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Monday 19 October 2015
Sex Offender Detained for Allegedly Violating SORNARead the Press Release
PROVIDENCE, R.I. – Byron Deweldon, 45, of Warwick, has been ordered detained in federal custody on a criminal complaint charging him with failing to register as a sex offender, in violation of the Sex Offender Registration and Notification Act (SORNA).
It is alleged in court documents that Deweldon failed to notify the Warwick Police Department or others of an address change after leaving his Warwick home on September 19, 2015, and traveling to locations in California, Florida, Maryland, Connecticut, Maine and Pennsylvania, all of which have Sex Offender registry statutes. Deweldon has a valid, non-expiring requirement that he register as a sex offender.
Deweldon’s arrest and detention is announced by United States Attorney Peter F. Neronha, U.S. Marshal Jamie A. Hainsworth and Warwick Police Chief Colonel Stephen M. McCartney.
According to court records, Deweldon was convicted in May 1995, in Rhode Island Superior Court, on three counts of second degree molestation; in May 1995, in Massachusetts, of indecent assault and battery on a child under the age of 14; in Rhode Island state court in April 2004, of third degree sexual assault; and in 2008, Deweldon was civilly committed by the Commonwealth of Massachusetts as a danger to the public. He was released on December 18, 2014, and moved into a family member’s home in Warwick.
Deweldon was arrested upon his return to Rhode Island last week by members of the U.S. Marshal’s SORNA Task Force, the U.S. Marshals and the Warwick Police Department.
SORNA provides a comprehensive set of federal standards for sex offender registration and notification in the United States through the nationwide network of sex offender registration and notification programs. Additionally, SORNA requires registered sex offenders to register and keep their registration current in each jurisdiction in which they reside, work, or go to school, and to make periodic in-person appearances to verify and update their registration information.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Severn Man Sentenced to over 11 Years in Prison for Possessing Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Albert A. Firlie, age 67, of Severn, Maryland, today to 135 months in prison followed by supervised release for life for possessing child pornography. Judge Bredar enhanced Firlie’s sentence based upon a 1991 child abuse conviction in Howard County, Maryland involving the sexual abuse of a prepubescent girl. Judge Bredar also ordered that upon his release from prison, Firlie must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Anne Arundel County Police Chief Tim Altomare.
According to Firlie’s plea agreement, beginning no later than October 2003, Firlie obtained child pornography from the internet. In November 2007 and April 2009, he created email accounts with a username that combined his first name with the first name of the victim in his child sex abuse case. Firlie used the internet to try to locate the victim and her family as recently as June 2014.
From December 12, 2008 to December 26, 2014, Firlie uploaded approximately 120 videos depicting minors engaged in sexually explicit conduct, using a website that provided users with remote “cloud” storage for media files. On September 13, 2014, Firlie attempted to upload 51 videos depicting minors engaged in sexually explicit conduct to another email address, using a different website that also provided users with the remote storage. That website detected the use of its cloud services for the storage of child pornography and reported the matter to the National Center for Missing and Exploited Children, who in turn reported the matter to the U.S. Postal Inspection Service.
On February 3, 2015, investigators executed a search warrant at Firlie’s residence recovered a large number of computers and other digital storage media which contained over 600 images, including over 120 videos depicting minors engaged in sexually explicit conduct. The images included prepubescent minors and sadistic or masochistic conduct.
This 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. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Inspection Service, HSI-Baltimore, Maryland State Police and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Zachary A. Myers, who prosecuted the case.
Rochester Man Sentenced on Drug Trafficking and Gun Possession ChargesRead 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 Jose Guerra Caraballo, 43 of Rochester, NY, who was convicted of possession of cocaine with intent to distribute and possession of a firearm in the furtherance of a drug trafficking crime, was sentenced to 15 years in prison Chief U.S. District Judge Frank P. Geraci, Jr. The defendant was also ordered to forfeit two firearms and numerous rounds of ammunition seized at the time of his arrest.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that between November 2014 and January 2015, law enforcement officers investigated Caraballo and his brother, Jose Miguel Guerra. Controlled purchases of cocaine were arranged and completed between Caraballo and another person.On January 21, 2015, a person met Caraballo and Guerra to purchase cocaine, heroin and a firearm. The person was shown the firearm and told that they had to go get cocaine.
Caraballo and Guerra were surveilled leaving the area and then observed entering 264 Clifford Avenue in Rochester. They were subsequently arrested by members of the Rochester Police Department. During the search of the vehicle Caraballo and Guerra were in, officers recovered a ROHM. 38 Special revolver, 12 live rounds of .38 Special ammunition, approximately 12.5 grams of heroin, 33 grams of cocaine, marijuana and new/unused glassine bags.
Later that day, officers executed search warrants at 15 Bardin Street, a residence leased by Guerra, and 264 Clifford Avenue, locations identified during the investigation. Law enforcement recovered various items including, a firearm, ammunition, cash, drugs and drug paraphernalia.
During a post-arrest statement, Guerra told officers he and Caraballo picked up cocaine from a location, later identified to be 264 Clifford Avenue that day. Guerra was convicted of carrying a firearm during and in relation to a drug trafficking.
Today’s sentencing is the culmination of an investigation on the part of Rochester Police Department, under the direction of Chief Michael Ciminelli and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.Randolph County Resident Pleads Guilty to Methamphetamine OffenseRead the Press Release
On October 14, 2015, Randall A. Miller, 25, of Percy, pled guilty to one-count of conspiracy to distribute methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Evidence at the plea hearing established that Miller was involved with others in the distribution of Ice/methamphetamine. The offense occurred between 2013 and June 2015, in Perry, Jackson, and Randolph Counties. During his plea, Miller admitted that he was responsible for the distribution of more than 1.5 kilograms of Ice/methamphetamine. The methamphetamine offense carries a maximum penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Percy Police Department, Steeleville Police Department, Mascoutah Police Department, Illinois State Police Methamphetamine Response Team, DuQuoin Police Department, Pinckneyville Police Department, and Drug Enforcement Administration. The Randolph and Perry County State’s Attorney’s Offices also assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Randolph County Resident Pleads GuiltyRead the Press Release
On October 15, 2015, Jessie J. Sheridan, 34, of Steeleville, pled guilty to a one-count indictment charging conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Evidence at the plea hearing established that Sheridan was involved with others in the manufacture of methamphetamine. The offense occurred between 2013 and June 2014, in Jackson, Randolph, and Perry Counties. The methamphetamine offense carries a maximum penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine. Sheridan is currently being held without bond pending his January 16, 2016, sentencing hearing.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Randolph County Sheriff’s Office and Perry County Drug Task Force.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Owner of Pennsylvania Diet Supplement Business Sentenced to 30 Months Imprisonment for Selling Misbranded Drugs as Weight Loss Products over the InternetRead the Press Release
The U.S. Attorney’s Office of the Middle District of Pennsylvania announced today that Cheryl Floyd, age 52, of Harrisburg, Pennsylvania, owner of Floyd Nutrition LLC, was sentenced to 30 months in federal prison by U.S. District Court Judge Sylvia H. Rambo of the Middle District of Pennsylvania today in Harrisburg for introducing misbranded drugs into interstate commerce and money laundering. Judge Rambo also ordered Floyd to pay $10,000 in fines and $7,530 in restitution.
