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16 December 2015
President of Commodities Trading Pool Sentenced in Manhattan Federal Court for Misappropriating Hundreds of Thousands of Dollars of Client FundsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that MICHAEL JAMES SEWARD, president of the now-defunct, unregistered commodities trading pool SK Madison Commodities, LLC (“SK Madison”), was sentenced to 18 months in prison in connection with his misappropriation of approximately $1.3 million of client investor funds. SEWARD pled guilty to a conspiracy to commit securities fraud on August 7, 2015, and was sentenced today by United States District Judge Edgardo Ramos.
SEWARD’s coconspirator, Yan Kaziyev, pled guilty pursuant to a cooperation agreement on June 25, 2014, and awaits sentencing by United States District Judge Paul A. Crotty.
U.S. Attorney Preet Bharara said: “Michael Seward conspired to sweet-talk investors out of their money with promises of double-digit returns from a commodities pool and a purported investment in an Internet company. He lied to investors to lure them in, and then he lied to them to keep them at bay. Now Seward has been sentenced to prison for his deception.”
According to the Indictment and other submissions filed in Manhattan federal court, and other statements made in open court:
From July 2011 through May 2013, SEWARD and Kaziyev, through SK Madison, engaged in a scheme to defraud over 20 individuals by convincing them to invest approximately $1.3 million into the unregistered commodities pool they were operating. To lure investors, SEWARD and Kaziyev made false representations about the success of their pool and, in some cases, about the very nature of the investments they were soliciting.
For example, from around July 2011 to around October 2011, SEWARD and Kaziyev convinced two investors to pay approximately $330,000 to an entity called SK Madison Partners (“SKM Partners”), which these investors understood would be purchasing stock in an Internet social media company. SEWARD, Kaziyev, and another individual took hefty “commissions” for themselves out of the funds and invested the remainder not in any Internet social media company but in the SK Madison commodities trading pool. From there, SEWARD and Kaziyev withdrew yet more of the funds for their own benefit.
To those investors who knew they were investing in SK Madison’s commodities pool, SEWARD and Kaziyev lied about the success the pool had enjoyed. They mailed and emailed false “track record” reports reflecting purported trading profits in most months from August 2011 through dates in 2012 and 2013. These profit figures were fictitious. Even for those months in which the SK Madison pool had turned a profit, the amount of profit bore no relationship to the figure reported in the “track record.” And the “track record” reports reflected trading profits in months in which the pool had in fact suffered significant trading losses. Similarly false profit figures were published to investors through monthly account statements.
In or about the spring and summer of 2013, when confronted by members of the National Futures Association (“NFA”) and the Commodity Futures Trading Commission (“CFTC”) with their large withdrawals from SK Madison’s trading and bank accounts for their own benefit, SEWARD and Kaziyev sought to justify the withdrawals by citing “commissions” of either $55 or $110 per transaction that SK Madison purportedly had charged for operating the commodities pool. In fact, although SK Madison’s prospectus alerted investors that a $55 commission would be levied per completed transaction, the withdrawals that SEWARD and KAZIYEV made and caused to be made from the accounts bore no relationship to the number of trades effectuated in the accounts, and far exceeded what might have been calculated using the $55 commission figure.
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As part of the sentence imposed today by Judge Ramos, SEWARD, 35, of Largo, Florida, was further sentenced to two years of supervised release and was ordered to pay $200,000 in forfeiture and $750,000 in restitution to the victims of the offense.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and thanked the CFTC, which has filed civil charges in a separate action. Mr. Bharara also thanked the NFA for its assistance in this investigation.
The charges were brought in connection with the President’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. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Sarah Eddy McCallum is in charge of the prosecution.
Pocahontas County, WV man convicted for role in manufacturing methamphetamineRead the Press Release
ELKINS, WEST VIRGINIA – David Wayne Doyle, 42, of Bartow, West Virginia, was convicted in federal court for his role in manufacturing methamphetamine, United States Attorney William J. Ihlenfeld, II, announced.
Doyle was among seven individuals charged in a 29-count federal indictment in April 2014. Specifically, Doyle was discovered in possession of material commonly used to manufacture methamphetamine in Randolph County, West Virginia. Those materials included coffee filters, a mason jar, sandwich bags, and cold medicine containing pseudoephedrine.
Doyle pled guilty to one count of “Possession of Material Used in the Manufacture of Methamphetamine – Aiding and Abetting.” He faces up to 10 years in prison and a fine of up to $250,000. 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 Stephen Warner prosecuted the case on behalf of the government. The Mountain Region Drug and Violent Crime Task Force, the United States Forest Service, the Pocahontas County Sheriff’s Department, and the West Virginia State Police investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Philadelphia Woman Admits to Tax CrimesRead the Press Release
PHILADELPHIA - Sharnise Carroll, 36, of Philadelphia, PA, pleaded guilty yesterday to seven counts of aiding and assisting in the preparation of fraudulent tax returns. A sentencing hearing is scheduled for March 30, 2016. Carroll faces up to three years in prison, up to two years of supervised release, restitution to the IRS, a $700 special assessment and a possible fine.
Between February 2009 and September 2009, Carroll prepared and electronically filed federal income tax returns for seven individuals, six of whom did not know Carroll, in which she sought First Time Home Buyer Credit on behalf of each individual. Carroll knew that none of the seven individuals qualified for the credit and one of the returns that Carroll prepared was for a minor whose identity had been stolen. Carroll received a total of $53,445 in cash payments and had the IRS directly deposit the monies into one of two bank accounts in her name.
The case was investigated by Internal Revenue Service Criminal Investigations in conjunction with the City of Philadelphia Office of Inspector General. It is being prosecuted by Assistant United States Attorney Linwood C. Wright, Jr.
Pediatrician Sentenced to 30 Years in Prison for Sexual Exploitation of ChildrenRead the Press Release
A pediatrician was sentenced to 30 years in prison to be followed by lifetime supervised release for sexual exploitation of minors, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Robert L. Capers of the Eastern District of New York announced today.
In April 2014, Rakesh K. Punn, 57, of Bethpage, New York, pleaded guilty to producing child pornography. In connection with his plea, Punn admitted that in September 2007, he sexually exploited a minor pediatric patient during a medical appointment at his home-office in Bethpage. Punn falsely diagnosed the child with an illness so that he could obtain unfettered access to her without her parents being present and then drugged and secretly photographed the girl. At sentencing, the court found that Punn engaged in a pattern of similar conduct with other patients and enhanced his sentence accordingly.
Punn awaits sentencing on state charges also related to this conduct.
Trial Attorney Amy Larson of the Justice Department’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Allen L. Bode of the Eastern District of New York prosecuted this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Owner of Fairfield Ohio Car Dealership Pleads Guilty to Money LaunderingRead the Press Release
CINCINNATI – Bryan Barbarawi, 35, of West Chester, Ohio, pleaded guilty to committing money laundering relative to the sale of a vehicle. Barbarawi faces a maximum prison term of 20 years and a fine of up to $250,000.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA) and Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office, announced the announced the guilty plea entered before U.S. District Judge Susan J. Dlott.
According to court documents, since February 2011 Barbarawi owned and operated a car dealership in Fairfield, Ohio under the names Nationwide Credit Solutions, LLC d/b/a Auto Max, Extreme Imports and Falcon Auto Sales, Inc.
On November 5 and 6, 2014, Barbarawi committed money laundering by concealing the source and ownership of the proceeds from narcotics trafficking, as represented to Barbarawi by an undercover law enforcement officer, while conducting a financial transaction. Specifically, Barbarawi sold a vehicle to an undercover law enforcement officer, who represented that the money used to purchase the car was drug proceeds.
Barbarawi received approximately $21,533.50 in cash from the sale of the vehicle and then caused an employee of his car dealership to fabricate a Form 8300 – Report of Cash Payments Over $10,000 Received in a Trade or Business, which falsely reported the purchaser of the vehicle and the source of the funds used to purchase the vehicle.
“IRS, Criminal Investigation focuses on the flow of money which ultimately leads us to the individual who attempts to conceal the true source of the money,” said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
U.S. Attorney Stewart commended the investigation of this case by the DEA and IRS, and Assistant United States Attorneys Jessica W. Knight and Karl Kadon, who are prosecuting the case.
Orthodox Jewish Rabbi Sentenced to Eight Years in Prison for Conspiring to Kidnap Jewish Husbands, Force Them to Consent to Religious DivorcesRead the Press Release
TRENTON, N.J. - An Orthodox Jewish Rabbi was sentenced today to 96 months in prison for conspiring to kidnap Jewish men in an effort to force them to give their wives religious divorces, referred to as “gets,” U.S. Attorney Paul J. Fishman announced.
Jay Goldstein a/k/a “Yaakov,” 61, of Brooklyn, New York, was previously convicted by a federal jury of Count One and Count Five of an indictment charging him with conspiracy to commit kidnapping and attempted kidnapping. Jay Goldstein was convicted following an eight-week trial before U.S. District Judge Freda L. Wolfson, who imposed the sentence today in Trenton federal court.
According to documents filed in this case and the evidence at trial:
On Dec. 1, 2009, in Lakewood, an Orthodox Jewish man, Israel Markowitz, was assaulted, placed in a van, tied up, beaten and shocked with a stun-gun until he agreed to give his wife a get.
On Oct. 16, 2010, in Lakewood, another Orthodox Jewish man, Ysrael Bryskman, was assaulted, tied up and beaten until he agreed to give his wife a get.
On Aug. 22, 2011, in Brooklyn, another Orthodox Jewish man, Usher Chaimowitz, and his roommate, Menachem Teitlebaum, were assaulted, tied up and beaten until Chaimowitz agreed to give his wife a get.
Based upon these incidents, the FBI began an undercover operation in August 2013 in which two FBI agents posed as a wife who was seeking a get from her recalcitrant husband, and her brother, who was trying to help her obtain the get. Over the next several weeks, the undercover agents had multiple recorded phone calls and in-person meetings with Mendel Epstein, 70, Lakewood, New Jersey. In those meetings, Epstein arranged to have his team kidnap the husband at a warehouse in exchange for $60,000.
On Oct. 9, 2013, Jay Goldstein, his sons Moshe Goldstein, 32, and Avrohom Goldstein, 36, and others – including Binyamin Stimler, 40, Simcha Bulmash, 32, David Hellman, 33, Sholom Shuchat, 31, all of Brooklyn, and Ariel Potash, 42, of Monsey, New York – traveled from New York to a warehouse in Middlesex County, New Jersey, to execute the planned kidnapping of the husband to force him to give the get.
They arrived at the warehouse in two dark minivans shortly after 8:00 p.m. Some of the kidnap team members put on masks and entered the warehouse office with the undercover agent posing as the brother. The remaining kidnappers walked around the outside with flashlights. Over the next 15 minutes, members of the kidnap team went in and out of the warehouse office wearing disguises, including ski masks, Halloween masks and bandanas. They discussed their plan for kidnapping and assaulting the husband, how they planned to grab him, pull him down, tie him up, and take his phone. Members of the kidnap team brought with them to the warehouse a 30-foot nylon rope, a blindfold, vodka, license plates they had switched out, and items used to ceremonially record the get. At 8:23 p.m., law enforcement moved into the warehouse office and arrested the eight men.
In addition to the prison term, Judge Wolfson sentenced Jay Goldstein to five years of supervised release.
Avrohom Goldstein, Potash, Shuchat, Moshe Goldstein, Hellman, and Bulmash have all pleaded guilty to one count of traveling in interstate commerce to commit extortion. Avrohom Goldstein and Potash were sentenced Nov. 19, 2015 to 45 and 14 months in prison, respectively. Shuchat was sentenced to time served on Nov. 19, 2015. Moshe Goldstein was sentenced Nov. 16, 2015 to 48 months in prison. Hellman and Bulmash were sentenced Nov. 17, 2015 to 44 and 48 months in prison, respectively. Martin Wolmark, 57, of Monsey, previously pleaded guilty to conspiracy to travel in interstate commerce to commit extortion and was sentenced Dec. 14, 2015 to 38 months in prison.
Epstein and Stimler were also previously convicted at trial of Count One of the indictment charging them with conspiracy to commit kidnapping. Stimler was additionally convicted on Count Five of the indictment, attempted kidnapping. Epstein and Stimler were sentenced yesterday to 120 and 39 months in prison, respectively.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the Lakewood Police Department with the investigation.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah M. Wolfe of the U.S. Attorney’s Office in Trenton.
Nurse Practitioner Sentenced for Filing False Claims with Health Insurance Companies and Identity TheftRead the Press Release
ATLANTA - Daphne Maria Patterson has been sentenced to five years and one month in federal prison for health care fraud and aggravated identity theft for filing claims with health insurance companies in which she sought reimbursement for providing medical care to patients that she never provided. Patterson stole personal identifying information from her patients and their family members so she could file more than $2 million in claims from five health insurance companies.
