies, practices or procedures to allow a child who has dwarfism to “play down” one age division at the 2014 Colorado State Wrestling Championship so that he could compete with wrestlers closer to his weight and size. The agreement was filed today as a proposed consent decree, which must be approved by the U.S. District Court for the District of Colorado, along with a complaint.
Under the agreement, the wrestling league will adopt and publicize a disability nondiscrimination policy, including procedures for handling requests to modify policies for wrestlers with disabilities. The league will train employees on ADA requirements and invite coaches affiliated with Pikes Peak Wrestling League and USA Wrestling Directors to attend this training, free of charge. In addition, the wrestling league will pay compensatory damages to the child identified in the complaint and report to the department on its compliance with the agreement.
“Participating in athletic competition is a formative experience for children across this country, and children with disabilities are entitled to participate equally in youth sports,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “The ADA celebrated its 25th anniversary this year and private entities that operate youth athletics should be well aware of their obligations under the ADA.”
Title III of the ADA requires public accommodations, including youth sports leagues like Pikes Peak Wrestling League, to reasonably modify their policies, practices or procedures, when such modifications are necessary to afford their goods, services, facilities, privileges, advantages or accommodations to individuals with disabilities and when such modifications would not fundamentally alter the nature of their goods, services, facilities, privileges, advantages or accommodations. For more information about the ADA, call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
The relevant court documents can be found at the following links: complaint and consent decree.
Justice Department Announces Four Banks Reach Resolutions Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Luzerner Kantonalbank AG (Luzerner), Habib Bank AG Zurich (HBZ), Banque Heritage S.A. and Hyposwiss Private Bank Genève S.A. (Hyposwiss Geneva) have reached resolutions under the department’s Swiss Bank Program. These banks will collectively pay penalties totaling more than $25 million and continue to cooperate with the department.
“With each agreement executed under the Swiss Bank Program, the department continues to eradicate Swiss bank secrecy and hold accountable those financial institutions that profited from willfully assisting accountholders in the evasion of their U.S. tax obligations,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Working with our partners at the Internal Revenue Service, we are following leads and pursuing criminal and civil investigations focused on targets around the globe.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
-
Make a complete disclosure of their cross-border activities;
-
Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
-
Cooperate in treaty requests for account information;
-
Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
-
Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
-
Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.
Luzerner was established in 1850 by the Canton of Lucerne, a sovereign political subdivision of the Swiss Confederation. Luzerner was aware that U.S. taxpayers had a legal duty to report to the Internal Revenue Service (IRS) and pay taxes on the basis of all their income, including income earned in accounts that the U.S. taxpayers maintained at Luzerner. Luzerner knew or had reason to know that it was likely some taxpayers who maintained accounts at Luzerner were not complying with their U.S. tax and reporting obligations.
Luzerner offered a variety of traditional Swiss banking services that it knew could assist, and did assist, U.S. taxpayers in concealing their identity from the IRS by minimizing the paper trail associated with their undeclared assets and income. These services included hold mail and numbered accounts. Luzerner also opened and maintained accounts held in the name of non-U.S. corporations, foundations or other entities, while knowing, or having reason to know, that a U.S. taxpayer ultimately held an interest in these non-U.S. entities. In at least six cases, these structured accounts were established in the names of entities set up in Panama, Seychelles and the British Virgin Islands by two Swiss-based advisory companies.
Luzerner maintained 115 U.S.-related accounts for insurance carriers, commonly called insurance-wrapped accounts, as to which Luzerner was aware that the policy holder or premium payer was a U.S. person. These accounts titled in the name of an insurance carrier, but are funded with bankable assets transferred to the account by the beneficial owner of the policy. The insurance carriers, at Luzerner’s request, provided Luzerner with the identities of the beneficial owners of these policies. The assets in the account, while titled in the name of the insurance carrier, were managed by the external asset manager for the beneficial owner through a power of attorney given by the insurance carrier.