According to summaries presented to the court by Assistant U.S. Attorney Christy H. Fawcett of the Middle District of Pennsylvania in connection with the guilty plea and the sentencing hearing, Floyd, also known as Cheryl Floyd Brown, was the owner and operator of an internet-based business known as Floyd Nutrition LLC, based at her Harrisburg residence and with warehouse facilities in the Harrisburg area.
The items offered for sale between 2010 and 2014 were purported all-natural dietary supplements sold as weight loss products. They contained the drugs sibutramine and phenolphphthalein which are not listed as ingredients in the product labels.
According to the U.S. Food and Drug Administration (FDA), sibutramine was the active pharmaceutical ingredient in Meridia, a prescription weight loss drug removed from the market in 2010 following studies that showed increased instances of heart attack and stroke in the studied population. Phenolphphthalein was an over-the-county drug until 1999, when the FDA reclassified it as not generally safe because it posed a carcinogenic risk.
As a result of the health risks, the FDA detained shipments of the products coming from China intended for Floyd’s business. In July 2014, search warrants executed at locations used by Floyd’s business resulted in seizure of a large quantity of the products. The products were sold over the internet by Floyd under names such as Slim Trim U, ZXT Slim Bee Pollen, Magic Slim, ZXT Bee Pollen, ZXT Gold Infinity, Lean Body Extreme, Bnew Beauty and Body and Natural Body Solutions.
“Manufacturing and selling products marketed as ‘all-natural’ dietary supplements put U.S. consumers at risk of serious injury or death when they actually contain dangerous pharmaceutical ingredients,” said Director George M. Karavetsos of the FDA Office of Criminal Investigations. “We will continue working with our law enforcement partners to protect consumers from public health risks and fraud.”
“I would first like to commend the United States Attorney’s office and the FDA Office of Criminal Investigations for their fine work on this investigation,” said Special Agent in Charge Akeia Conner of Internal Revenue Service-Criminal Investigation (IRS-CI). “Today’s sentence, along with the seizure of over $1,000,000 in assets, sends a clear message to those considering similar conduct. The Internal Revenue Service-Criminal Investigation stands committed to providing the financial expertise in these investigations and uncovering the flow of money which is the lifeblood of any drug enterprise.”
Floyd pleaded guilty in May 2015 pursuant to a plea agreement that included an agreement to forfeit five properties in Harrisburg owned by the defendant, a 2014 Chevy truck and nine bank accounts. Three of the properties forfeited thus far have netted $1,016,943. Floyd is to surrender to the Federal Bureau of Prisons on Nov. 16, 2015.
This case was investigated by the FDA Office of Criminal Investigations, IRS-CI and the Dauphin County Drug Task Force, and was prosecuted by Assistant U.S. Attorney Fawcett.
Owner of Harrisburg Diet Supplement Business Sentenced to 30 Months Imprisonment for Selling Misbranded Drugs as Weight Loss Products over the InternetRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Cheryl Floyd, age 52, Harrisburg, owner of Floyd Nutrition LLC, was sentenced to 30 months in federal prison by United States District Court Judge Sylvia H. Rambo today in Harrisburg for introducing misbranded drugs into interstate commerce and money laundering. Judge Rambo also ordered Floyd to pay $10,000 in fines and $7,530 in restitution.
According to summaries presented to the court by Assistant U.S. Attorney Christy H. Fawcett in connection with the guilty plea and the sentencing hearing, Floyd, also known as Cheryl Floyd Brown, was the owner and operator of an internet-based business known as Floyd Nutrition LLC, based at her Harrisburg residence and with warehouse facilities in the Harrisburg area.
The items offered for sale between 2010 and 2014 were purported all-natural dietary supplements sold as weight loss products. They contained the drugs sibutramine and phenolphthalein which are not listed as ingredients in the product labels.
According to U.S. Food and Drug Administration (FDA) sibutramine was the active pharmaceutical ingredient in Meridia, a prescription weight loss drug removed from the market in 2010 following studies that showed increased instances of heart attack and stroke in the studied population. Phenolphthalein was an over-the-county drug until 1999 when FDA reclassified it as not generally safe because it posed a carcinogenic risk.
As a result of the health risks, the FDA detained shipments of the products coming from China intended for Floyd’s business. In July 2014, search warrants executed at locations used by Floyd’s business resulted in seizure of a large quantity of the products. The products were sold over the internet by Floyd under names such as Slim Trim U, ZXT Slim Bee Pollen, Magic Slim, ZXT Bee Pollen, ZXT Gold Infinity, Lean Body Extreme, Bnew Beauty and Body and Natural Body Solutions.
“Manufacturing and selling products marketed as ‘all-natural’ dietary supplements put U.S. consumers at risk of serious injury or death when they actually contain dangerous pharmaceutical ingredients,” said George M. Karavetsos, Director, FDA Office of Criminal Investigations. “We will continue working with our law enforcement partners to protect consumers from public health risks and fraud.”
Akeia Conner, Internal Revenue Service, Special Agent in Charge, said “I would first like to commend the United States Attorney’s office and the FDA Office of Criminal Investigations for their fine work on this investigation. Today’s sentence along with the seizure of over $1,000,000 in assets sends a clear message to those considering similar conduct. The Internal Revenue Service, Criminal Investigation stands committed to providing the financial expertise in these investigations and uncovering the flow of money which is the lifeblood of any drug enterprise.”