“This defendant was a trusted health care official who stole personal information from her patients’ and their families to enrich herself,” said U.S. Attorney John Horn. “Patterson thought nothing of defrauding health insurance companies or the effects that her scheme could have on her patients’ lives.”
“The defendant in this case displayed a complete disregard for those patients that she victimized as well as the insurance companies that she stole from. The FBI will continue to work with its various law enforcement partners to better protect health care insurance providers and their clients from this type of fraud,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“Fraudulent actions like Ms. Patterson’s not only betrayed the trust that patients placed in her, but they also made everyone’s insurance premiums go up,” Commissioner Hudgens said. “I’m appreciative that U. S. Attorney Horn’s office diligently pursued prosecution in this case.”
According to U.S. Attorney Horn, the charges and other information presented in court: Patterson’s fraud began when she worked as a nurse practitioner for a general medical practice in Lawrenceville, Georgia. Although she was not supposed to bill insurance companies as an employee, she stole identifying information of her patients, and their family members—most of whom Patterson had not treated at all. She filed false claims with the insurer claiming to have provided various allergy tests and treatments to the beneficiaries, when in fact she had not provided these services.
Once her employment with the general medical practice ended, Patterson opened her own clinic, called Healthier U 4 Ever Complete Wellness Center in Stone Mountain, Georgia. While there, Patterson used her patients’ personal information to continue her scheme, and billed various health insurance companies for expensive allergy tests and treatments, when in fact most patients were receiving weight loss advice and assistance. In total, Patterson received more than $1 million from the health insurance companies as a result of her false claims.
Daphne Maria Patterson, 44, of Lithonia, Georgia, has been sentenced to five years, one month in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,153,383.76. Patterson was convicted of these charges on October 7, 2015, after she pleaded guilty.
This case was investigated by the Federal Bureau of Investigation and the State of Georgia Office of Commission of Insurance.
Assistant United States Attorney Jamie L. Mickelson prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
North Carolina Man Charged in Fraudulent U.S. Treasury Check SchemeRead the Press Release
A federal grand jury sitting in Raleigh, North Carolina, returned an indictment, which was unsealed today against a Raleigh man, charging him with one count of conspiracy to commit theft of public money and 22 counts of theft of public money, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina.
According to the indictment, in 2011 and 2012, Wilfredo Acosta Hidalgo conspired with two check cashers to cash U.S. Treasury checks issued as a result of fraudulent tax returns filed in the names of third-parties. Hidalgo provided U.S. Treasury checks ranging in value from $4,000 to $8,000 to the check cashers. These checks were issued to third parties in whose names the fraudulent tax returns were filed. The third-party payees purportedly lived in Florida, North Carolina, Virginia, Maryland, Delaware, Pennsylvania and New Jersey. The check cashers deposited the U.S. Treasury checks into their business bank accounts and then provided Hidalgo with cash equal to the value of the check minus a check cashing fee. The third-party payees were not present when the checks were cashed.
If convicted, Hidalgo faces a statutory maximum sentence of five years in prison for the conspiracy charge and 10 years in prison for each count of theft of public funds. He also faces substantial monetary penalties, supervised release and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Walker commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Nathan P. Brooks and Lauren M. Castaldi of the Tax Division, who are prosecuting this case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the Eastern District of North Carolina for its assistance.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
North Carolina Man Charged in Fraudulent U.S. Treasury Check SchemeRead the Press Release
WASHINGTON – A federal grand jury sitting in Raleigh, North Carolina, returned an indictment, which was unsealed today against a Raleigh man, charging him with one count of conspiracy to commit theft of public money and 22 counts of theft of public money, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina.
According to the indictment, in 2011 and 2012, Wilfredo Acosta Hidalgo conspired with two check cashers to cash U.S. Treasury checks issued as a result of fraudulent tax returns filed in the names of third-parties. Hidalgo provided U.S. Treasury checks ranging in value from $4,000 to $8,000 to the check cashers. These checks were issued to third parties in whose names the fraudulent tax returns were filed. The third-party payees purportedly lived in Florida, North Carolina, Virginia, Maryland, Delaware, Pennsylvania and New Jersey. The check cashers deposited the U.S. Treasury checks into their business bank accounts and then provided Hidalgo with cash equal to the value of the check minus a check cashing fee. The third-party payees were not present when the checks were cashed.
If convicted, Hidalgo faces a statutory maximum sentence of five years in prison for the conspiracy charge and 10 years in prison for each count of theft of public funds. He also faces substantial monetary penalties, supervised release and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Walker commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Nathan P. Brooks and Lauren M. Castaldi of the Tax Division, who are prosecuting this case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the Eastern District of North Carolina for its assistance.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
New Orleans Man Sentenced for Interstate Transportation of Stolen VanRead the Press Release
U.S. Attorney Kenneth A. Polite announced that FRANK MIKE, JR., age 46, of New Orleans, was sentenced today after previously pleading guilty to an Indictment charging him with interstate transportation of a stolen 2010 Dodge Caravan van from Louisiana to Georgia.
U.S. District Judge Sarah S. Vance sentenced MIKE, who had been detained in jail on the charge for 20 months, to imprisonment for time served and to a three-year term of supervised release. The Court ordered MIKE to pay restitution in the amount of $13,667.25 and a $100.00 special assessment. MIKE will remain in custody due to a state parole revocation and a hold for a pending state court trial.
According to court records, on February 19, 2014, family members reported to the St. John the Baptist Parish Sheriff’s Department that Kenneth and Lakeitha Joseph of Reserve, were missing. A relative also indicated that she loaned her 2010 Dodge Grand Caravan to the Josephs but that the van had not been returned. On February 27, 2014, the missing 2010 Dodge Grand Caravan was recovered by the Fulton County Police Department in College Park, Georgia, at an apartment complex. Investigators discovered that van had been parked at the Travelodge Hotel located in College Park. On February 21, 2014, video surveillance at the Travelodge showed MIKE driving the van into the hotel parking lot.
In March 2014, the bodies of Kenneth and Lakeitha Joseph were found in the Intercoastal Waterway in New Orleans East. The New Orleans Parish Coroner determined that their deaths resulted from drowning. Later forensic testing revealed that blood samples taken from the stolen van matched the DNA of both victims.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation, the Drug Enforcement Administration, the New Orleans Police Department, the St. John the Baptist Parish Sheriff’s Office, the Fulton County Police Department, the Orleans Parish District Attorney’s Office, and the St. John the Baptist Parish District Attorney’s Office in investigating this matter. Assistant United States Attorney Michael B. Redmann was in charge of the prosecution.
New Orleans Doctors and Registered Nurse Sentenced for Roles in $50 Million Fraud SchemeRead the Press Release
WASHINGTON – Two doctors and a registered nurse were sentenced to prison today for their roles at the center of a $50 million health care fraud scheme in New Orleans.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Field Office, Special Agent in Charge CJ Porter of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Dallas Regional Office and the Louisiana Attorney General’s Medicaid Fraud Control Unit made the announcement.
Dr. Barbara Smith, 67, of Metairie, Louisiana; Dr. Roy Berkowitz, 69, of Slidell, Louisiana; and Beverley Breaux, 67, of New Orleans, a registered nurse, were sentenced by U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana to 80 months, 64 months and 50 months in prison, respectively. Judge Vance also ordered Smith, Berkowitz and Breaux to pay $9,484,939, $4,952,816 and $2,057,179 in restitution, respectively.
Evidence introduced at trial showed that the defendants and others carried out a home health care fraud scheme in and around New Orleans through multiple companies over the course of more than 10 years. Smith and Berkowitz falsely certified that thousands of Medicare recipients were homebound and required nursing or therapy services to be provided in their homes. Breaux falsely certified that these patients were homebound and falsely claimed to have treated patients that she had not seen. From 2007 through 2014, the companies in this scheme submitted more than $56 million in claims to Medicare, the vast majority of which were fraudulent. Medicare paid approximately $50.7 million on these claims.
This case was investigated by the FBI, HHS-OIG and the Louisiana Attorney General’s Medicaid Fraud Control Unit and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Louisiana. Trial Attorneys William Kanellis and Antonio Pozos of the Fraud Section prosecuted this case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.justice.gov/criminal-fraud/health-care-fraud-unit.
New Orleans Doctors and Registered Nurse Sentenced for Roles in $50 Million Fraud SchemeRead the Press Release
Two doctors and a registered nurse were sentenced to prison today for their roles at the center of a $50 million health care fraud scheme in New Orleans.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Field Office, Special Agent in Charge CJ Porter of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Dallas Regional Office and the Louisiana Attorney General’s Medicaid Fraud Control Unit made the announcement.
Dr. Barbara Smith, 67, of Metairie, Louisiana; Dr. Roy Berkowitz, 69, of Slidell, Louisiana; and Beverley Breaux, 67, of New Orleans, a registered nurse, were sentenced by U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana to 80 months, 64 months and 50 months in prison, respectively. Judge Vance also ordered Smith, Berkowitz and Breaux to pay $9,484,939, $4,952,816 and $2,057,179 in restitution, respectively.
Evidence introduced at trial showed that the defendants and others carried out a home health care fraud scheme in and around New Orleans through multiple companies over the course of more than 10 years. Smith and Berkowitz falsely certified that thousands of Medicare recipients were homebound and required nursing or therapy services to be provided in their homes. Breaux falsely certified that these patients were homebound and falsely claimed to have treated patients that she had not seen. From 2007 through 2014, the companies in this scheme submitted more than $56 million in claims to Medicare, the vast majority of which were fraudulent. Medicare paid approximately $50.7 million on these claims.
This case was investigated by the FBI, HHS-OIG and the Louisiana Attorney General’s Medicaid Fraud Control Unit and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Louisiana. Trial Attorneys William Kanellis and Antonio Pozos of the Fraud Section prosecuted this case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
New Hampshire Man Sentenced on Firearms ChargesRead the Press Release
CONCORD, N.H. – Acting U.S. Attorney Donald Feith announced today that Gordon Potter, 35, formerly of Hampstead, New Hampshire, was sentenced to a term of 92 months’ imprisonment to be followed by a 3 year term of supervised release.
In August 2015, Potter pleaded guilty to a four count indictment charging him with three counts of possession of ammunition and firearms, in violation of 18 U.S.C. § 922(g)(1), and one count of being an unlawful user in possession of a firearm in violation of 18 U.S.C. § 922(g)(3). As a result of multiple prior felony convictions in New Hampshire state court, Potter was prohibited under federal law from possessing any firearms or ammunition.
According to court documents and statements made in court, on February 26, 2015, Salem Police conducted a routine traffic stop on a vehicle in which Potter was a passenger. After suspected controlled substances were observed in the vehicle, a search warrant was later obtained and law enforcement recovered a 12 gauge Mossberg shotgun; a modified Kel-Tec pistol; high capacity magazines, ammunition; four cell phones, and three laptop computers. The firearms were later determined to be stolen. Potter has remained in custody on a New Hampshire state parole violation since that date.
The case was investigated by the Salem Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives and is being prosecuted by Assistant U.S. Attorneys Debra M. Walsh and Charles L. Rombeau.
Nashville Man Convicted on Federal Fraud Charges in Connection with False Accident Claim SchemeRead the Press Release
UPDATE
The defendant in this case was granted a new trial and in August 2018 he was acquitted of the charges described below.
Jason Glynn, 41, of Nashville, was convicted yesterday by a federal jury of bank fraud, announced United States Attorney David Rivera. Glynn previously worked as a claims adjuster at Western Express, a trucking company based in Nashville, and his responsibilities including adjusting and resolving accident claims involving Western Express trucks.
During the five-day trial before U.S. District Court Chief Judge Kevin H. Sharp, the evidence demonstrated that Glynn submitted falsified paperwork to Western Express concerning false accident claims purportedly arising from automobile accidents that either never occurred or that had occurred but did not involve the named claimants. The evidence also showed that Glynn fraudulently endorsed and deposited checks issued by Western Express in connection with these false accident claims.
The jury convicted Glynn on five counts of bank fraud, and also acquitted him on three counts of the indictment, including conspiracy, mail fraud, and identity theft.
Glynn faces up to 30 years in prison for each count of conviction, and will be ordered to pay restitution to Western Express. Glynn also faces forfeiture of the proceeds of his fraud. Glynn will be sentenced by Chief Judge Sharp in 2016. The sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
Previously, two other defendants were convicted of federal felony charges in connection with this same scheme. Jamie Little, 35, of Nashville, was convicted of conspiracy to commit mail fraud earlier this year, and Leo Rice, 39, also of Nashville, was convicted of this same offense in 2013. Both will be sentenced by Chief Judge Sharp.