Nearly all of these insurance-wrapped accounts were managed by a single external asset manager. In an e-mail sent to the head of the private banking department in December 2007, the head of the external asset manager desk at Luzerner described that external asset manager as “[specializing] in aspects of legal asset protection as well as tax optimization and has approx. CHF 750 million [Swiss francs] in assets under management, in particular in life insurances. Its main clients include wealthy U.S. nationals (doctors, lawyers, etc.).” Luzerner knew or had reason to know that U.S. citizens, residents and others obligated to pay U.S. taxes who contributed the assets to the insurance-wrapped accounts sought to conceal their ownership of those and also to evade their U.S. federal income tax obligations.
Since Aug. 1, 2008, Luzerner held a total of 595 U.S.-related accounts, which amounted to approximately $300 million. Luzerner will pay a penalty of $11.031 million.
HBZ primarily serves South Asian commercial businesses and entrepreneurs, and their families. In 1941, Habib Bank Ltd. (HBL), the predecessor to HBZ, was founded in Bombay (now Mumbai), India. In 1967, the founders of HBL founded HBZ as a stand-alone entity in Switzerland. In 1974, Pakistan nationalized HBL and all of its subsidiaries and overseas branches. Following the nationalization of HBL, the founders of HBZ rebuilt a global banking business independent of HBL. HBZ has branches and subsidiaries in Canada, Hong Kong, the Isle of Man, Kenya, Pakistan, South Africa, Switzerland, the United Arab Emirates and the United Kingdom.
The HBZ Swiss Office has local management, a local banking team and a client base with accounts held in Switzerland that is distinct from, and tracked and managed separately from, the HBZ operations in other jurisdictions. The HBZ Swiss Office assisted or otherwise facilitated U.S. clients in establishing and maintaining undeclared accounts in a manner that the HBZ Swiss Office knew or should have known was designed to conceal the U.S. clients’ ownership or beneficial interest in the accounts.
Employees of Habib American Bank, Inc. (HAB), an unrelated bank with common ownership, introduced or referred U.S. persons to the HBZ Swiss Office. HBZ has identified one account opened at the HBZ Swiss Office for a U.S. person as a result of a referral from HAB. HBZ and HAB are owned through separate legal structures for the benefit of members of the same extended family.
In connection with one relationship, the HBZ Swiss Office assisted with creating four Liechtenstein “Anstalts” or entities with U.S. beneficial owners. A Liechtenstein law firm structured and managed these entities. This Liechtenstein law firm served as the nominee, director and signatory authority of these accounts. The HBZ Swiss Office knew or should have known that these entities were created with an intention of masking U.S. ownership. The HBZ Swiss Office further facilitated the transfer of the funds from these accounts to HBZ Finance Limited, Hong Kong.
In connection with closing U.S.-related accounts, the HBZ Swiss Office permitted certain U.S. clients to transfer funds to accounts held at other HBZ branches and subsidiaries, or to other accounts at the HBZ Swiss Office, either knowing or when it should have known that such transfers were motivated by a desire to avoid U.S. tax or information reporting requirements.
Since Aug. 1, 2008, HBZ had 125 U.S.-related accounts, comprising approximately $118.9 million in assets under management. HBZ will pay a penalty of $9.4 million.
Banque Heritage is a private bank headquartered in Geneva. It was founded in 1986 as an asset management firm and obtained its Swiss banking license in 2003. Banque Heritage has a branch in Zurich, a representative office in Lugano, Switzerland, and a fully licensed banking operation in Uruguay. It also had an investment advisory company in Guernsey, which was closed in 2014.
Banque Heritage offered hold mail and opened accounts in the names of offshore structures. Since Aug. 1, 2008, Banque Heritage had 47 U.S.-related accounts with U.S. beneficial owners that were held by entities created in Panama, the British Virgin Islands, Hong Kong, Belize or other foreign countries.