Floyd pled guilty in May 2015 pursuant to a plea agreement that included an agreement to forfeit five properties in Harrisburg owned by the defendant, a 2014 Chevy truck, and nine bank accounts. Three of the properties forfeited thus far have netted $1,016,943. Floyd is to surrender to the Federal Bureau of Prisons on November 16, 2015.
This case was investigated by the FDA Office of Criminal Investigations, Internal Revenue Service Criminal Investigations, and the Dauphin County Drug Task Force and prosecuted by Assistant U.S. Attorney Christy H. Fawcett.
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New York Man Sentenced to 19 Years Imprisonment for Robberies of Fast Food RestaurantsRead the Press Release
HARRISBURG - The United States Attorney's Office for the Middle District of Pennsylvania announced today that Maurice Lebron Davis, age 40, of Brooklyn, New York was sentenced to 19 years in federal prison by U.S. District Court Judge John E. Jones III today, as a result of his April 2015 conviction of eight counts of robbery or attempted robbery following a four day jury trial in Harrisburg.
According to United States Attorney Peter Smith, Davis was charged in an Indictment by a grand jury in February 2013. Davis robbed or attempted to rob fast food restaurants located in Cumberland, Dauphin and York counties between December 2011 and February 2012. For some of the robberies, Davis broke the drive-thru window and crawled inside, waiting for employees to arrive. For others, Davis accosted employees in the parking lot and forced them to let him into the restaurants. He would then demand they give him money, before fleeing the scene.
These cases were investigated by the Federal Bureau of Investigation, Pennsylvania State Police, and the police departments of Upper Allen, Middlesex, Carroll, Swatara, Lower Allen and Silver Spring Townships, and the Harrisburg Police Department. The case was prosecuted by Assistant United States Attorney Meredith A. Taylor.
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New Britain Man Pleads Guilty to Federal Escape ChargeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMES SCOTT, 37, formerly of New Britain, pleaded guilty today before U.S. District Judge Alvin W. Thompson in Hartford to one count of escape from federal custody.
According to court documents and statements made in court, on February 20, 2009, SCOTT received a federal sentence of 121 months of imprisonment for conspiring to distribute, and distributing, crack cocaine. On June 30, 2015, he was transferred from a federal prison to the Watkinson House Residential Reentry Center in Hartford to complete his sentence. At the time of his transfer to the Watkinson House RRC, SCOTT had a projected release date of December 26, 2015.
On August 14, 2015, SCOTT signed out from the Watkinson House RRC to conduct a job search, but did not return. He was apprehended on October 5, 2015, in Hartford by the U.S. Marshals Service and returned to custody.
Judge Thompson has scheduled sentencing for January 13, 2016, at which time SCOTT faces a maximum term of imprisonment of five years.
This matter was investigated by the U.S. Marshals Service and the Hartford Police Department, and is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Millennium Laboratories to Pay $256 Million to Resolve False Billing and Kickback ClaimsRead the Press Release
BOSTON – Millennium Health, formerly Millennium Laboratories, has agreed to pay $256 million to resolve allegations that it billed Medicare, Medicaid, and other federal health care programs for medically unnecessary drug testing and genetic testing, and provided kickbacks to physicians to induce business. Today’s announcement reflects two False Claims Act settlements between Millennium and the Department of Justice and an administrative settlement agreement between Millennium and the Department of Health and Human Services. Millennium, headquartered in San Diego, Calif., is one of the largest urine drug testing laboratories in the United States.
As part of today’s announced settlements, Millennium has agreed to pay $227 million to resolve False Claims Act allegations that it systematically billed federal health care programs for excessive and unnecessary drug testing from Jan. 1, 2008 through May 20, 2015. (A copy of the United States’ complaint, with exhibits, is available here.) The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being customized for individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs. Millennium’s use of the so-called “custom profile” led to the over-billing of federal health care programs which limit payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury. The United States also alleged that Millennium violated the Stark Law and Anti-Kickback Statute by providing physicians with free drug test cups on the express condition that the physicians return the specimens to Millennium for hundreds of dollars’ worth of additional testing.
Millennium has also agreed to pay $10 million to resolve allegations that it submitted false claims to federal health care programs for medically unnecessary genetic testing that was performed on a routine and preemptive basis, without an individualized assessment of need, from Jan. 1, 2012 through May 20, 2015. Routine genetic testing is not medically reasonable and necessary, and therefore does not qualify for Medicare reimbursement.
“Millennium promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts. “A laboratory which knowingly conducts medically unnecessary testing operates unlawfully and squanders our precious federal health care resources.”
“The Department of Justice is committed to ensuring that laboratory testing, including drug testing, is ordered based on each patient’s medical needs and not for physician or laboratory profit,” said Benjamin Mizer, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “Millennium’s promotion of excessive, non-patient specific test ordering—and its test cup giveaways to physicians to increase that ordering—resulted in significant unnecessary costs being imposed upon our nation’s health care programs.”
“When corporations, such as Millennium, bill Medicare for medically unnecessary tests, they threaten the financial integrity of public healthcare programs,” said Special Agent in Charge Harold H. Shaw of the Boston Division of the Federal Bureau of Investigation. “The FBI hopes this settlement will send a strong message that fraudulent practices by medical labs will not be tolerated.”
In connection with False Claims Act settlements, Millennium has entered into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General.
“This company has taken the first step toward demonstrating a commitment to compliance by agreeing to make significant changes to its board of directors,” said Inspector General Daniel R. Levinson of HHS-OIG. “Most of the board will be comprised of new independent members. Under the five-year CIA, OIG will monitor the company’s compliance efforts under this new leadership.”
Today’s announcement also includes a $19 million settlement between Millennium and the Centers for Medicare and Medicaid Services (CMS) to resolve administrative actions regarding Millennium’s claims to Medicare for certain drug test billing codes. These claims were the subject of claim denials and an overpayment action initiated by CMS and its contractors.