The case was investigated by the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorneys William F. Abely and Cecil W. VanDevender.
Murphysboro Resident Sentenced for Crack Cocaine and Methamphetamine OffensesRead the Press Release
On December 10, 2015, Isaac Jackson, 36, of Murphysboro, was sentenced for possessing and distributing crack cocaine and methamphetamine, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Jackson, who had previously pled guilty to a three-count indictment charging two counts of distribution of crack cocaine and methamphetamine and one count of possession with intent to distribute crack cocaine, was sentenced to 151 months in federal prison, 3 years’ supervised release, and fined $750.00. Evidence at the plea and sentencing hearings established that, on February 24 and 25, 2015, Jackson sold both crack cocaine and methamphetamine to a confidential source working for law enforcement. When Jackson was arrested on February 25, 2015, he was in possession of a large amount of U.S. currency and a large amount of crack cocaine, which was packaged for distribution. Jackson received an enhanced sentence based on his classification as a Career Offender.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office and the Murphysboro Police Department. The Jackson County State’s Attorney’s Office assisted in the investigation.
The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Mt. Morris Man Charged with Child Pornography and EnticementRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Calvin R. Patrick, 34, of Mt. Morris, NY, was charged by criminal complaint with attempted production of child pornography, enticement of a minor, receipt and possession of child pornography. The charges carry a mandatory minimum penalty of 25 years in prison, a maximum of life and a fine of $250,000 in part because the defendant’s prior conviction involving child pornography charges.Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that according to the complaint, law enforcement was notified by a cooperating witness who saw the contents of the defendant’s electronic tablet. The contents observed by the witness consisted of young females engaging in sexually explicit conduct. The witness also observed an image on Patrick’s Kik account that appeared to depict a nude, 14-year-old female from Florida. The witness further told law enforcement that she was aware that Patrick had been communicating with an 11-year-old from Pennsylvania and that the defendant had made comments in the past about picking up the 11-year-old and keeping her locked up within certain property so he could do what he wanted to her.
A search warrant was conducted by Livingston County Probation and Mt. Morris Police at Patrick’s apartment. Law enforcement officers seized the electronic tablet, a computer and other items. A forensic analysis determined that Patrick had been chatting on Kik with two minors under the age of 18 who resided out of state.
Patrick made an initial appearance today before U.S. Magistrate Judge Marian W. Payson and he being detained. The defendant is also currently facing additional, unrelated charges in Livingston County.
The criminal complaint was the culmination of an investigation on the part of the Federal Bureau of Investigation Child Exploitation Task Force, under the direction of Special Agent in Charge Adam S. Cohen, the Mount Morris Police Department, under the direction of Chief Ken Mignemi, the Livingston County Probation Department, under the direction of Director Lynne C. Mignemi, and the Livingston County District Attorney’s Office, under the direction of Gregory J. McCaffrey. The task force includes the Monroe County Sheriff’s Office, the Rochester Police Department, and U.S. Immigration and Customs Enforcement-Homeland Security Investigations.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Montgomery County Company Charged with Clean Water Act ViolationsRead the Press Release
PHILADELPHIA –Matthew Brozena, 58, of Telford, PA, and his company, MAB Environmental Services, Inc., were charged by indictment with conspiracy to violate the Clean Water Act and other offenses, announced United States Attorney Zane David Memeger. The indictment also charges the defendants with knowingly violating permit conditions, tampering with required monitoring devices and methods, and false reporting. Separate criminal informations have been filed charging James Wetzel, 63, of Harrisburg, PA, James Crafton, 61, of Upper Black Eddy, PA, and Stephen Fritz, 48, of in Harleysville, PA, with related environmental violations.
The indictment alleges that Brozena and his company, MAB Environmental Services, Inc., contracted to operate wastewater treatment plants for its customers BC Natural Chicken and Buckingham Valley Nursing Center, in compliance with permits issued by the Pennsylvania Department of Environmental Protection to those facilities. The permits allowed BC Natural and Buckingham to discharge from their wastewater treatment plants into nearby waters under specified conditions. The permit conditions included that the operators of the wastewater treatment plants properly operate and maintain the wastewater treatment plants. The permits also required that the operators test samples of the discharge from the plants for certain pollutants and report the samples and test results to the PADEP. The permits set limits for the amount of each pollutant that each facility was allowed to discharge. The charging documents allege that Brozena directed his employees at MAB, including Wetzel and Fritz, to discard samples when Brozena believed that the pollutants in the samples would exceed the permit limits. The charges also allege that, at Brozena’s direction, Wetzel, Crafton, Fritz, and other MAB employees falsely reported samples and test results.
“The EPA and its regulatory partners are dedicated to safeguarding public health,” said Jennifer Lynn, Assistant Special Agent in Charge of Environmental Protection Agency’s criminal enforcement program in Pennsylvania. “In order to fulfill that mission, it is essential that governments receive accurate test samples and measurements. This case demonstrates that those who would knowingly put public health at risk can expect to face prosecution.”
If convicted of all charges, MAB Environmental Services, Inc., faces probation and fines; Brozena faces a significant term of imprisonment, fines, and supervised release; Crafton and Fritz face prison terms and fines and supervised release; and Wetzel faces a maximum sentence of one year in prison, a fine, and supervised release.
The case was investigated by the U.S. Environmental Protection Agency Criminal Investigation Division, with the assistance of the Pennsylvania Department of Environmental Protection. It is being prosecuted by Assistant United States Attorney Sarah L. Grieb and Special Assistant United States Attorney Patricia Miller.
Indictments and Informations are accusations. A defendant is presumed innocent unless and until proven guilty.
Monroe County Man Sentenced to 30 Months in Federal Prison for Heroin TraffickingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Monroe County man was sentenced to 30 months’ imprisonment by Senior United States District Judge Edwin M. Kosik in Scranton for aiding and abetting the distribution of heroin.
According to United States Attorney Peter Smith, Harry Rivera, age 39, of East Stroudsburg, pleaded guilty in July 2015 to the charges of aiding and abetting the possession with intent to distribute heroin. Rivera and another man, Joseph Crawford, age 41, of Marshalls Creek, were indicted by a grand jury in Scranton in November 2014. The charges stemmed from an incident on June 17, 2014, in Monroe County, in which investigators found approximately 97 grams of heroin within a hidden compartment in a vehicle in which Rivera and Crawford were travelling.
In addition to the prison term, Judge Kosik also ordered that Rivera be supervised by a probation officer for three years following his release from prison.
Previously, Joseph Crawford was sentenced to 37 months’ imprisonment by Judge Kosik on charges of possession with intent to distribute heroin and being a convicted felon in possession of a firearm. The firearms charge resulted from a search of Crawford’s residence in Marshalls Creek in which police seized a Glock pistol and a Smith & Wesson rifle. Crawford, who was previously convicted of a felony offense, is prohibited by law from possessing a firearm.
The investigation was conducted by the Drug Enforcement Administration, the Pennsylvania State Police, the Pocono Mountain Regional Police Department and the Stroud Area Regional Police Department.
The case was prosecuted by Assistant United States Attorney Robert J. O’Hara.
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Michael Anthony Benanti and Brian Scott Witham Indicted for Armed Bank ExtortionsRead the Press Release
KNOXVILLE, Tenn. – On Dec. 15, 2015, a federal grand jury returned a 15-count indictment against Michael Anthony Benanti, 43, of Lake Harmony, Pennsylvania, and Brian Scott Witham, 45 of Waterville, Maine, for their involvement in armed bank extortions of the Y-12 Federal Credit Union in Oak Ridge, Tenn., in April 2015; SmartBank in Knoxville, Tenn., in July 2015; and Northeast Community Credit Union in Elizabethton, Tenn., in October 2015.
After a vehicle pursuit, Benanti and Witham were arrested on Nov.25, 2015, in Buncombe County, N.C., by the North Carolina State Highway Patrol, in conjunction with the Maggie Valley Police Department, Haywood County Sheriff’s Office, and Buncombe County Sheriff’s Office.
The actual charges against Benanti and Witham were announced by the FBI and U.S. Attorney’s Office at a press conference held earlier today and are contained in the indictment on file with U.S. District Court in Knoxville. A trial date has not yet been set. If convicted, both face minimum sentences of 142 years in prison, because federal law requires consecutive sentences for each of the firearms offenses charged in the indictment. As to any individual offense in the indictment, the district court could impose a sentence of up to life in prison.
The arrests and indictment of Benanti and Witham are the result of extensive cooperative efforts of numerous law enforcement agencies, including: Knoxville Police Department, Major Crimes Unit, Knox County Sheriff’s Office, Major Crimes Unit, Oak Ridge Police Department, Elizabethton Police Department, North Carolina State Highway Patrol, North Caroline State Bureau of Investigation, Johnson City Police Department, Tennessee, Carter County Police Department, Tennessee, Asheville Police Department, North Carolina, Maggie Valley Police Department, North Carolina, Waynesville Police Department, North Carolina, Haywood County Sheriff’s Office, North Carolina, Buncombe County Sheriff’s Office, North Carolina, FBI Asheville Resident Agency, North Carolina, along with the FBI Safe Streets Task Forces composed of officers from the Knox County Sheriff’s Office, Knoxville Police Department and Johnson City Police Department. Assistant U.S. Attorneys David Lewen and Greg Bowman represent the United States.
Members of the public are reminded that these are only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
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Mexican National Indicted for Transporting Three Individuals Who Unlawfully Entered and Remained in the United StatesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Harrisburg has indicted Esau Garcia-Patino, for transporting three individuals who unlawfully entered and remained in the United States.
According to U.S. Attorney Peter Smith, the indictment charges that on October 20, 2015, Garcia-Patino, a 23year old Mexican national, was stopped by State Police in Cumberland County and found to be aiding and transporting three individuals within the United States who unlawfully entered and remained in the United States. Garcia-Patino remains in custody.
The matter was investigated by the U.S. Immigration and Customs Enforcement and Removal Operations (ERO) and the Pennsylvania State Police. The case is being prosecuted by Assistant U.S. Attorney Christy H. Fawcett.
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.
The maximum penalty under federal law is 10 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.
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Mexican National Indicted for Illegal Re-EntryRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Harrisburg has indicted Manuel Valadez-Mirales, for illegally re-entering the United States after having been previously deported.
According to U.S. Attorney Peter Smith, Valadez-Mirales, a 46 year old Mexican national, was deported in 2003 and illegally re-entered the United States at some point prior to November 13, 2015.
The matter was investigated by the U.S. Immigration and Customs Enforcement and Removal Operations (ERO) and the case is being prosecuted by Assistant U.S. Attorney Scott R. Ford.
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.
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.
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Medical Doctor and Wife Plead Guilty to Conspiring to Acquire Controlled Substances by Fraud and DeceptionRead the Press Release
Assistant U. S. Attorney Orlando B. Gutierrez (619) 546-6958
NEWS RELEASE SUMMARY – December 16, 2015
SAN DIEGO – Dr. Matthew Cole and his wife, Shireen Cole, pleaded guilty yesterday to prescription drug-related charges, admitting that they conspired to obtain scheduled pharmaceutical drugs commonly known as Percocet, Xanax and Ambien by submitting fraudulent prescriptions to pharmacies as if they were valid.
Dr. Cole, a dermatologist at Insight Dermatology with offices in San Diego and National City, used his own prescription pad with his assigned DEA registration number to write prescriptions in the names of friends with whom he had no doctor-patient relationship, and who had no knowledge of the prescriptions written in their names. He also wrote prescriptions for his wife using her maiden name.
For example, Dr. Cole admitted in his plea agreement that he wrote a prescription for 60 10-milligram tablets of Oxycodone in the name of a female college friend and on December 27, 2014, his wife took it to be filled at a CVS Pharmacy. While still in the CVS Pharmacy, Shireen Cole, a licensed Marriage and Family Therapist intern, handed the oxycodone tablets over to Dr. Cole.
Although the college friend was never a patient of Dr. Cole, on February 16, 2015, at his medical office, he created a false medical file for that friend, using his status as a licensed medical doctor to create the false appearance of a valid doctor/patient relationship.
In all, the defendants’ plea agreements listed 39 instances where fraudulent medical prescriptions were used to acquire Scheduled pharmaceutical drugs from commercial pharmacies. These 39 separate instances resulted in the acquisition of 1,820 tablets of scheduled pharmaceutical drugs, 1,280 of which were oxycodone – commonly known as Percocet. The other drugs were zolpidem tartrate, commonly known as Ambien, and alprazolam, known as Xanax.
According to statements made in court yesterday, the defendants are both in drug treatment programs.