Banque Heritage established banking relationships with U.S. taxpayers who were transferring funds from other Swiss financial institutions that were closing such accounts. In at least seven such instances, comprising at least $10 million, Banque Heritage knew, or had reason to know, that the accounts were or may have been undeclared. Banque Heritage also:
-
Transferred the beneficial ownership of some U.S. taxpayers’ accounts to non-U.S. persons’ accounts at Banque Heritage; and
-
Facilitated the transfer, to Banque Heritage’s affiliate in Uruguay, of approximately $700,000 held in at least two U.S.-related accounts being closed at Banque Heritage, when it knew or had reason to know that these accounts were undeclared.
In May 2001, Banque Heritage entered into a Qualified Intermediary (QI) Agreement with the IRS and required all clients to sign a declaration confirming whether the client was a U.S. national or U.S. resident. Banque Heritage also asked U.S. nationals and U.S. residents to provide an IRS Form W-9. Prior to May 2009, Banque Heritage’s position was that it could service a U.S. client without reporting the U.S. taxpayer’s interest in the account to the IRS so long as it either prohibited the accountholder from trading in U.S.-based securities or the account was nominally structured in the name of a non-U.S.-based entity accompanied by an IRS Form W-8BEN or a Bank Non-U.S. Status Declaration. In the latter circumstance, U.S. clients, with the assistance of their advisors, would create an entity, such as a Panama corporation or a British Virgin Islands company, and pay a fee to third parties to act as corporate directors. Those third parties, at the direction of the U.S. client, would then open a bank account at Banque Heritage in the name of the entity or transfer a pre-existing Swiss bank account from another Swiss bank.
In cases involving a non-U.S. entity, Banque Heritage was aware that a U.S. client was the true beneficial owner of the account and would receive from the entity’s directors an IRS Form W-8BEN or equivalent bank document that falsely declared that the beneficial owner was not a U.S. taxpayer. Knowing that it was probable that certain U.S. taxpayers were not complying with their U.S. income tax and reporting obligations, Banque Heritage effectively provided assistance to certain U.S. taxpayers in evading their U.S. tax obligations, and permitted three accounts to trade in U.S. securities without reporting account earnings or transmitting any withholding taxes to the IRS, as required by the QI Agreement.
Since Aug. 1, 2008, Banque Heritage had 131 U.S.-related accounts with an aggregate maximum balance of approximately $198 million. Banque Heritage will pay a penalty of $3.846 million.
Hyposwiss Geneva is a private bank based in Geneva that was founded in 1997 as Marcuard Cook & Cie S.A. Hyposwiss Geneva was acquired by Anglo Irish Bank Corporation Ltd. in 2001 and then by St. Galler Kantonalbank AG, a Category 2 bank in the Swiss Bank Program, in early 2008. St. Galler Kantonalbank AG announced in June 2013 that it was divesting Hyposwiss Geneva and that Mirelis InvesTrust S.A. would become the new shareholders of Hyposwiss Geneva at the beginning of 2014.
Hyposwiss Geneva opened, serviced and profited from accounts for U.S. clients who Hyposwiss Geneva knew or had reason to know were not complying with their U.S. income tax obligations. In addition to offering the traditional Swiss banking services of hold mail and accounts with code names or numbers, Hyposwiss Geneva accepted instructions in connection with at least 22 U.S.-related accounts not to invest in U.S. securities and not to disclose the names of U.S. clients to U.S. tax authorities, including the IRS. Hyposwiss Geneva assisted at least one U.S. taxpayer client in concealing his identity from the IRS by titling securities in the name of the U.S. taxpayer’s Hyposwiss Geneva relationship manager as a nominee of the U.S. taxpayer by depositing the securities in the relationship manager’s personal account with another Swiss bank. Hyposwiss Geneva also processed large cash and gold withdrawals totaling approximately $3.4 million for at least nine U.S. taxpayers at or around the time the clients’ accounts were closed, even though Hyposwiss Geneva knew, or had reason to know, the accounts contained undeclared assets.