The False Claims Act settlements resolve allegations originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The United States filed its False Claims Act complaint on the urine drug testing allegations after intervening in consolidated complaints filed under the qui tam, or whistleblower provisions of the False Claims Act by Mark McGuire, Ryan Uehling, and Omni Healthcare Inc. The genetic testing allegations were also filed in a qui tam complaint filed by Omni Healthcare Inc. In connection with today’s announced settlements, whistleblowers will receive fifteen percent of the federal recovery from the urine drug testing False Claims Act settlement and sixteen and one half percent of the federal recovery from the genetic testing False Claims Act settlement.
The investigation was conducted by the Federal Bureau of Investigation; the Department of Health and Human Services, Office of Inspector General; CMS; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel and Management, Office of Inspector General; and the United States Postal Inspection Service. The cases were handled by Assistant U.S. Attorneys George Henderson, Abraham George, and Sonya Rao of Ortiz’s Civil Division and Trial Attorneys Douglas Rosenthal and Augustine Ripa of the Justice Department’s Civil Division, Commercial Litigation Branch.
Millennium Health Agrees to Pay $256 Million to Resolve Allegations of Unnecessary Drug and Genetic Testing and Illegal Remuneration to PhysiciansRead the Press Release
Millennium Health, formerly Millennium Laboratories, has agreed to pay $256 million to resolve alleged violations of the False Claims Act for billing Medicare, Medicaid and other federal health care programs for medically unnecessary urine drug and genetic testing and for providing free items to physicians who agreed to refer expensive laboratory testing business to Millennium, the Justice Department announced today. Millennium, headquartered in San Diego, is one of the largest urine drug testing laboratories in the United States and conducts business nationwide.
“The Department of Justice is committed to ensuring that laboratory tests, including drug and genetic tests, are ordered based on each patient’s medical needs and not just to increase physician and laboratory profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will not tolerate practices such as the ordering of excessive, non-patient specific tests and the provision of inducements to physicians that lead to unnecessary costs being imposed upon our nation’s health care programs.”
As part of today’s announced settlements, Millennium has agreed to pay $227 million to resolve False Claims Act allegations, detailed in a complaint filed by the United States, that Millennium systematically billed federal health care programs for excessive and unnecessary urine drug testing from Jan. 1, 2008, through May 20, 2015. The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being tailored to individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs. This practice violated federal healthcare program rules limiting payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury. The United States also alleged that Millennium’s provision of free point of care urine drug test cups to physicians—expressly conditioned on the physicians’ agreement to return the urine specimens to Millennium for hundreds of dollars’ worth of additional testing—violated the Stark Law and the Anti-Kickback Statute. The Stark Law and the Anti-Kickback Statute generally prohibit laboratories from giving physicians anything of value in exchange for referrals of tests.
Millennium has also agreed to pay $10 million to resolve False Claims Act allegations that it submitted false claims to federal health care programs from Jan. 1, 2012, through May 20, 2015, for genetic testing that was performed routinely and without an individualized assessment of need.
“Millennium allegedly promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts. “A laboratory that promotes and knowingly conducts medically unnecessary drug testing operates unlawfully and squanders our precious federal health care resources.”
In connection with the False Claims Act settlements, Millennium has also entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG). In addition, Millennium will pay $19.2 million to the Centers for Medicare and Medicaid Services (CMS) to resolve certain administrative actions related to Millennium’s urine drug test billing practices.
“This company has taken the first step toward demonstrating a commitment to compliance by agreeing to make significant changes to its board of directors,” said Inspector General Daniel R. Levinson of HHS-OIG. “Most of the board will be comprised of new independent members. Under the five-year CIA, OIG will monitor the company’s compliance efforts under this new leadership.”
“CMS is committed to exercising quick and effective oversight to protect Medicare beneficiaries and the Medicare Trust Fund,” said Acting Administrator Andy Slavitt for CMS. “The resolution of this case is the result of the important partnership between CMS and the Department of Justice.”
The False Claims Act allegations resolved were originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. Under the act, the United States can elect to intervene in an action filed by a whistleblower, as it did, in part, with respect to several of the qui tam actions regarding urine drug testing allegations. The whistleblowers will receive $30.35 million from the False Claims Act recovery for the urine drug testing claims and $1.48 million from the False Claims Act recovery for the genetic testing claims.
The government’s pursuit of the claims resolved by the settlements illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $25.3 billion through False Claims Act cases, with more than $16.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was conducted by the Civil Division’s Commercial Litigation branch, the U.S. Attorney’s Office of the District of Massachusetts, HHS-OIG and HHS’ Office of the General Counsel, CMS, the Office of Personnel and Management Office of Inspector General, the U.S. Postal Service Office of Inspector General, the Department of Veterans Affairs and the FBI.
The cases that will be dismissed as part of the settlements are captioned United States ex rel. McGuire v. Millennium Laboratories, Inc., No. 12-cv-10132 (D. Mass.), United States ex rel. Uehling v. Millennium Laboratories, Inc. et al., No. 12-cv-10631 (D. Mass.), United States ex rel. Omni Healthcare Inc. v. Millennium Laboratories, Inc., No. 13-cv-10825 (D. Mass.), United States, et al., ex rel. Estate of Robert Cunningham v. Millennium Laboratories of California, Inc., No. 09-cv-12209 (D. Mass.); United States, et al., ex rel. Wendy Johnson v. Millennium Laboratories, Inc., No. 12-cv-12387 (D. Mass.), United States ex rel. Allstate Insurance Co. and Lawrence K. Spitz, M.D. v. Millennium Laboratories, Inc., No. 14-cv-14276 (D. Mass.), United States ex rel. Amadeo Pesce, Ph.D. v. Millennium Health, No. 15-cv-10821 (D. Mass.), and United States ex rel. Omni Healthcare Inc. v. Millennium Laboratories, Inc., No. 14-cv-13052 (D. Mass.).
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Michigan Man Sentenced to 13 Years in Prison for Fraud and Aggravated Identity Theft by Using Fake Charitable OrganizationsRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Michigan man was sentenced in Federal Court in Anchorage for making numerous false statements, identity theft and engaging in a scheme to operate fake charitable organizations.
Alan Michael Bartlett, 46, of Owosso, Michigan, was sentenced by Chief United States District Judge Ralph R. Beistline to 13 years in prison and five years of supervised release for two counts of mail fraud, 20 counts of bank fraud, five counts of wire fraud, five counts of false statements to the U.S. Postal Service, and five counts of aggravated identity theft. Bartlett was convicted by a jury on July 27, 2015.