DEFENDANT Case Number: 15CR3074-H
Matthew Cole, M.D. Age: 37
Shireen Cole Age: 37
SUMMARY OF CHARGE
Title 21 U.S.C. Sections 843(a)(3), 843(d)(1), and 846 – Conspiracy to Acquire Controlled Substances by Fraud, Deception, and Subterfuge
Maximum penalty: 4 years
AGENCY
Drug Enforcement Administration
Department of Health Care Services
Maryland man discovered in possession of stolen firearms sentenced to 41 months in prisonRead the Press Release
CLARKSBURG, WEST VIRGINIA – Nevyou Alemu, 21, of Gaithersburg, Maryland, was sentenced today to 41 months in prison for possessing stolen firearms, United States Attorney William J. Ihlenfeld, II, announced.
Alemu conspired with Kristopher Seth Davis, 20, of Silver Spring, Maryland and Adesola Vanzant, 21, of Upper Marlboro, Maryland, to steal firearms. In April 2014, the defendants traveled from Maryland to New Milton, West Virginia and stole approximately 14 firearms and hundreds of rounds of ammunition from a residence. The defendants then returned to Maryland, transporting the stolen firearms and ammunition back across state lines. Specifically, the defendants were discovered in April 2014 in Doddridge County, West Virginia in possession of two stolen firearms: a .22 caliber pistol and a 20 gauge shotgun.
Following a 2 day trial, U.S. District Judge Irene M. Keeley found Alemu guilty in August 2015 of one count of “Conspiracy to Possess Stolen Firearms,” and one count of “Aiding and Abetting the Possession of Stolen Firearms.” He was sentenced today to 41 months in prison on each county. The sentences will run concurrently for a total of 41 months in prison.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge Irene M. Keeley presided.
Martin County Convicted Felons Indicted for Possessing Firearms at Jensen Beach Indoor Firing RangeRead the Press Release
Two Martin County convicted felons have been detained on an indictment, charging them with possessing firearms and ammunition at an indoor firing range in Jensen Beach, Florida.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Carlos A. Canino, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Miami Field Office, David Dyess, Chief, Stuart Police (SPD), and William D. Snyder, Sheriff, Martin County Sheriff’s Office (MCSO), made the announcement.
Aldrick James Lott, 30, and John Robert Rucker, Jr., 46, both of Stuart, were charged by indictment with being felons in possession of a firearm on November 7, 2015, in violation of Title 18, United States Code, Section 922(g)(1). In addition, Lott is charged with being a felon in possession of ammunition on December 1, 2015, in violation of Title 18, United States Code, Section 922(g)(1). Lott faces a maximum statutory sentence of 15 years to life imprisonment. Rucker faces a maximum statutory penalty of ten years in prison. A detention hearing was held on December 9, 2015, before Chief U.S. Magistrate Judge Frank J. Lynch, Jr.
According to court records and detention hearing testimony, on November 7, 2015, Lott and Rucker, entered a gun shop and indoor shooting range in Jensen Beach, Florida. During their visit, Lott and Rucker were recorded on video surveillance shooting targets with multiple firearms, including a Glock 30 .45ACP caliber pistol, Smith and Wesson M&P40 .40 caliber pistol, and High-Point 9mm pistol. The Glock and Smith and Wesson pistols were left at the store for cleaning, examined by law enforcement and determined to have been stolen.
On December 1, 2015, federal and local law enforcement agencies executed three search warrants, on residences connected to Lott and Rucker. Law enforcement recovered the High-Point 9mm pistol, a second firearm, and various rounds of ammunition from one home connected to Lott. From a second residence connected to Lott, officers recovered a magazine and ammunition matching the Smith and Wesson M&P40 .40 caliber pistol. From a residence connected to Rucker, officers recovered narcotics.
Mr. Ferrer commended the investigative efforts of ATF, Stuart Police Department, Martin County Sheriff’s Office, Federal Bureau of Investigation, Drug Enforcement Administration and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. This case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Manitowoc Man Indicted for Federal Kidnapping, Drug Conspiracy, and Firearm CrimesRead the Press Release
Acting United States Attorney Gregory J. Haanstad for the Eastern District of Wisconsin, announced that on December 15, 2015, a federal grand jury returned a three-count indictment charging Steven R. Schenian Jr. (age: 37) of Manitowoc, Wisconsin, with one count each of kidnapping in violation of Title 18, United States Code, Section 1201(a)(1), conspiracy to distribute 500 grams or more of a controlled substance in violation of Title 21, United States Code, Section 846, and possession of a firearm in furtherance of a drug crime in violation of Title 18, United States Code, Section 924(c).
If convicted of kidnapping, the defendant faces a life sentence, and if convicted of the drug conspiracy the defendant faces between five and forty years imprisonment. Conviction on the firearm offense carries a mandatory consecutive term of five years imprisonment.
According to the indictment, the defendant conspired with others to sell over 500 grams of cocaine in the Manitowoc County area, and on at least one occasion is alleged to have done so while possessing a firearm. Further, he is alleged to have unlawfully and willfully kidnapped an individual identified only as “John Doe” for the purpose of seeking retaliation against that individual.
The defendant appeared in federal court in Green Bay this morning and was remanded to the custody of the U.S. Marshal’s Service pending trial.
The case was investigated by the U.S. Drug Enforcement Agency (DEA) and the Manitowoc County MEG Unit. It is being prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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Manhattan U.S. Attorney Announces $39 Million Civil Fraud Settlement Against Qualitest Pharmaceuticals for Selling Half-Strength Fluoride SupplementsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Scott J. Lampert, Special Agent in Charge of the New York Regional Office for the Office of Inspector General for the Department of Health and Human Services (“HHS-OIG”), and Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Patrick E. McFarland, the Inspector General for the U.S. Office of Personnel Management (“OPM”) announced a $39 million settlement against Vintage Pharmaceuticals, LLC, d/b/a QUALITEST PHARMACEUTICALS; Vintage’S corporate parent Endo Pharmaceuticals, Inc.; and seven of their corporate subsidiaries or affiliates (collectively, “QUALITEST”) in a civil fraud lawsuit. This global settlement resolves federal claims under the False Claims Act, 31 U.S.C. § 3729 et seq., that allege QUALITEST sold chewable fluoride tablets that contained less than half the amount of fluoride ion indicated on the drug label and caused federal healthcare programs to be fraudulently billed for these tablets, and also will resolve numerous state law civil fraud claims.
The Government simultaneously intervened in and settled this lawsuit, which was initially filed by a whistleblower. As alleged in the Government’s intervention papers, QUALITEST violated the False Claims Act by knowingly manufacturing and selling understrength chewable fluoride tablets that were prescribed to children living in communities without fluoridated water supply to prevent tooth decay, and causing Medicaid and the Federal Employees Health Benefits Program to pay millions of dollars for these understrength tablets. Today, U.S. District Judge Denise Cote approved a settlement stipulation to resolve the Government’s claims against QUALITEST. Under that settlement, QUALITEST agrees to pay $22.44 million to the Government to resolve the federal civil fraud claims and make extensive admissions. Further, as part of the global settlement, QUALITEST will pay approximately $16.56 million to the settling states to resolve state law civil fraud claims.
Manhattan U.S. Attorney Preet Bharara said: “The integrity of federal healthcare programs like Medicaid depends on manufacturers telling the truth about their drugs and producing and labelling their drugs accurately. When companies violate that critical obligation, as Qualitest did here by distributing diluted fluoride and then causing health care programs to pay for the full strength tablets, we will pursue them, make them pay damages and admit to their violations.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “It is shocking that a pharmaceutical company would knowingly distribute diluted fluoride meant to provide preventative dental benefits to children as if it were full strength. We remain committed to investigating companies that put greed over their professional obligations to serve their customers and honestly bill for their products.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Qualitest knowingly exploited federal healthcare programs and misrepresented the quality of fluoride tablets provided to children in need of these supplements. Today's settlement brings us one step closer to tackling the misuse of public funds.”
OPM Inspector General Patrick E. McFarland said: “Qualitest’s actions are unconscionable and put the health and wellbeing of children at risk. I am proud that we were able to work with our law enforcement partners to hold Qualitest accountable for its offenses. We remain committed to ensuring that the health of Federal employees and their families are protected and that such unscrupulous behavior is caught and punished.”
As part of the settlement, QUALITEST admitted that they manufactured and sold chewable fluoride tablets from 2007 to July 2013 and that they knew federal healthcare programs, including Medicaid, were a significant source of coverage of QUALITEST’s fluoride tablets. QUALITEST also admitted that, since at least 1994, guidelines issued by the American Dental Association and the American Academy of Pediatrics recommended that, to prevent tooth decay, fluoride supplements be prescribed to children living in communities without fluoridated water supply in doses of 1.0 mg, 0.5 mg, or 0.25 mg of fluoride ion per day, depending on a child’s age and the local water fluoridation level. Further, QUALITEST admitted that the drug labeling for their chewable fluoride tablets stated that those tablets contained 1.0 mg, 0.5 mg, and 0.25 mg of fluoride and the drug labeling specifically referenced the guidelines from the American Dental Association and the American Academy of Pediatrics.
However, as QUALITEST’s admissions show, QUALITEST’s manufacturing processes were not designed to produce chewable fluoride tablets that would contain 1.0 mg, 0.5 mg, and 0.25 mg of fluoride ion per tablet. Specifically, as QUALITEST admitted, instead of using the amount of sodium fluoride that would result in the tablets containing the correct amount of fluoride ion, QUALITEST used less than half the appropriate amount of sodium fluoride. As QUALITEST further admitted, this caused children taking the QUALITEST fluoride tablets to receive less than half the amount of fluoride ion recommended by the American Dental Association and American Academy of Pediatrics guidelines.
The allegations of fraud stated in the Complaint were first brought to the attention of the Government by Dr. Stephan Porter, who filed a lawsuit in early 2013 under the qui tam provisions of the False Claims Act. In August 2013, and after the Government began its investigation into the whistleblower’s allegations, QUALITEST stopped making and selling their chewable fluoride tablets. Under the settlement approved earlier today, the Government agreed to pay Dr. Porter approximately $4.71 million pursuant to the False Claims Act’s qui tam provisions.
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The False Claims Act permits the Government to recover up to three times the amount of damages incurred by the United States, in addition to civil penalties ranging from $5,500 to $11,000 per violation. Private parties who have knowledge of fraud committed against the Government may file suit on behalf of the Government and share in any recovery. The United States may then intervene and file its own lawsuit for treble damages and penalties, as it did in this case.
Mr. Bharara praised the extensive investigative work undertaken by HHS-OIG, the FBI, OPM-OIG, and the Food and Drug Administration’s Office of Criminal Investigations, as well as close collaboration by the Medicaid Fraud Control Units for New York and Oregon.
The case is being handled by the Office’s Civil Frauds Unit. Mr. Bharara established the Civil Frauds Unit in March 2010 to bring renewed focus and additional resources to combating healthcare and other types of frauds. Assistant U.S. Attorneys Li Yu and Jean-David Barnea are in charge of the case.
Los Angeles Art Dealer Sentenced to Federal Prison for Smuggling Stolen Antiquities and Overseeing Charitable Deduction Tax ScamRead the Press Release
LOS ANGELES – A Los Angeles art dealer has been sentenced to 18 months in federal prison for conspiring to smuggle looted archeological resources into the United States, and then using those antiquities as the basis of a charitable donation tax fraud scheme involving local museums.
Jonathan M. Markell, 70, a resident of the Westchester district of Los Angeles and who is the owner of Silk Roads Design Gallery (which previously was located on North La Brea Avenue and now operates in the Jefferson Park district of Los Angeles), was sentenced Monday afternoon by United States District Judge Dean D. Pregerson, who called Markell’s crimes “significant.”
In issuing the prison sentence, Judge Pregerson said it was “important to send a message” to art collectors, gallery owners and museums that they should avoid collecting and trading looted antiquities.
Markell previously pleaded guilty to conspiring to smuggle stolen antiquities into the United States by making false declarations to U.S. Customs authorities. In a second case, Markell pleaded guilty to conspiring to commit tax fraud. Markell admitted smuggling antiquities from Burma, Thailand, Cambodia and China into the United States for sale in his art gallery. Markell knew that many of the antiquities had been looted from the site of an ancient civilization located in Ban Chiang, Thailand – which the United Nations Educational, Scientific and Cultural Organization (UNESCO) has designated this site as a “World Heritage” site. An expert on Southeast Asian archaeology testified in court on Monday that the looting of the Ban Chiang sites – which are thousands of years old – to supply galleries like Markell’s was “devastating to the archeology of Thailand.”
“Mr. Markell’s greed placed his art gallery’s profits above the culture and heritage of the people of Thailand,” said United States Attorney Eileen M. Decker. “Not only did he play a significant role in the international trade of looted artifacts, Markell also participated in a scheme designed to illegally provide tax deductions to art collectors.”