Since Aug. 1, 2008, Hyposwiss Geneva opened and maintained at least 21 undeclared accounts in the names of structures that were beneficially owned by U.S. taxpayers, while knowing, or having reason to know, that these structures were used by U.S. clients to help conceal their identities from the IRS. One structured account was a U.S. trust, two were Swiss-based operating companies and 21 U.S.-related accounts were held by a non-U.S. structure, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their undeclared accounts from the IRS. The entities were incorporated as follows: 10 companies in the British Virgin Islands; five companies in Panama; one trust in the Cook Islands; and one each in Liberia, St. Vincent & the Grenadines, the Marshall Islands, and the Cayman Islands.
Since Aug. 1, 2008, Hyposwiss Geneva held a total of 91 U.S.-related accounts with approximately $74.9 million in assets under management. Hyposwiss Geneva will pay a penalty of $1.109 million.
In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today's settlements and the steady success of DOJ’s Swiss Bank Program continue to alter the thinking of those seeking to hide their money offshore,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International Division (LB&I). “Through these agreements, we are shining a bright light on those who sought to evade paying what they owe. U.S. taxpayers with undeclared accounts need to report their foreign accounts and pay their income taxes”
“The bank agreements announced today continue to change the paradigm of the offshore banking world and the message sent to that community should be clear,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “The days of secretly hiding funds offshore to avoid paying taxes are over. We are proud of our joint efforts and the resulting success of the program to date. Each additional agreement provides us with highly-detailed data on the accounts, schemes and linkages we need to combat international tax evasion.”
Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and the IRS LB&I Division for their substantial assistance. Ciraolo also thanked Michael N. Wilcove, Henry C. Darmstadter, John E. Sullivan, Thomas G. Voracek and Kimberle E. Dodd, who served as counsel on these matters, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
-
Illinois Man Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
A Bolingbrook, Illinois, man pleaded guilty today to a federal charge that he attempted to travel overseas to join a designated foreign terrorist organization in Syria.
The guilty plea was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division.
Mohammed Hamzah Khan, 20, pleaded guilty to one count of attempting to provide material support to a foreign terrorist organization, identified in a written plea agreement as the Islamic State of Iraq and the Levant (ISIL).
Khan, a U.S. citizen from southwest suburban Bolingbrook, faces a maximum sentence of 15 years in prison. U.S. District Judge John J. Tharp Jr. of the Northern District of Illinois did not immediately schedule a sentencing hearing. A status hearing was set for Dec. 3, 2015, at 12:30 p.m. EST.
Khan has been detained in federal custody since he was arrested on Oct. 4, 2014, at O’Hare International Airport by members of the Chicago Joint Terrorism Task Force.
According to his plea agreement, beginning no later than approximately February 2014, Khan used the Internet to obtain introductions to ISIL members in Syria and to assist him with traveling there to join the terrorist group. Khan spoke with ISIL members to coordinate the logistics of his admission into ISIL-controlled territory, the plea agreement states.
Khan also admitted in the plea agreement that he knew ISIL had been designated by the United States as a foreign terrorist organization. Upon arriving in Syria, according to the plea agreement, Khan intended to work under the direction and control of ISIL, and be required to take any assignment ISIL gave him.
The case was investigated the FBI and the Chicago Joint Terrorism Task Force. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) and the Illinois State Police also provided significant assistance in the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Matt Hiller, Angel Krull and Sean Driscoll of the Northern District of Illinois, and Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.
Mohammed Hamzah Khan Plea Agreement
Hudson County, New Jersey, Man Admits He Conspired to Provide Material Support to ISILRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man today admitted that he conspired to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division announced.
Alaa Saadeh, 24, of West New York, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiring with others to provide material support to ISIL. He remains detained without bail.