According to Assistant U.S. Attorney Retta Randall, who prosecuted the case, and the evidence presented at trial, Bartlett had established two businesses, United States Disabled Veterans, LLC, and United States Handicapped-Disadvantaged Services, LLC, whose alleged mission was “to help provide real jobs for disabled & disadvantaged Americans.” The companies claimed to sell products for donations, the orders for which would “provide jobs for the handicapped.” There were no “jobs,” and the donations received did not go to veterans or the disabled and disadvantaged. Instead, these companies were used by Bartlett between December 2009 and December 2012, in a scheme to defraud individuals and financial institutions in Alaska and elsewhere, and obtain additional monies belonging to individual donors.
The evidence at trial showed that Bartlett solicited donations through telemarketing calls and through the mailing of brochures from his companies. Upon the receipt of small donations by check, Bartlett created counterfeit demand drafts using information printed on the solicited checks, including the financial institution name, financial institution routing number, and associated customer account number. He then negotiated the counterfeit demand drafts via fraudulent electronic payment transactions for his personal financial gain and benefit - investing in his E*Trade accounts, paying credit card bills, paying for Verizon Wireless telephone service, and paying on his defaulted student loan with the United States Department of Education. He also submitted forged power of attorney forms with falsified notary seals to the financial institutions in an effort to get transactions that had been reversed by the financial institution for fraud, credited back to him.
Bartlett used personal identifying information obtained from people who sent donations thinking they were giving to charitable organizations, to submit false change of address requests to the United
States Postal Service. He forged the signatures on the change of address requests and listed the street address of his residence in Owosso, MI, as the forwarding address. As a result, he received investment and financial information which should have gone directly to donors/victims.
Using the fabricated persona of a municipal law enforcement detective, Bartlett contacted one victim by telephone to dissuade the victim from reporting or providing additional information about Bartlett’s scheme to law enforcement.
Bartlett learned about the telemarketing business and obtained donor call lists when employed by telemarketing companies in Arizona in 2008; those companies were shut down in 2009 by the Federal Trade Commission for making false representations that they were charities and that donations/purchases would go to help handicapped or disabled people
Prior to imposing sentence, Judge Beistline stated that Bartlett was “truly a danger to the community.” Bartlett preyed on “the innocent, the elderly, and the ill, and showed no remorse.” Bartlett had attempted to obtain the pension benefits of an elderly man with Alzheimer’s and to access a bank account of another with dementia.
Ms. Loeffler commends the U.S. Postal Inspection Service for the investigation of this case. Anthony Galetti, Inspector in Charge of the U.S. Postal Inspection Service stated, “Today’s sentencing shows that any criminals who use the U.S. Mail to commit fraud will be caught and prosecuted. All of our fraud cases are important; however, instances like this case when the fraudster chose victims who are elderly are a priority for Postal Inspectors.”
Mexican National Sentenced to Ten Years for Child PornographyRead the Press Release
Luis Armando Moreno-Ayala, 35, a national of Mexico, was sentenced in federal court Monday, October 19, 2015, in Omaha, Nebraska, for receiving child pornography. The Honorable Laurie Smith Camp, Chief United States District Court Judge, sentenced Moreno-Ayala to a ten-year term of imprisonment. There is no parole in the federal system. After his release from prison, Moreno-Ayala will begin a five-year term of supervised release and most likely will be deported from the United States. Moreno-Ayala was further ordered to pay restitution in the sum of $3,000.
Moreno-Ayala was previously deported from the United States. On September 30, 2013, officers with the FBI Cyber Crimes Task Force were investigating individuals sharing child pornography over the internet. The investigation resulted in a search warrant at a Sarpy County home where Moreno-Ayala rented a room. Forensic analysis of Moreno-Ayala’s hard drives revealed more than 900 videos and 1,200 images of child pornography. These images included toddlers and preteens engaged in sexual acts to include bondage.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Federal Bureau of Investigation and the Sarpy County Sheriff’s Office.
Mexican National Guilty of Sierra Marijuana Cultivation OperationRead the Press Release
FRESNO, Calif. — Ezequiel Armas-Ortiz (Armas), 49, of Michoacán, Mexico, pleaded guilty today to conspiracy and to manufacturing and possessing with intent to distribute marijuana in connection with a large-scale cultivation operation in the Brush Creek drainage in the Sequoia National Forest in Tulare County, United States Attorney Benjamin B. Wagner announced.
According to court documents, Armas and two other men charged with him were responsible for watering 2,719 marijuana plants at the grow site. The marijuana cultivation activities caused extensive damage to the land and natural resources. Trees and plants, newly generated following the 2002 McNally Fire, were cut down to make room for the marijuana. Water was diverted from a nearby stream that supports trout. Armas also agreed to make restitution to the U.S. Forest Service for the damage caused by his wrongful conduct.
Armas is scheduled for sentencing on January 19, 2016. He faces a maximum statutory penalty of 20 years in prison and a $1 million fine. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables. Armas is also subject to deportation to Mexico after serving any term of imprisonment imposed.
This case is the product of an investigation by the U.S. Forest Service, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the California National Guard, the California Department of Fish and Wildlife, and Tulare County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.
Methamphetamine distribution conspiracy dismantled in Southwestern IndianaRead the Press Release
Terre Haute –United States Attorney Josh J. Minkler today announced charges against seven individuals involved in a methamphetamine conspiracy reaching from Indianapolis to Lawrenceville, Illinois.
“Methamphetamine has been a scourge on our Central Indiana communities for too long,” said Minkler. “Those who choose to violate the law by selling illegal drugs will be held strictly accountable and face the hammer of federal prosecution.”
Those indicted for conspiracy to distribute methamphetamine include:
Julius I. Weldon, a/k/a Joc, 41, Indianapolis, In.
Shevockus L. Swing, a/k/a Vock, a/k/a Little Homie, 27, Vincennes, In.
Jason Davis, a/k/a, Big Homie, 32 Bruceville, In.
James T. Western, a/k/a Country, 46, Lawrenceville, Il.
Donta Henderson, 35, Vincennes, In.
Justin Swain, 36, Lawrenceville, Il.
Tammy Gillespie, 34, Lawrenceville, Il.