Once in possession of the looted antiquities in the United States, Markell engaged in a tax fraud scheme by promoting and participating in a false charitable deduction scheme. After obtaining the Thai antiquities, most of which were from the Ban Chiang culture, Markell bundled the antiquities into “charitable donation packages” that were donated to charitable institutions such as museums and universities. Markell prepared fraudulent appraisals in order to falsely inflate the value of the antiquities, which he provided to co-conspirators, who used the fraudulent documents to claim inflated charitable donation tax deductions.
Markell’s wife, 68-year old Carolyn Markell, was also sentenced Monday afternoon for her role in the tax fraud conspiracy. In addition to being ordered to pay restitution to the Internal Revenue Service for fraudulent tax deductions, she and her husband were also ordered to repatriate 337 antiquities seized from their residence and gallery to Thailand, Burma, Cambodia and China.
“It is individuals such as Jonathan Markell – the importers, the buyers and the gallery owners who purchase and acquire such archeological resources or wildlife products for profitable resale who are primarily to blame for the underlying devastation, for these are the individuals who create the markets that create the monetary incentives that drive the poachers and looters into the field,” prosecutors wrote in a sentencing memorandum filed with the court.
This case was investigated by the National Park Service, U.S. Immigration and Customs Enforcement – Homeland Security Investigation, and IRS Criminal Investigation.
Long Island Pediatrician Sentenced to 30 Years’ Imprisonment for Sexual Exploitation of ChildrenRead the Press Release
Earlier today, Rakesh K. Punn, a licensed medical doctor and pediatrician, was sentenced to thirty years’ incarceration, lifetime supervised release, and sex offender registration for sexual exploitation of children. Today’s sentencing took place before United States District Judge Joanna Seybert.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.
“Doctor Punn abused the trust of the community, parents, and his patients. He betrayed his oath as a licensed physician to do no harm and instead victimized children for his own sexual purposes.” Mr. Capers thanked the Federal Bureau of Investigation, the Nassau County District Attorney’s Office, the Nassau County Police Department, and the Department of Justice Criminal Division’s Child Exploitation and Obscenity Section (“CEOS”) and High Technology Investigative Unit for their joint investigation leading up to this case.
“Doctors swear an oath to do no harm, but this defendant perverted his job as a physician in the most despicable ways by drugging and then sexually abusing young girls while they were unconscious. Thanks to the efforts of our federal partners and Nassau prosecutors, this defendant will spend decades behind bars,” stated Acting DA Madeline Singas.
Between September 6, 2007 and January 21, 2008, Punn sexually exploited three minor pediatric patients, under the guise of medical treatment, at his home-office in Bethpage, New York, and recorded the activities. Punn lied about diagnoses for these children so he could have access to them without their parents being present, drugged them, and secretly photographed them. Punn also submitted fraudulent insurance claims for the purported treatment of the three children and three other pediatric patients, when, in fact, the purported treatments had not been conducted for any medically accepted purpose, but rather, solely for the sexual gratification of the defendant.
Nassau County law enforcement authorities initially arrested Punn on July 15, 2010, and subsequently filed an indictment that charged Punn with multiple counts of violating New York State sexual abuse and fraud laws based on his conduct, which allegedly included recording sexually explicit activity involving his minor patients during their visits to his office. On September 5, 2014, Punn pleaded guilty in Nassau County Court to two counts of criminal sale of a prescription for a controlled substance and one count of first-degree sexual abuse. He awaits sentencing on those charges. On January 4, 2012, a federal indictment was filed that charged Punn with sexual exploitation of children and health care fraud. Punn has remained in custody since his initial arrest.
This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The government’s case was prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Allen L. Bode and Department of Justice Trial Attorney Amy Larson are in charge of the case.
The Defendant:
RAKESH K. PUNN
Age: 57
Bethpage, New YorkE.D.N.Y. Docket No. 12-CR-0011(JS)
Lewiston Woman Sentenced to Nine Years for Transporting a Minor for ProstitutionRead the Press Release
Contact: Julia M. Lipez
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Shawna Calhoun, 25, of Lewiston, Maine was sentenced today in U.S. District Court by Judge Jon D. Levy to nine years in prison and five years of supervised release for transporting a minor in interstate commerce with the intent that she engage in prostitution. She pleaded guilty on July 29, 2015
Court records reveal that on December 23, 2014, Calhoun and Alvin Houston, Jr. obtained a rental car in Maine and used it to drive a 13-year old girl and another individual from Maine to Boston, Massachusetts, where they stayed with Calhoun’s family. While there, Calhoun and Houston drove the 13-year old girl to various hotels in the Boston area to engage in prostitution. On December 30, 2014, Calhoun and Houston learned that the Federal Bureau of Investigation (FBI) was looking for the minor. They drove her in the rental car back to Maine and ultimately to Bangor, so that she could again engage in prostitution. Early in the morning on December 31, 2014, Calhoun and Houston drove the minor to a hotel in the Bangor area so that she could meet with a client for the purposes of prostitution. The purported client turned out to be a member of law enforcement. Calhoun and Houston were arrested outside in the parking lot, where they were waiting in the rental car.
This case was investigated by the FBI, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Human Trafficking Task Force, the Lisbon and Bangor Police Departments, and the Maine Drug Enforcement Agency.
Leader of Drug Trafficking Organization Sentenced to 15 Years in Prison for Conspiring to Sell Kilograms of Heroin in New JerseyRead the Press Release
TRENTON, N.J. – A leader of a large-scale drug trafficking organization was sentenced today to 15 years in prison for conspiring to distribute heroin in Ocean and Monmouth counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.
Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” 42, of Asbury Park, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiring to distribute 100 grams or more of heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
To date, 19 other alleged members or affiliates of the “Britt-Young Drug Trafficking Organization” – so named after its leaders, Young and Robert Britt, a/k/a “True,” in the criminal complaint – have pleaded guilty to narcotics offenses.
According to documents filed in this case and statements made in court:
Between February 2013 and March 2014, Young conspired with others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. Young was a leader of the organization and was responsible for, among other things, supplying heroin to various sub-dealers who distributed the heroin to others. To carry out Britt-Young DTO’s drug trafficking business, Young maintained several stash house locations that he and his conspirators used to package, store and sell heroin, including a recording studio in Toms River and two apartments in Neptune, New Jersey. Young was responsible for distributing between one and three kilograms of heroin during the conspiracy.
In addition to the prison term, Judge Sheridan sentenced Young to four years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Richard M. Frankel; officers of the Brick Township Police Department, under the direction of Chief Nils R. Bergquist: and officers of the Toms River Police Department, under the direction of Chief Mitchell Little, with the investigation. He additionally credited special agents of the Bureau of Alcohol Tobacco Firearms and Explosives, under the direction of Special Agent in Charge George P. Belsky; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; officers of the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccioni; and officers of the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato. He also thanked the Monmouth County Sheriff’s Office and the Neptune Township, Asbury Park, Marlboro, Long Branch and Freehold police departments for their roles in the case.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Stacy A. Biancamano Esq., West Orange, New Jersey
Last Perry Housing Projects Drug Trafficker ConvictedRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Dallas McLamore, 30, of Buffalo, NY, pleaded guilty to conspiracy to distribute 280 grams or more of crack cocaine within 1000 feet of the Perry Housing Projects before U.S. District Judge Lawrence J. Vilardo. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life and a fine of $10,000,000.
“With the last of the Perry Housing Projects drug traffickers now convicted, we are pleased to return the entire complex to its rightful tenants,” said U.S. Attorney Hochul. “With the continuing assistance and cooperation of the tenants, we are also able to ensure such criminals will never return.”
Assistant U.S. Attorneys Timothy C. Lynch and Michael J. Adler, who are handling the prosecution, stated that the defendant was part of a narcotics trafficking ring headed by Tyshawn Bradley that operated primarily in the Perry Housing Projects in Buffalo. Bradley’s organization maintained several apartments on the grounds of the projects, operated by the Buffalo Municipal Housing Authority, where members of Bradley’s organization, including the defendant, sold crack cocaine on a daily basis.
The defendant was arrested along with nine others on April 3, 2013 following the execution of search warrants several locations in the City of Buffalo and Cheektowaga, including at 124 Fulton Street and 305 Perry Street, which are located at the Perry Housing Projects. During the searches at the Perry Housing Projects, officers recovered over 300 grams of crack cocaine and 700 grams of powered cocaine as well as a sawed-off, 9mm semiautomatic rifle.
To date, all 10 defendants have been convicted.
Today’s plea is the culmination of an investigation on the part of the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent in Charge Adam S. Cohen. The task force includes representatives of the Amherst Police Department; the Buffalo Police Department; U.S. Border Patrol, the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Cheektowaga Police Department; the Erie County Sheriff’s Department; the Hamburg Police Department; the Lancaster Police Department; the Niagara Frontier Transportation Authority Police; the New York State Department of Correctional Services; the New York State Police; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations. Additional assistance was provided by the Drug Enforcement Administration; U.S. Customs and Border Protection, the United States Marshal Service, the Lackawanna Police Department, and the Niagara County Sheriff’s Department.Sentencing is scheduled for March 30, 2016 at 10:00 a.m. before Judge Vilardo.
Las Cruces Man Pleads Guilty to Federal Narcotics Trafficking ChargesRead the Press Release
ALBUQUERQUE – George Ventura, 46, of Las Cruces, N.M., pleaded guilty yesterday afternoon in federal court in to cocaine trafficking charges under a plea agreement with the U.S. Attorney’s Office.
Ventura and his co-defendant Luis Cipriano, 42, also of Las Cruces, were charged in a four-count indictment on May 20, 2015, with a conspiracy charge and three cocaine distribution charges. According to the indictment, Ventura and Cipriano conspired to distribute cocaine from Aug. 5, 2014 through Nov. 13, 2014 in Doña Ana County, N.M. The indictment also charged Cipriano with distributing cocaine on Aug. 5, 2014 and on Oct. 10-11, 2014, and Ventura and Cipriano with distributing cocaine on Sept. 8, 2014.
During his change of plea hearing, Ventura pled guilty to participating in a cocaine distribution conspiracy and to distributing cocaine on Sept. 8, 2014. In entering his guilty plea, Ventura admitted that the cocaine he distributed on Sept. 8, 2014, was subsequently distributed to a person who unbeknownst to him was an undercover agent.
At sentencing, Ventura faces a maximum penalty of 20 years in federal prison followed by not less than three years of supervised release. Under the terms of his plea agreement, Ventura will forfeit $7,600.00, which represents the profits he derived from the drug trafficking offenses charged in the indictment. Ventura remains in custody pending a sentencing hearing which has yet to be scheduled.
Cipriano has entered a not guilty plea to the indictment, and is in custody pending trial which is currently scheduled for Jan. 2016. Charges in indictments are merely accusations and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Las Cruces office of the DEA and is being prosecuted by Assistant U.S. Attorney Luis A. Martinez of the U.S. Attorney’s Las Cruces Branch Office.
Las Cruces Man Pleads Guilty to Federal Cocaine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Gilbert G. Caldwell, 24, of Las Cruces, N.M., pleaded guilty yesterday afternoon in federal court to a cocaine trafficking charge. Under the terms of his plea agreement, Caldwell will be sentenced to ten years in federal prison followed by a term of supervised release to be determined by the court.
Caldwell was arrested in Feb. 2015, and charged by criminal complaint with attempting to possess cocaine with intent to distribute. According to the complaint, Caldwell attempted to purchase 125 grams of cocaine from undercover law enforcement agents on Feb. 12, 2015, in Doña Ana County, N.M. Caldwell was subsequently indicted on the same charge on May 28, 2015.
During yesterday’s proceedings, Caldwell pled guilty to the indictment. Caldwell admitted meeting with a person who unbeknownst to him was an undercover narcotics agent at the Sunland Park Casino on Feb. 12, 2015. Caldwell gave the undercover agent $4,500.00 in exchanged for a white powdery substance that he believed was cocaine but was in fact fake cocaine. Caldwell made the purchase with the intention of selling cocaine to others.
Caldwell remains in federal custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the DEA and is being prosecuted by Assistant U.S. Attorney Luis A. Martinez of the U.S. Attorney’s Las Cruces Branch Office.
Kenner Man Sentenced to Life Imprisonment for Murder-For-Hire ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that NEMESSIS BATES, a/k/a “Nemo,” age 37, of Kenner, was sentenced today for his role in the conspiracy and murder-for-hire plot related to the death of Christopher “Tiger” Smith.
After a four-day jury trial beginning on June 4, 2015, a jury found BATES guilty solicitation to commit a crime of violence, use of interstate commerce facilities in the commission of murder-for-hire, causing death through the use of a firearm, and conspiracy to possess firearms.