“Alaa Saadeh is the second defendant in this case who has admitted trying to provide material support to a known terrorist organization,” U.S. Attorney Fishman said. “That organization, and others who share its goals, are intent on recruiting people in this country and around the world to join their campaign against our security. The fight against these kinds of groups is going on around the world, but is also being waged here at home. They are intent on threatening the safety of Americans here and abroad, and we and our law enforcement partners are intent on stopping them.”
“Saadeh conspired with his brother and others to travel overseas to join ISIL,” Assistant Attorney General Carlin said. “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“Today in the U.S. District Court of New Jersey Alaa Saadeh admitted he planned to travel to Syria to join ISIL along with others,” FBI Newark Special Agent in Charge Richard M. Frankel said. “Now, thanks to the efforts of Newark FBI’s Joint Terrorism Task Force, Saadeh will go to prison rather than take up arms overseas.”
According to documents filed in this and related cases and statements made in court:
Saadeh admitted that prior to his arrest June 29, 2015, by the FBI Joint Terrorism Task Force (JTTF), he planned to travel overseas to join ISIL along with others. Saadeh discussed the plans to join ISIL with his brother, Nader Saadeh, Samuel Rahamin Topaz, and Munther Omar Saleh, and admitted that at various times each of them indicated that they wanted to join ISIL. Saadeh also admitted he watched ISIL-related videos with Nader Saadeh and Topaz, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.
On May 5, 2015, Saadeh’s brother, Nader Saadeh, departed the United States with plans to travel overseas to join ISIL as part of the conspiracy, according to Alaa Saadeh’s statements in court today. Saadeh admitted assisting his brother with these plans by letting him purchase airline tickets using Saadeh’s credit card and by removing the SIM card from Nader’s smartphone and resetting the smartphone in an effort to avoid detection. Saadeh admitted that Saleh assisted Nader Saadeh by giving him a contact who would facilitate Nader’s travel from Turkey to ISIL in Syria.
Saadeh admitted that after Nader Saadeh left the United States, Saleh and Topaz intended to travel overseas to join ISIL. After becoming aware the FBI was investigating this matter, Saadeh instructed an individual who knew of Nader Saadeh’s support for ISIL to lie to the FBI if the individual was interviewed. Saadeh told this individual to “just play stupid,” “pretend it never happened,” and “keep it honest up to a point.”
Saadeh admitted knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes, and executing individuals who did not obey ISIL’s commands.
The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 15 years in prison and a fine of $250,000. Sentencing is scheduled for Feb. 16, 2016.
Saadeh’s alleged conspirators are being prosecuted and are currently in federal custody. On Sept. 9, 2015, Topaz pleaded guilty before Judge Wigenton to conspiring to provide material support to ISIL. Nader Saadeh has been charged in a criminal complaint with conspiring to provide material support to ISIL, among other charges. Saleh has been indicted on terrorism-related charges brought by the U.S. Attorney’s Office for the Eastern District of New York.
The charges and allegations against Nader Saadeh and Saleh are merely accusations, and they are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman and Assistant Attorney General Carlin credited special agents of the FBI, under the direction of Special Agent in Charge Frankel in Newark, and the JTTF, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the U.S. Attorney’s Office National Security Unit in Newark, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
Defense counsel for Alaa Saadeh: Maria Noto Esq., Matawan, New Jersey
Houston Man Pleads Guilty to Conspiracy to Defraud MedicareRead the Press Release
HOUSTON - A Houston businessman has entered a guilty plea to engaging in a conspiracy to defraud Medicare of more than $6.6 million, announced U.S. Attorney Kenneth Magidson.
At a hearing held today before U.S. District Kenneth Ellison, Robert Manning, 60, admitted he participated in a three-year conspiracy to defraud Medicare by paying kickbacks to Medicare beneficiaries whose Medicare information was then used to file fraudulent claims with Medicare.