According to the indictment, Julius Weldon was the source of supply, receiving his methamphetamine from Arizona. The packages of methamphetamine were delivered by UPS and FedEx to Weldon’s home in Indianapolis. Weldon distributed his drugs to Swing, Davis, and Western. Western would then distribute to Swain and Gillespie for redistribution in the Lawrenceville, Illinois area. Henderson was a drug runner for Weldon to other locations in central Indiana.
This case was investigated by the Drug Enforcement Administration, Indiana State Police, Illinois State Police, Daviess County Sheriff’s Department, Knox County Sheriff’s Department and the Lawrence County Illinois Prosecutor’s Office.
Weldon remains a fugitive but the other defendants had their initial appearance in federal court in Terre Haute on Friday, October, 16, 2015, and were all detained. Their detention hearing is scheduled for October 21, 2015, at the Terre Haute Federal Courthouse.
According to Chief of the Drug and Violent Crime Unit Bradly A. Blackington, who is prosecuting this case for the government, all could face up to twenty years in prison if convicted.
An indictment is only a charge and not evidence of guilt. A defendant is presumed innocent and entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Leader in Credit Card Fraud Scheme Sentenced to over 8 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Christopher V. Johnson, age 24, formerly of New York, today to 102 months in prison, followed by five years of supervised release, for bank fraud conspiracy and aggravated identity theft. Judge Bredar also entered an order requiring Johnson to pay restitution of $155,515.33.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; U.S. Marshal Johnny Hughes; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Fairfax County, Virginia, Police Chief Edwin C. Roessler, Jr.; Easton Police Department Chief David A. Spencer; Anne Arundel County Police Chief Tim Altomare; and Talbot County State’s Attorney Scott G. Patterson.
According to Johnson’s plea agreement, from at least the winter of 2012 through July 2014, Johnson conspired with Wanisha D. Coates, Lakriesha Coates, Domenique Miller, Sheardwood Michel, Shamika Earle and others to create counterfeit credit cards, using stolen or otherwise compromised credit and debit card numbers belonging to others. They encoded the stolen account information onto credit and stored value cards which were then used to obtain money and credit from banks and credit unions. These proceeds were used to buy consumer products, including designer shoes by Gucci, Louis Vuitton and Christian Louboutin, and designer clothes from Neiman Marcus.
On November 2, 2012, Johnson and Wanisha and Lakriesha Coates used altered credit cards to make fraudulent purchases at a Target in Fairfax, Virginia. Johnson was arrested and convicted in Fairfax County, Virginia for credit card fraud. Wanisha Coates was also arrested and charged in Fairfax County, but failed to appear for her court hearing. A bench warrant was issued for her arrest.
On April 2, 2013, Johnson and Wanisha Coates were stopped by a Maryland State Trooper for a traffic violation in Centreville, Maryland. The Trooper smelled burnt marijuana and searched the vehicle, seizing several gift cards, credit cards and “ReloadIt” stored value cards that were altered and rewritten with compromised account information.
On January 11, 2014 Easton Police officers arrested Johnson and Miller after they tried to buy multiple gift cards at a Staples store in Easton. A number of credit cards fraudulently re-encoded with stolen or compromised account information were seized, along with a small amount of marijuana. Miller advised police that his girlfriend was staying at an Easton motel. Officers arrived at the motel room and were overwhelmed by the odor of raw and burnt marijuana as they entered. Present inside the room were the girlfriend and Wanisha Coates. Coates identified herself as “Wanda C. Redd,” who is in fact her mother. Officers seized 44 credit or stored value cards, many of which had been fraudulently altered. Johnson had used one of the fraudulently altered cards to make over $200 in purchases at a drug store in Easton. Of the 108 cards seized from Johnson, Miller and Coates on January 11, approximately 88 were found to be rewritten with stolen credit card/bank card account information. Many of the cards had been altered so that the last four digits appearing on the front of the card matched the last four digits of the stolen account number rewritten on the magnetic strip of the card.
Johnson was released from custody in Talbot County on January 12, 2014. That same day, someone logged-in to Johnson’s account and unsuccessfully attempted to remotely erase the date on Johnson’s iPhone, which was in the custody of law enforcement.
On March 13, 2014, Anne Arundel County Police responded to a call from a man at a motel in Linthicum, Maryland, later identified as Johnson, who said he had been cut in the face with a knife by Wanisha Coates. Police found Johnson and Coates outside of their motel room attempting to leave. Police seized approximately 27 credit and gift cards, some visibly altered, and a device for reading, erasing and writing data on magnetic strips of credit cards. At least 13 of the seized credit cards and gift cards had been reencoded with account information that did not match the numbers appearing on the front of the cards.
Between June 30 and July 7, 2014, Johnson, Michel and another conspirator made numerous purchases in New Jersey using fraudulently reencoded credit and stored value cards. On July 14, 2014, Johnson was driving in Lyndhurst, New Jersey, when a police officer attempted to pull him over. When the officer got out of his patrol car, Johnson pulled away and police gave chase. After Johnson struck a small tree, police ordered him out of the vehicle, but Johnson accelerated in reverse, sideswiping a police vehicle and drove for several blocks before bailing out of the car. Johnson ran through several back yards before being arrested by officers. Johnson was charged and officers seized marijuana, a tablet computer, two cell phones, a receipt for a $624 wire transfer, and numerous credit and gift cards, at least one of which was visibly tampered with. Johnson’s New Jersey state charges are still pending.
On July 23, 2014 the U.S. Marshals Service Regional Fugitive Task Force located Coates, who had fled from federal pretrial supervision in June 2014, at a motel in Belleville, New Jersey. Task force officers arrived at the motel room, which smelled strongly of burnt marijuana, and arrested Coates. Officers seized marijuana, a credit card embossing device, electronics, and approximately 100-150 stored value cards or credit cards, some of which had been fraudulently re-encoded with stolen credit card information.
On March 10, 2015, while Johnson was an inmate at the Chesapeake Detention Facility in Baltimore, he made several calls to Earle. Johnson was being held there pending his initial appearance and arraignment on his federal charges. During the calls, which were recorded, Johnson asked Earle if she was with Michel, and if she would get him money orders for his commissary account. During the call, Johnson told Earle to purchase the money orders with gift cards obtained using stolen credit card account information. Earle advised that she already had three $100 money orders purchased with fraudulently obtained gift cards. Johnson asked Earle to try to get another gift card purchased with stolen credit card information, in order to get him another money order. In a later call, Johnson asked Earle to get him money orders for $85 because they cleared into his commissary account faster. Earle confirmed that Michel was with her and they would get additional money orders for Johnson.