U.S. District Judge Sarah S. Vance sentenced BATES to life imprisonment. Additionally, BATES was sentenced to 240 months for solicitation to commit a crime of violence and conspiracy to possess firearms in furtherance of a crime of violence. All sentences are to be served concurrently. Judge Vance also imposed $10,644.10 in restitution.
Co-defendant Aaron Smith previously pled guilty in this matter and is awaiting sentencing. Co-defendant Walter Porter is expected to go to trial in 2016.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and detectives of the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorneys Elizabeth Privitera and Gregory Kennedy are in charge of the prosecution.
Justice Department Settles Sex Discrimination Lawsuit Against the Chicago Board of EducationRead the Press Release
The Department of Justice announced today that it has reached a settlement with the Chicago Board of Education, which oversees the third largest school district in the United States, to resolve allegations that the board discriminated against pregnant teachers in violation of federal law.
The civil lawsuit, filed on Dec. 23, 2014, in federal district court in Chicago, alleged that the board engaged in a pattern or practice of discrimination against pregnant teachers employed at Scammon Elementary School by subjecting them to terminations because of their pregnancies. The board’s actions violated Title VII of the Civil Rights Act of 1964, according to the department’s complaint. Title VII is a federal statute that prohibits employment discrimination on the basis of sex, race, color, national origin and religion. Federal law explicitly prohibits employers from discriminating against female employees due to pregnancy, childbirth or related medical conditions.
“Today, the Chicago Board of Education takes an important step toward ensuring that no woman loses her job, faces discipline or endures threats because of her pregnancy,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Our settlement establishes critical measures to provide a workplace environment free from sex-based discrimination.”
Under the terms of the settlement agreement, which must be approved by the district court, the board must change its personnel policies to guard employees against discrimination on the basis of sex and pregnancy; establish training requirements for supervisors and staff that reinforce its commitment to providing a workplace environment free of sex-based discrimination; and pay $280,000 in back pay and compensatory damages to eight women harmed by the practices challenged by the department.
The department brought this lawsuit as a result of a joint effort to enhance collaboration between the Equal Employment Opportunity Commission (EEOC) and the Department’s Civil Rights Division for vigorous enforcement of Title VII. “Stronger policies and training to prevent pregnancy discrimination are critical to the economic security of women and their families,” said Chair Jenny R. Yang of EEOC. “Firing a woman because she is pregnant is simply against the law and EEOC remains committed to vigorous enforcement of the law.”
The Chicago District Office of EEOC investigated charges of discrimination made by Scammon teachers. After finding reasonable cause that discrimination occurred, EEOC attempted to resolve the charges before referring them to the Department of Justice for litigation.
“That a public school engaged in a pattern of firing teachers because of their pregnancies is dismaying to say the least,” said Director Julianne Bowman of EEOC’s Chicago District. “This settlement puts in place meaningful measures to eradicate the kind of antiquated thinking that resulted in the loss of these dedicated female educators from Scammon Elementary School.”
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division. Additional information on the Civil Rights Division’s work is available on its website at www.justice.gov/crt/. EEOC has made addressing pregnancy discrimination a strategic enforcement priority, and last year issued updated guidance available at www.eeoc.gov/laws/types/pregnancy_guidance.cfm.
Chicago Board of Education Settlement Agreement
Johnston City Resident Sentenced for Methamphetamine OffensesRead the Press Release
On December 10, 2015, Krystle N. Statler, 28, of Johnston City, was sentenced for methamphetamine related offenses, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Statler, who had previously pled guilty to a two-count indictment charging conspiracy to manufacture methamphetamine and possessing pseudoephedrine knowing that it would be used to manufacture methamphetamine, was sentenced to 54 months in federal prison, to be followed by 3 years’ supervised release, and fined $600.
The offenses occurred between 2012 and November 2014, in Williamson, Jackson, and Franklin Counties. Evidence at the plea and sentencing hearings established that Statler was involved with others in obtaining pseudoephedrine and manufacturing methamphetamine. On April 17, 2013, Statler traveled to Carbondale with two other persons to obtain pseudoephedrine.
The investigation was conducted by the Southern Illinois Enforcement Group and the Marion Police Department. The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Jackson Man Sentenced to 96 Months in Federal Prison for Possession of a Firearm by a Convicted FelonRead the Press Release
Jackson, Miss – Recardeo Harris, 32, of Jackson, was sentenced today by U.S. District Judge Henry T. Wingate to 96 months in federal prison followed by three years of supervised release for possession of a firearm by a convicted felon, announced U.S. Attorney Gregory K. Davis. Harris was also ordered to pay a $1500 fine.
Judge Wingate further ordered the forfeiture to the United States of all firearms and ammunition involved in or used in the commission of the offense, including: One Sig Sauer, Model P250, 9mm caliber semi-automatic pistol; One Browning Arms .22 caliber semi-automatic long rifle; One Smith &Wesson, 9mm caliber semi-automatic pistol; 13 rounds of 9rnm Western Cartridge Company brand ammunition; Nine rounds of .22 caliber Remington brand ammunition; 16 rounds of 9mm Brazilian Cartridge brand ammunition; 193 assorted rounds of ammunition; and 15 rounds of 9mm Federal brand ammunition.
Harris was indicted on August 4, 2015 as part of the Jackson Violent Crime Initiative - a joint initiative between federal, state and local law enforcement agencies who are working together to reduce violent crime in the city of Jackson and to remove violent offenders from the streets of this community. The Initiative is an ongoing operation aimed at making the streets of Jackson and the surrounding communities safe for all citizens. Jackson Violent Crime Initiative partners include the Jackson Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Federal Bureau of Investigations (FBI), Drug Enforcement Administration (DEA), U.S. Marshals Service, Homeland Security Investigations, U.S. Postal Inspection Service, and U.S. Secret Service.
This case was initiated by the U.S. Marshal's Fugitive Task Force and investigated by the Bureau of Alcohol Tobacco Firearms and Explosives. Assistant U.S. Attorney John M. Dowdy, Jr. prosecuted the case.
Indictment: Teller in Coffey County Embezzled $700,000 from BankRead the Press Release
TOPEKA, KAN. - A former teller for a bank in Burlington has been indicted on charges of embezzling approximately $700,000 from the bank, U.S. Attorney Barry Grissom said today.
Denise Christy, 47, Burlington, Kan., is charged with one count of embezzlement, six counts of making false bank entries, six counts of filing false tax returns and 10 counts of money laundering.
The indictment alleges the crimes were committed while Christy worked as a retail financial services representative and backup vault teller for the Burlington branch of Central National Bank. One of Christy’s duties was to sell cash in the bank’s vault to the Federal Reserve Bank. In May 2014 auditors determined that more than $700,000 was missing from the vault. Christy falsely claimed the money was shipped to the Federal Reserve Bank via the Garda security company. An investigation showed Christy falsified bank records to cover up the embezzlement and failed to report the embezzled funds as part of her income. In addition, she unlawfully conducted financial transactions in order to spend more than $77,000 in embezzled funds to pay off loans that she and her husband maintained at Farmers State Bank in Aliceville, Kan.
Upon conviction, the crimes carry the following penalties:
Embezzlement: A maximum penalty of 30 years in federal prison and a fine up to $1 million.
Making false bank entries: A maximum penalty of 30 years in federal prison and a fine up to $1 million on each count.
False tax returns: A maximum penalty of three years and a fine up to $100,000 on each count.
Money laundering: A maximum penalty of 20 years and a fine u8p to $50,000 on each count.
The Internal Revenue Service investigated. Assistant U.S. Attorney Rich Hathaway is prosecuting.
OTHER GRAND JURY INDICTMENTS
Richard Alan Watson, 57, Topeka, Kan., is charged with one count of attempted bank robbery.
The indictment alleges that on Dec. 1, 2015, Watson attempted to rob U.S. Bank at 3600 S.W. Topeka Boulevard in Topeka.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
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James Carter Heard, Jr., 44, Opelika, Ala., is charged with one count of failing to register as required by the federal Sex Offender Registration and Notification Act. The crime is alleged to have occurred from March 2 to December 3, 2015, in Kansas.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The U.S. Marshals Service investigated. Assistant U.S. Attorney Christine Kenney is prosecuting.
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Jeremiah L. Johnson, 37, Topeka, Kan., is charged with escaping from custody at the Mirror, Inc., Residential Reentry Center in Topeka, Kan. The crime is alleged to have occurred Sept. 22, 2015.
If convicted, he faces a maximum penalty of five years and a fine up to $250,000. The U.S. Marshals Service investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
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Juan Manuel Vasquez-Montalvo, 48, Topeka, Kan., and Francisco Javier Villalobos-Citalan, 40, are charged with one count of conspiracy to distribute methamphetamine. In addition, Villalobos-Citalan is charged with five counts of distributing methamphetamine. The crimes are alleged have occurred at various times from Aug 2015 to December 2015 in Shawnee County, Kan.
Upon conviction, the conspiracy count carries a penalty of not less than 10 years and a fine up to $10 million. The distribution counts carry a penalty of not less than five years and not more than 40 years and a fine up to $5 million on each count. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Indiana Man Pleads Guilty to Federal Charge of Failure to Register as A Sex OffenderRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Ricardo Lamont Irvine (42, Evansville, Indiana) has pleaded guilty to failing to register as a sex offender after traveling from Indiana to Florida. He faces up to 10 years in federal prison and a $250,000 fine. Irvine was arrested in Jacksonville on September 22, 2015, and has remained in federal custody. A sentencing date has not yet been set.
According to the indictment, on or about November 4, 1996, Irvine was convicted of child molestation in Evansville, Indiana. Subsequent to his conviction, and between June 8, 2015, and September 14, 2015, Irvine traveled from Indiana to Florida but failed to register as a sex offender as required by the Sex Offender Registration and Notification Act.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act provides for the use of federal law enforcement resources, including the United States Marshals Service, to assist state and local authorities in locating and apprehending non-compliant sex offenders.
This case was investigated by the United States Marshals Service, the Jacksonville Sheriff’s Office, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Idabel Man Sentenced to Life, Funeral Expenses and $20,000 Fine for Beating Death of Two Year Old GirlRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma, announced that DAKOTA LANE WILLISTON, age 20, of Idabel, Oklahoma was sentenced in federal court today to life without the possibility of release in connection with the 2013 beating death of a two-year-old girl from Idabel, Oklahoma.
WILLISTON, a member of the Choctaw Nation of Oklahoma, was indicted in December 2014 with Murder in the First Degree in Indian Country Committed During the Perpetration of Child Abuse, in violation of Title 18, United States Code, Sections 1111, 1151 and 1153. After a seven-day trial in June, 2015, a federal jury deliberated approximately three and one-half hours before finding Williston guilty beyond a reasonable doubt in the unlawful killing of Payton Cockrell, a 2-year-old, non-Indian female, during the perpetration of child abuse, as defined by Title 18, United States Code, Section 1111(c)(3).
The charge arose from an investigation conducted by the Federal Bureau of Investigation, the Oklahoma State Bureau of Investigation, the McCurtain County Sheriff’s Office and the Choctaw Nation Tribal Police. The case was tried in federal court because the crime occurred at Williston’s family home located on a restricted Choctaw allotment. WILLISTON and the victim were not related.
The toddler was the daughter of WILLISTON’S live-in girlfriend. According to testimony at trial, on the morning of July 23, 2013, WILLISTON insisted his girlfriend leave the child with him instead of taking her to day care. The child was fine when the mother left for work and the child remained in the sole care of WILLISTON. At about noon, Williston and his family called 911 when he claimed he awoke to find the child unresponsive. The child was pronounced dead shortly after arriving at the hospital. Medical experts at trial testified that the toddler suffered extensive fatal injuries to her torso and head as a result on blunt force trauma. Every internal organ was damaged and she suffered massive internal injuries and bleeding.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the sentencing and trial. In addition to the life sentence, Judge White also imposed restitution for the funeral expense and a $20,000 fine. Assistant United States Attorneys Dean Burris and Linda Epperley represented the United States.
The defendant was remanded into the custody of the United States Marshal Service pending transportation to the designated federal facility at which he will serve his nonparoleable sentence.
Home Health Care Agency Owner Sentenced to 80 Months for Directing Detroit-Area Medicare Fraud SchemeRead the Press Release
The owner and operator of a Detroit-area home health care agency who directed a $7 million health care fraud scheme was sentenced today to 80 months in prison.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.
Amer Ehsan, 44, of Canton, Michigan, was sentenced by U.S. District Judge Paul D. Borman of the Eastern District of Michigan, who also ordered Ehsan to pay $4,567,967.12 in restitution.