During his plea, Manning admitted that beginning in 2008 he was introduced to a Houston medical clinic manager who agreed to pay Manning per head for Medicare beneficiaries brought to the clinic. Manning, in turn, would pay the marketers who brought the beneficiaries, keeping a small portion as his fee. Manning admitted he was paid $125 per Medicare beneficiary allegedly treated at the clinic which was paid on a weekly basis. Manning paid the marketers $100 in cash per beneficiary and kept the remaining $25. On some occasions, Manning would deal directly with a Medicare beneficiary. In those instances, he would pay the beneficiary $100 in cash and again keep the remaining $25. Manning admitted he knew the Medicare billing was fraudulent because he knew that the reason “patients” were going to the clinic was because they were being paid to do so, and not because they needed a specific medical treatment.
According to the factual basis in support of the plea, the clinic billed Medicare $6.6 million for the diagnostic testing allegedly done and was paid $2.9 million.
Judge Ellison has set sentencing for Feb. 16, 2016, at which time Manning faces up to 15 years in federal prison and a possible $500,000 fine. As part of his plea, Manning has also agreed to pay restitution of $2.9 million to Medicare. He was permitted to remain on bond pending that hearing.
The criminal charges are the result of a joint investigation by the Texas Attorney General’s Office - Medicaid Fraud Control Unit, IRS - Criminal Investigation, U.S. Department of Health and Human Services - Office of Inspector General and the FBI. Assistant United States Attorneys Al Balboni and Adrienne Frazior are prosecuting the case.
Government Intervenes in Lawsuits Alleging That Skilled Nursing Chain SavaSeniorCare Provided Medically Unnecessary TherapyRead the Press Release
The government has intervened in three False Claims Act lawsuits and filed a consolidated complaint against SavaSeniorCare LLC and related entities (Sava) alleging that Sava knowingly and routinely submitted false claims to Medicare for rehabilitation therapy services that were not medically reasonable and necessary, the Department of Justice announced today. Sava is one of the nation’s largest healthcare providers, operating approximately 200 skilled nursing facilities (SNFs) in 23 states.
“The provision of Medicare benefits must be dictated by patient need, not by Medicare providers’ efforts to maximize profits by pressuring their employees to provide medically unnecessary services,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will continue to aggressively pursue companies that seek to engage in this kind of fraudulent scheme.”
The government’s complaint alleges that Sava exerted significant pressure on its SNFs to meet unrealistic financial goals that resulted in the provision of medically unreasonable, unnecessary and unskilled services to Medicare patients. Sava allegedly set these aggressive, prospective corporate targets for the highest Medicare reimbursement rates to significantly increase Sava’s revenues without regard for its patients’ actual clinical needs and then pressured its staff to meet those goals. Sava also allegedly delayed discharging patients from its facilities, even though the patients were medically ready to be discharged, in order to increase its Medicare payments.
“Enforcing the False Claims Act and combating healthcare fraud remains a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera of the Middle District of Tennessee. “When healthcare providers subject patients to unnecessary treatment, we will intervene and hold them accountable.”
The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in these cases. Under the Act, a defendant that is found liable is subject to damages equal to three times the government’s loss plus applicable penalties.
The government’s intervention in these matters illustrates its 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. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The lawsuits are being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Middle District of Tennessee. Investigative support is being provided by the U.S. Attorneys’ Offices of the Southern District of Texas and the Western District of Texas; the Offices of Inspector General for the Department of Health and Human Services and the Office of Personnel Management and the National Association of Medicaid Fraud Control Units.
The cases are captioned United States ex rel. Hayward v. SavaSeniorCare, LLC, et al., No. 3:11-0821 (M.D. Tenn.); United States ex rel. Scott v. SavaSeniorCare Administrative Services, LLC, 3:15-0404 (M.D. Tenn.); and United States ex rel. Kukoyi v. Sava Senior Care, L.L.C., et al., No. 3:15-1102 (M.D. Tenn.).
The claims asserted in the government’s complaint against Sava are allegations only and there has been no determination of liability.