Earle and Michel were arrested on March 12, 2015, after engaging in numerous fraudulent transactions using cards encoded with stolen credit card information at a department store in Towson, Maryland. At the time of their arrest, Michel possessed 26 fraudulently reencoded cards and Earle possessed 15 fraudulently reencoded cards. Earle also had four money orders in Johnson’s name – three for $100 and one for $85. The money orders had all been purchased with prepaid debit cards that had been purchased using stolen credit card information.
The loss attributable to Johnson during the course of the conspiracy is between $120,000 and $200,000, and involves more than 250 victims.
Co-conspirator Sheardwood H. Michel, age 26, of St. Albans, New York, and Shamika C. Earle, age 25, of Deer Park, New York, pleaded guilty to their roles in the scheme and are scheduled to be sentenced on October 26 and 27, respectively.
Wanisha D. Coates, age 26, and Lakriesha Coates, age 25, both of Baltimore, Domenique R. Miller, age 21, of Newnan, Georgia, previously pleaded guilty to their participation in the scheme and were sentenced to four years in prison, a year and a day in prison, and time served, respectively.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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 the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the HSI Baltimore, U.S. Secret Service, U.S. Marshals Service, Easton Police Department, Maryland State Police, Anne Arundel County Police Department, Fairfax (Virginia) County Police Department, Talbot County State’s Attorney’s Office and the U.S. Marshals Service Regional Fugitive Task Force for their work in the investigation and related prosecution. Mr. Rosenstein praised the Fairfax County (Virginia) Commonwealth’s Attorney’s Office and Lyndhurst (New Jersey) Police Department for their assistance in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorney Zachary A. Myers, who prosecuted the case.
Larry Thomas Williams Sentenced to 140 Months on Large Scale Marijuana Conspiracy ConvictionRead the Press Release
GREENEVILLE, Tenn. – On Oct. 19, 2015, Larry Thomas Williams, 67, of Mendota, Va., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 140 months in federal prison for his role in an extensive marijuana distribution conspiracy centered in the Eastern District of Tennessee and Western District of Virginia, with sources of supply in and around the Los Angeles, Cal., area.
According to the plea agreement on file with the U.S. District Court, Williams admitted to selling ounce quantities of marijuana in May and June 2007, to an individual working on behalf of law enforcement in Russell County, Va. He admitted to conspiring to distribute marijuana for many years in the Eastern District of Tennessee. In a recorded July 2013 meeting in Bristol, Va., Williams told an individual working with law enforcement that he had hauled marijuana for the last 17 years and that he was interested in purchasing up to 50 pounds of marijuana at a time. He discussed, with this same individual, the best times of the day to transport marijuana and the fact that Tennessee was making it hard on smugglers. Williams also admitted to dealing in marijuana with one particular co-conspirator for 10 years, to which he owed a drug debt. However, since that individual was now deceased, he considered the debt to be severance pay. He further admitted to knowing the location of 256 pounds of marijuana that has been missing since this co-conspirator passed away.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent conviction of Larry Thomas Williams include the Tennessee Bureau of Investigation, IRS Criminal Investigation Division, Second District Judicial Drug Task Force, Kingsport Police Department and Russell County, Virginia Sheriff’s Office. Assistant U.S. Attorney Wayne Taylor represented the United States.
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Jury Convicts Four in Pill Mill Operation Run by Plano AnesthesiologistRead the Press Release
DALLAS — Following a nine-day jury trial before Chief U.S. District Judge Jorge A. Solis, a federal jury has convicted a physician and three co-conspirators on felony offenses stemming from their operation of a pill mill and drug distribution conspiracy they ran in Dallas from January 2012 to early December 2013. The announcement was made this morning by U.S. Attorney John Parker of the Northern District of Texas.
Licensed anesthesiologist Theodore E. Okechuku, 59, of Plano, Texas; Emmanuel C. Iwuoha, 52, of Allen, Texas; Elechi N. Oti, 50, of Augusta, Georgia; and Kelvin L. Rutledge, 43, of Dallas; were each convicted late Friday on one count of conspiracy to unlawfully distribute a controlled substance. Okechuku was convicted of using, carrying and brandishing a firearm in relation to a drug trafficking crime. Okechuku was also convicted on conspiracy to use, carry, and brandish a firearm during and in relation to a drug trafficking crime.
Three co-conspirators, all from Dallas, pleaded guilty before trial. Ignatius O. Ezenagu, 57; David L. Reed, 44; and Jerry K. Reed, 45; each pleaded guilty to one count of conspiracy to unlawfully distribute a controlled substance. Ezenagu also pleaded guilty conspiracy to brandish a firearm in relation to a drug trafficking crime
The drug trafficking conspiracy count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. The firearm conspiracy count carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine, and each substantive firearm offense carries a maximum statutory penalty of life in federal prison and a $250,000 fine. Sentencing is set for January 26, 2016.
The government presented evidence at trial that Okechuku owned and operated, with the assistance of coconspirator Ezenagu, Medical Rehabilitation Clinic (MRC). MRC was initially located at 9304 Forest Lane in Dallas, and then later, the defendants moved MRC to 9205 Skillman Street in Dallas.
MRC operated as a “pill mill,” in that it functioned as a place to unlawfully obtain controlled substances, such as hydrocodone, and not as a medical facility. Okechuku and business manager Ezenagu charged cash only for office visits in exchange for unlawful hydrocodone prescriptions.
The coconspirator drug dealers, including David Reed and his brother Jerry Reed, along with Rutledge, recruited “patients,” often from homeless shelters, and drove them in groups to MRC. On a daily basis, these dealers brought multiple patients at a time to MRC. They would escort the patients into the clinic and coordinate their office visits with Ezenagu.
Often, dealers filled out patient information for the recruits they brought to the clinic. Dealers paid cash for the office visits of their patients, and handed the money to their patients before they entered the clinic, gave it to them in MRC’s waiting room, or paid the employees directly. MRC had a caged cash room where people would pay for the office visit with money provided by the dealers, by handing the money through an opening in the bars to a clinic employee. Large amounts of cash, often more than $5,000, passed through the clinic’s drug trafficking business on a daily basis.