In connection with his guilty plea, Ehsan admitted that as he owner and operator of Advance Home Health Care Services Inc. (Advance), a home health care agency in the Detroit area, he conspired with physicians, physical therapists and patient recruiters to bill the Medicare program for unnecessary home health care and therapy services and that he paid co-conspirator physicians to refer Medicare beneficiaries to Advance and sign medical documents falsely certifying that they required home health care. Ehsan also admitted that at his direction, Medicare beneficiaries received cash kickbacks in exchange for signing multiple blank physical therapy records.
Additionally, Ehsan admitted that he owned and controlled Michigan Rehab and Management Services LLC, which he used to sell information about Medicare beneficiaries and corresponding fictitious patient files to other Detroit-area home health care agencies. Medicare paid a total of more than $4.5 million as a result of Ehsan’s conduct with these two companies.
Ehsan was part of a wide-ranging scheme that involved 12 defendants, all of whom have pleaded guilty.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan. Trial Attorney Elizabeth Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Katherine Wagner and Special Trial Attorney Katie R. Fink of the Eastern District of Michigan prosecuted this case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, HHS’ Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Hendersonville Attorney Pleads Guilty in $2.2M Real Estate Closing SchemeRead the Press Release
Garry Christopher Forsythe, 42, of Hendersonville, Tenn., pleaded guilty on December 11th to wire fraud, announced United States Attorney David Rivera. Forsythe, a licensed Tennessee lawyer and former owner of Forsythe Title and Escrow, a real estate closing company with offices in Nashville, Brentwood, Hendersonville, and other locations, admitted to misusing escrow funds provided by real estate buyers and lenders.
During a hearing today before U.S. District Court Judge Aleta A. Trauger, Forsythe acknowledged that he had violated his duty to maintain funds that had been provided by real estate buyers and lenders in escrow, and to use such funds only to pay the expenses of the specific real estate transaction for which they were provided. Forsythe further admitted that, after shortages developed in Forsythe Title escrow accounts, he concealed these shortages from buyers and lenders and used funds that had been provided by buyers or lenders to pay expenses for unrelated real estate closings, and for other purposes. The total amount of escrow shortages was at least $2,249,000.
Forsythe further acknowledged that his title company was able to continue operating despite the shortage of escrow funds while the real estate market remained strong, as Forsythe Title continued to receive funds from buyers and lenders that could be used to cover the shortfall, but that once the real estate market slowed, his company lacked the funds to pay the closing expenses of various buyers and lenders that had already provided funds. As a result, checks written by Forsythe Title to finalize home purchases and to pay other expenses relating to buyers’ real estate transactions bounced due to insufficient funds in the Forsythe Title escrow accounts.
Forsythe faces up to 20 years in prison and a fine of up to $250,000, as well as forfeiture of the proceeds of his crime. Forsythe will be sentenced by Judge Trauger on March 18, 2016. The sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorneys William F. Abely and Cecil W. VanDevender.
Harrisburg Man Charged with Heroin Distribution and Possession of A Weapon in Furtherance of A Drug Trafficking CrimeRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal Grand Jury in Harrisburg has returned an indictment charging Peter Fragoso, age 18, with distribution of heroin and the possession of a weapon in furtherance of a drug trafficking crime. Fragoso, a resident of Dauphin County, is also charged with possessing a firearm with an obliterated serial number.
According to United States Attorney Peter Smith, Fragoso was arrested while allegedly participating in a drug trafficking transaction in Harrisburg in June 2015.
This matter was investigated by the Pennsylvania State Police and the Federal Bureau of Investigation. Prosecution has been assigned to Assistant U.S. Attorney Chelsea Schinnour.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes.
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 life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Gretna Man Sentenced for Transferring False Social Security CardsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that FROILAN IGNACIO MIRANDA-RAMOS, age 30, of Gretna, was sentenced today after pleading guilty to four counts of transferring false Social Security Cards in violation of Title 18, United States Code, Section 1028(a)(2).
U.S. District Judge Sara S. Vance sentenced MIRANDA-RAMOS to time served. MIRANDA-RAMOS will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, MIRANDA-RAMOS sold counterfeit Social Security Cards on four separate occasions to confidential informants working with the Department of Homeland Security.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis was in charge of the prosecution.
Grand Junction Business Owner is Sentenced for Income Tax EvasionRead the Press Release
DENVER – Michael E. Ho, age 69, of Grand Junction, Colorado, was sentenced earlier this week by U.S. District Court Judge Christine M. Arguello to serve 24 months in federal prison, followed by 3 years of supervised release, income tax evasion, United States Attorney John Walsh and IRS Criminal Investigation Acting Special Agent in Charge Steven Osborne announced. Judge Arguello also order Ho to pay $202,442 in restitution to the Internal Revenue Service. Ho was indicted by a federal grand jury in Denver on October 28, 2014, pled guilty on July 28, 2015 and was sentenced on December 14, 2015.
According to the indictment and stipulated facts contained in the plea agreement, Ho owned and managed a dental clinic formerly known as Skyline Dental, located in Grand Junction, Colorado, from approximately 1999 through at least 2004 in which he employed licensed dentists to provide dental services to patients. Skyline Dental operated as a “d/b/a” for the parent corporation “Five-O Enterprises” which HO owned and controlled starting in the year 2001. In February of 2004, the State Board of Dental Examiners enjoined Ho from owning and operating Skyline Dental Clinic because Ho was never licensed to practice dentistry and the State Board took the position that only licensed dentists are permitted to own Dental Clinics.
Ho sold the practice in December 2004 to a licensed Dentist and Ho was hired to manage the clinic. In 2006, Ho and the owner had a business dispute which resulted in the dentist defaulting on his purchase agreement with Ho. Ho then sold the practice to a different dentist in November of 2006 for $3.5 million. Ho was then paid a salary for managing the dental practice. In 2010, the Dentist rescinded his contracts with Ho. Ho in turn converted Skyline Dental clinic to a non-profit corporation, Colorado Community Dental Services “CCDS”, which allowed it to operate under state law without a dentist as its owner. An Asset Purchase Agreement was executed between Five-O Enterprises and CCDS in the amount of $2 million. Ho continued to manage Colorado Community Dental Services but did not receive a salary and did not hold a position on the Board of Directors.
During this same period, Ho also operated Preventative Dental as a d/b/a of Five-O Enterprises which sold dental plans to individuals and were then able to receive discounted dental services by the designated provider, Skyline Dental and later Colorado Community Dental Services. Ho received the income from Preventative Dental.
Ho evaded income tax due and owing by committing affirmative acts of evasion. Between 2006 and 2011, the Government has determined that $202,442 is the total tax due and owing by Ho. In an attempt to evade assessment of taxes by the IRS, Ho took a series of steps to include, but are not limited to, utilizing multiple bank accounts (a personal account and business accounts) which he commingled funds from his various income producing activities making the assessment of tax difficult; he received interest income from the sale of Skyline Dental and did not report the interest income to his accountant in the years 2008 and 2009 when he received interest income of $156,005 and $67,225, respectively; he did not report the income from the sale of discount dental plans to his accountant and thus the income from Preventative Dental was not reported on his tax returns; he deposited cash receipts from Skyline Dental and Colorado Community Dental Services to his personal bank accounts in 2010 and 2011 and did not report the income on his tax returns.
“Intentionally hiding income and assets to avoid paying taxes is criminal tax evasion, pure and simple,” said U.S. Attorney John Walsh. “All Americans have an obligation to pay taxes when those taxes are due and owing. Schemes to avoid that shared obligation by intentionally making records confused and commingled, combined with intentional misrepresentations regarding income and assets, pave the road not just to fines and penalties, but federal prison.”
“For over a decade, Ho took extreme measures to conceal his ownership of the dental business,” said Steven A. Osborne, Acting Special Agent in Charge for IRS Criminal Investigation, Denver Field Office. “However, in the end, our financial investigators followed the money which ultimately lead to a tax evasion conviction.”
This case was investigated by Internal Revenue Service – Criminal Investigation and was prosecuted by Assistant U.S. Attorney Tim R. Neff.
Gloucester County, New Jersey, Man Charged with Producing Child Pornography with Hidden Camera in His BathroomRead the Press Release
CAMDEN, N.J. – A Williamstown, New Jersey, man who was charged on Dec. 4, 2015 with receiving images and videos of child sexual abuse was arrested again this morning by FBI agents on a new charge of producing child pornography, U.S. Attorney Paul J. Fishman announced.
Eric Ziegler, 37, is charged by criminal complaint with producing and receiving child pornography. He is scheduled to appear this afternoon before U.S. Magistrate Judge Ann Marie Donio in Camden federal court.
According to documents filed in this case:
Beginning in February 2015, law enforcement officers learned that a user of an Internet account registered to a Williamstown residence was linked to an online community of individuals who regularly sent and received child pornography via a website that operated on an anonymous online network. Further investigation revealed that Ziegler, who previously worked from home providing technological support to computer users who work for financial institutions, was utilizing the anonymous network to view and receive images of child sexual abuse.
On Dec. 3, 2015, law enforcement officers executed a search warrant at Ziegler’s residence. An initial review of the evidence recovered revealed dozens of computer discs containing images of child sexual abuse, including images and video files of adult men engaged in intercourse with prepubescent girls.
Further review of Ziegler’s computer revealed still images and a video file showing prepubescent girls who were recorded in the first-floor bathroom of Ziegler’s Williamstown home. The images and video file, which focused on the girls’ genitalia, showed them changing into swimsuits and using the bathroom.
The search of Ziegler’s computer also revealed dozens of similar hidden-camera videos of prepubescent females ranging in age from 8 to 12. The videos were recorded in what appear to be fitting rooms, bathrooms and locker rooms. It is unknown at this time if Ziegler made those images himself or obtained them through other means. To date, law enforcement officers have positively identified four minor children who appear in the images and video file recovered from Ziegler’s computer. The investigation regarding the identification of additional victims is ongoing.
Anyone with information regarding possible victims of this activity is urged to contact the FBI in Cherry Hill, New Jersey at 856-795-9556.
The charge of producing child pornography is punishable by a mandatory minimum sentence of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. The count of receiving child pornography is punishable by a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge William F. Sweeney in Philadelphia, with the investigation leading to today’s arrest. U.S. Attorney Fishman also thanked the Monroe Township Police Department under the direction of Chief John McKeown for its assistance with the investigation.
The government is represented by Assistant U.S. Attorney Steven D’Aguanno of the New Jersey U.S. Attorney’s Office Camden Office.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Rocco C. Cipparone Jr. Esq., Haddon Heights, New Jersey
Fugitive Arrested in Miami in Connection with Deaths of Two Migrants in Trunk at San Diego-Tijuana BorderRead the Press Release
Assistant U.S. Attorneys Patrick J. Bumatay (619) 546-8450 and Michael Wheat (619) 546-8437
NEWS RELEASE SUMMARY – December 16, 2015
SAN DIEGO – Suspected alien smuggler Eduard Cornejo-Saavedra, a fugitive being sought in connection with the deaths of two unauthorized immigrants who perished in the trunk of a car last year, was arrested in Miami today.
Saavedra, a 43-year-old citizen of Peru, was taken into custody by Homeland Security Investigations agents at the Miami International Airport on alien smuggling charges related to the August 2014 deaths of Tarcisio Casas-Blanco and Jose Aurelio Quiroz-Casas, both Mexican citizens.
Saavedra was arrested in Tijuana approximately six weeks ago at the request of the United States in connection with this case. Mexican officials sought his deportation and he was ultimately ordered deported to his native Peru. He was en route to Peru from Mexico City today when he was intercepted by U.S. law enforcement.
Saavedra was charged in October of 2014 with alien smuggling. That indictment was unsealed today. The United States is seeking his transfer from Miami to face charges in San Diego.
The smuggling incident in question occurred on August 12, 2014, when Nicholas George Zakov, 43, attempted to transport the two Mexican citizens, Casas-Blanco and Quiroz-Casas, into the United States by hiding them in the trunk of his 2012 Dodge Challenger.
Zakov pleaded guilty to the alien smuggling charges and received a sentence of seven years in prison on September 29, 2015. He has admitted that he drove the Challenger to the San Ysidro, California Port of Entry, where U.S. Customs and Border Protection officers discovered the two Mexican citizens unresponsive in Zakov’s trunk. Medical attention was immediately sought for the two, but they died a short while later of hyperthermia and mechanical asphyxiation.
Zakov also admitted that he continued to drive through the San Ysidro, California Port of Entry while ignoring the two Mexican citizens’ pleas to be let out of the trunk because of the extreme heat.
“This case is an important message to alien smugglers,” said U.S. Attorney Laura Duffy. “We will seek justice for all those that engage in this dangerous and harmful crime.”
“This apprehension demonstrates the importance of working together with our law enforcement partners on both sides of the border,” said Pete Flores, CBP director of field operations for San Diego. “Now this perpetrator may be brought to justice for his part in the death of two human beings.”
The investigation and arrest of Saavedra was the result of the collaboration of Homeland Security Investigations, U.S. Customs and Border Protection, San Diego Police Department, and the Baja California State Preventive Police Department.
Saavedra is charged with two counts of encouraging and inducing illegal aliens resulting in death and two counts of bringing illegal aliens into the United States for financial gain. Saavedra faces up to life imprisonment, a mandatory minimum sentence of three years in prison, and a $250,000 fine.
DEFENDANT Criminal Case No. 14CR3066-AJB
Eduard Cornejo-Saavedra Age: 43 Tijuana, Mexico
a.k.a. Edward Saavedra
a.k.a. Reenzo Saavedra-Cormeyo
SUMMARY OF CHARGES
Counts 1 and 2: Encouraging and Inducing Illegal Aliens, Aiding and Abetting, Resulting in Death, 8 U.S.C. §1324(a)(1)(A)(iv), (v)(II), and (a)(1)(B)(iv)
Counts 3 and 4: Bringing in Illegal Aliens for Financial Gain, Aiding and Abetting 8 U.S.C. §1324(a)(2)(B)(ii) and 18 U.S.C. § 2
INVESTIGATING AGENCIES
U.S. Customs and Border Protection
Homeland Security Investigations
San Diego Police Department
Baja California State Preventive Police Department
Four Orangeburg Men Charged with Illegal Trapping and Killing of Hawks at South Carolina PlantationRead the Press Release
Contact Person: Eric Klumb (843) 727-4381
Columbia, South Carolina ---- United States Attorney William N. Nettles stated today that four Orangeburg men, Charles Williams, age 65, John Dantzler, age 66, Jimmie Aiken, age 56, and Alejandro Renteria Noyola, age 56, have been charged in federal court in Columbia, South Carolina, with the unlawful trapping and killing of migratory birds at Willcreek Plantation, a 1,790-acre tract of land in Orangeburg County owned by Willcreek LLC. Charles Williams, the registered agent for Willcreek LLC, was charged with 7 counts of killing Red-tailed or Cooper’s Hawks during 2013 and 2014; the remaining defendants were each named in a single count. This crime is a violation of the Migratory Bird Treaty Act under Title 16, United States Code, Section 703, and carries a maximum prison term of six months and a fine of up to $15,000, or both, for each count of conviction.
The case was investigated by agents of the United States Fish and Wildlife Service Office of Law Enforcement and the South Carolina Department of Natural Resources. The investigation began in November of 2013 based on a tip from the DNR Operation Game Thief Hotline and culminated with the execution of a search warrant at Willcreek Plantation on February 21, 2014. During the course of the investigation, agents seized more than thirty raptor carcasses from Willcreek Plantation.
Assistant United States Attorney Eric Klumb of the Charleston office is prosecuting the case.
The United States Attorney stated that the charges are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
#####Founder and Portfolio Manager of Canarsie Capital, LLC, Pleads Guilty in Manhattan Federal Court to Securities FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the filing of an Information against OWEN LI, charging him with securities fraud and making a false statement, stemming from LI’s lies to investors and the U.S. Securities and Exchange Commission (“SEC”) regarding the performance of Canarsie Capital, LLC (“Canarsie”) – a hedge fund LI had founded and for which he acted as portfolio manager – which collapsed in January 2015. LI surrendered this morning and pled guilty to the charges before United States Magistrate Judge Frank Maas shortly after the filing of the Information.
In a separate action, the SEC announced civil charges against LI and Canarsie.
U.S. Attorney Preet Bharara said: “As Owen Li has now admitted, he lied to his investors and lied to the SEC. His conduct led to crippling losses for his fund and its investors. Crimes like Owen Li’s taint the entire marketplace and make honest investors wary of investing in securities markets. Thanks to the investigative efforts of the FBI in collaboration with the SEC, Li will be held to account for his deception.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Owen Li’s multiple unlawful actions as a trader finally caught up with him today as he pleaded guilty to securities fraud and making false statements. The FBI will continue to work with our partners in an effort at ensuring that our financial markets are legal, fair, and equitable.”
According to the two-count Information filed today in Manhattan federal court[1]:
LI founded Canarsie in January 2013 with approximately 10 investors and $16.55 million in assets under management. By the end of 2013, Canarsie had approximately $47.75 million in assets under management, and LI earned over $2.2 million that year. LI raised another $16.8 million in 2014, and at the time of its collapse in January 2015, Canarsie had approximately 41 investors and $56.8 million in assets under management.
According to Canarsie’s offering memorandum (the “Offering Memorandum”), which was provided to investors, Canarsie’s portfolio would be balanced and risk would be managed “through limits on position sizing and market exposure.” Generally no position, whether long or short, would exceed 10% of Canarsie’s assets.
LI Reported Fictitious Trades to His Prime Broker
Canarsie reported Canarsie’s trades daily to its prime broker. At the end of each trading day, the prime broker would match Canarsie’s trade report against trade reports submitted by executing brokers who had filled Canarsie’s orders that day. Mismatches of information concerning trades reported by Canarsie and the executing brokers were considered “trade breaks.”
In March and early April 2014, LI began reporting fictitious “sell” trades to Canarsie’s prime broker at that time (“Prime Broker-1”) as if Canarsie had executed the trades, when, in fact and as LI knew, Canarsie had never actually sold the shares in question. On April 9, 2014, Prime Broker-1 discovered multiple instances from March and early April 2014 in which LI had caused Canarsie to report trades that had not in fact been executed. Specifically, Prime Broker-1 noted that LI had engaged in a pattern of reporting sell trades, particularly in shares of Facebook, Inc. (“Facebook”), to Prime Broker-1, and subsequently canceling the sell trades before the settlement date.
As LI knew, Prime Broker-1 calculated Canarsie’s margin requirement on the basis of trade date, not settlement date. LI’s pattern of booking and cancelling “sell” trades temporarily created the false appearance that the long positions in Facebook and other stocks (and thus the leverage in the account) were diminishing. This allowed Canarsie to (a) avoid a margin call from Prime Broker-1, and (b) avail itself of greater leverage than Prime Broker-1 ordinarily would have extended to Canarsie. Therefore, on April 1, 2014, Canarsie’s account was levered approximately eight times, in that it was employing approximately $377 million of margin with equity of approximately $45 million. In addition, LI had accumulated a position in Facebook that exceeded 10% of Canarsie’s total portfolio, in violation of the risk-management parameters set forth in the Offering Memorandum.
In light of those trade breaks, Prime Broker-1, among other things, forbade Canarsie from using margin and insisted that Canarsie hire a second prime broker, suggesting that eventually the second prime broker would become Canarsie’s sole prime broker in lieu of Prime Broker-1. In a meeting with a prospective second prime broker (“Prime Broker-2”), LI did not inform Prime Broker-2’s representatives that (a) Prime Broker-1 had told Canarsie to find a second prime broker, (b) Prime Broker-1 had withdrawn margin, and (c) if Canarsie established a relationship with Prime Broker-2, Prime Broker-2 would be, in essence, the sole prime broker for Canarsie. In August 2014, Canarsie established a prime brokerage account with Prime Broker-2, and conducted virtually all of its trading through that account from that point on.
LI’s Misstatements to Investors About Canarsie’s Performance
At or around the end of each month, LI and others prepared and sent emails to Canarsie’s investors describing the fund’s performance. Those emails contained an estimated net asset value (“NAV”) and monthly return. Canarsie’s administrator (the “Administrator”) emailed each investor a monthly account statement showing the value of his or her investment and Canarsie’s NAV. On at least two occasions, the estimated NAV supplied by LI and emailed to investors by Canarsie differed materially from the Administrator’s NAV, which appeared in the investors’ monthly statements.
In April 2014, Canarsie suffered approximately $13.6 million in losses and was down approximately 23% from the beginning of the month. However, on or about April 30, 2014, LI falsely told at least one investor that performance was down only nine percent. LI then intentionally delayed approving the correct April NAV, as calculated by the Administrator, because it was significantly worse than the NAV he had reported to investors at the end of April, and lied to investors about the reason for the delayed monthly statement and the reason for the discrepancy.
In December 2014, LI again delayed a monthly statement, this time for November 2014. LI did not approve the preliminary November NAV because it showed losses the fund had incurred toward the end of November and trades that LI had deliberately broken and later canceled or amended. Despite repeated requests from the Administrator, LI delayed approving the November NAV until January 8, 2015, falsely telling the Administrator that he had been in the hospital for a week. LI also falsely told investors who inquired about the November statements that they were late because of staffing changes at the Administrator and the Administrator’s focus on preparing for the annual audit.
On January 9, 2015, LI instructed the Administrator to release the November 2014 statements to investors. LI forwarded the statements to others at Canarsie, informing them that the fund’s November 2014 performance had been worse than the estimate Canarsie had provided to investors. LI falsely told others at Canarsie that the discrepancy was due to a residual amount of money transferred from Canarsie’s account at Prime Broker-1 to the account at Prime Broker-2 on or about November 28, 2014, which was not credited to the account at Prime Broker-2 until December 2014.
LI Misled the SEC Examination Staff
On November 5, 2014, members of the SEC’s Office of Compliance Inspections and Examinations Staff (the “Examination Staff”) conducted a phone interview of LI and others at Canarsie. Among other things, the Examination Staff asked why Canarsie appeared to be moving away from Prime Broker-1 as its prime broker, and conducting virtually all trading activity with Prime Broker-2. LI responded that he had contacts at Prime Broker-2 from his prior employment and certain harder-to-cover stocks were easier to locate through Prime Broker-2 than through Prime Broker-1. LI concealed from the Examination Staff that Prime Broker-1 (a) had withheld margin from Canarsie in or about April and May 2014, and (b) suggested that Canarsie move its prime brokerage relationship elsewhere.
On December 3, 2014, the Examination Staff again interviewed LI, and asked about the Facebook trades cancelled in or about April 2014. LI responded that he had assumed that the brokers executed those orders, and had reported those trades to Prime Broker-1 as executed trades based on that assumption. In fact, LI never placed or transmitted those orders to executing brokers. LI concealed from the Examination Staff that he had fraudulently reported those trades as executions to Prime Broker-2 in an effort to conceal the extent of leverage in the fund and the size of the position in Facebook.
LI Caused Catastrophic Losses in the Fund
In December 2014 and January 2015, LI concealed from investors and others at Canarsie the fact that he was trading the fund in violation of the investment mandates in the Offering Memorandum and that, in doing so, he had placed the fund at excessive risk of catastrophic loss.
The fund’s net account value on or about December 31, 2014, was approximately $59.7 million. Beginning in early January 2015, LI began liquidating the equity long positions in the account – resulting in approximately $18 million in losses – and eliminated all short positions in the fund. At the same time, LI bought short-dated long positions in market index options. The result was an entirely long, unhedged portfolio.
On January 16, 2015, index options prices moved against Canarsie’s positions, resulting in losses of approximately $39 million. At the end of the day on January 16, the account was left with no equity, short, or options positions. As a result of LI’s trading, the fund lost substantially all of its assets between on or about December 31, 2014, and on or about January 16, 2015.
* * *
LI, 29, pled guilty to one count of securities fraud and one count of making a false statement. Count One carries a maximum sentence of 20 years in prison. Count Two carries a maximum sentence of five years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the FBI, and thanked the SEC for its assistance.
The charges were brought in connection with the President’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 is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Michael Ferrara is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Information, and the description of the Information set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Fort Worth, Texas, Woman Sentenced to 10 Years in Federal Prison for Using Her Home to Conduct Methamphetamine TransactionsRead the Press Release
FORT WORTH, Texas — A Fort Worth, Texas, woman, Shanda Brite, 28, was sentenced on Monday by U.S. District Judge Reed C. O’Connor to 120 months in federal prison, following her guilty plea in July 2015 to one count of maintaining a drug involved premise, announced U.S. Attorney John Parker of the Northern District of Texas.
According to the factual resume filed in the case, since approximately 2014, Brite has allowed others, including two co-defendants, to conduct methamphetamine transactions at her house on Seal Cove in Fort Worth. In exchange, Brite received methamphetamine.
Other defendants in the case have also received lengthy federal prison sentences for their roles in the methamphetamine distribution conspiracy. Last week, Samuel Hebert was sentenced to 240 months, Joseph Sutton was sentenced to 140 months, and Steven Villegas was sentenced to 120 months, in federal prison. All three are from the Dallas-Fort Worth area.
The Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Texas Department of Public Safety investigated. Assistant U.S. Attorney Shawn Smith was in charge of the prosecution.
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