Okechuku and Ezenagu conspired to employ armed security guards to protect the business, its employees, and the dealers. These armed security guards displayed and brandished various firearms on their waists for all to see in order to deter violence by the “patients” and to protect the illicit drug money from robbery.
Okechuku rarely saw patients, but delegated that task to licensed physician assistant and coconspirator Oti or to Emmanuel Iwuoha, who held no medical or nursing license in Texas, but acted as a doctor, using Okechuku’s signature and DEA prescription authority. In fact, at MRC, Okechuku, Oti, and Iwuoha were referred to as “Doctor,” regardless of medical license.
Oti, Iwuoha, and at times, Okechuku, would do little to no physical examination and prescribe controlled substances, including hydrocodone, a Schedule III controlled substance at the time. Patient visits were short and they would normally leave with a 30-day prescription (120 pills) or more of hydrocodone, along with other prescriptions. Okechuku, Oti, and Iwuoha diagnosed the majority of the patients with back pain, regardless of their true condition. Hydrocodone was prescribed regardless of a patient’s need, or lack thereof.
Once the patients received the prescriptions at MRC, the coconspirator dealers would drive the groups of patients to various pharmacies to get the prescriptions filled. The dealers would also furnish the money to pay for the narcotics. Sometimes, the dealers did not need the patients to pick up the prescriptions as some pharmacies gave the hydrocodone directly to the dealers. After the prescriptions were filled, the patients gave the pills to the dealers, who then sold the pills on the street for a profit.
The FBI, Dallas Police Department and Mesquite Police Department investigated. Assistant U.S. Attorneys Kate Pfeifle and Russ Fusco, and Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay prosecuted.
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Jury Convicts Catskill Man and Coxsackie Woman of Benefits FraudRead the Press Release
ALBANY, NEW YORK – A jury on Friday voted to convict John W. Caltabiano, Jr., age 48, of Catskill, and Colleen J. McCarten, age 43, of Coxsackie, of conspiracy to commit mail fraud, five counts of mail fraud, and theft of government property, announced United States Attorney Richard S. Hartunian and Edward J. Ryan, Special Agent-In-Charge of the Social Security Administration (SSA) Office of the Inspector General.
The jury reached a verdict on October 16, after a two-week trial. Caltabiano and McCarten face up to 20 years in prison on each of the conspiracy and mail fraud counts, and a maximum of 10 years of imprisonment on the theft of government property count. United States District Judge Mae A. D’Agostino is scheduled to sentence them on February 18, 2016.
Between April 2008 and October 2010, Caltabiano and McCarten conspired to steal Social Security Disability and Workers’ Compensation benefits by falsely presenting Caltabiano as completely blind to the SSA, the New York State Workers’ Compensation Board and Travelers Insurance. Surveillance videos showed Caltabiano driving, shopping and otherwise moving about without assistance.
“The jury’s verdict holds the defendants accountable for pretending that one of them was completely blind in order to increase his Social Security Administration and workers’ compensation benefits,” stated U.S. Attorney Richard S. Hartunian. “My office will continue to work with the Social Security Administration’s Office of the Inspector General to ensure that such deceit does not pay.”
“We applaud the jury’s verdict and the successful efforts of the U.S. Attorney’s Office and the Social Security Administration’s Office of General Counsel in bringing this case to justice,” stated Edward J. Ryan, Special Agent-In-Charge of the SSA Office of the Inspector General. “As guardians of the public trust, our office will continue to investigate SSA beneficiaries who feign their medical conditions and submit false documentation to the SSA. Our successful criminal prosecutions protect the SSA trust funds for those who truly deserve disability benefits.”
This case was investigated by the Social Security Administration Office of the Inspector General and the New York State Workers’ Compensation Board, and is being prosecuted by Assistant U.S. Attorney Jeffrey C. Coffman and Special Assistant U.S. Attorney Jason W. White.
Investment Advisor Charged with Bilking Clients Out of Nearly $2 MillionRead the Press Release
PHILADELPHIA - Michael Donnelly, 47, of Lecanto, Florida was charged today by information in an investment scheme that bilked his friends and clients of nearly $2 million, announced United States Attorney Zane David Memeger. Donnelly is charged with one count of wire fraud and with one count of securities fraud.
Donnelly was an investment advisor and registered representative who served as president of Donnelly, Steen & Company, doing business as Coastal Investment Advisors, Inc., Coastal Equities, Inc., and Donnelly Advisors Group, which he also owned. According to the information, between November 2007 and August of 2014, Donnelly persuaded about a dozen investors, many of whom were senior citizens, to allow him to invest their money in securities or certificates of deposit. It is alleged that instead of investing his clients’ money, Donnelly appropriated the investment funds for his own use.
The information further alleges that Donnelly provided at least one client with brokerage account statements belonging to another client who held dozens of large cap stocks in an effort to conceal that he had appropriated the monies for his own use. When an investing couple asked Donnelly for their funds, he allegedly persuaded another investor to partially liquidate an annuity under the guise that there was an opportunity to buy out another investor. He then allegedly intended to use those funds to pay the investing couple rather than buying out an investment held by another client.
In a parallel action, the Securities and Exchange Commission today announced a civil settlement with Donnelly relating to the same conduct.
If convicted the defendant faces a maximum possible sentence of 40 years in prison, not more than three years of supervised release, a $5.25 million fine and a $200 special assessment.
The case was investigated by the FBI with assistance from the Securities and Exchange Commission Division of Enforcement. It is being prosecuted by Assistant U.S. Attorney Linwood C. Wright, Jr.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Illinois Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
Lonnie C. Mathenia, a 50-year old, Granite City, Illinois, man was sentenced on October 16, 2015, in federal district court in East St. Louis, Illinois, for Failure to Register as a Sex Offender, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Mathenia was sentenced to 15 months in prison; 5 years’ supervised release, and ordered to pay a $100 special assessment.
After Mathenia registered as a sex offender in Granite City, Illinois, on May 6, 2014, a compliance check was conducted on June 3, 2014, by Granite City, Illinois, Police Department officers to verify Mathenia’s listed address. Law enforcement officials learned that Mathenia had been stopped and arrested for hitchhiking in Shawnee County, Kansas, on June 17, 2014, arrested for trespassing in Cheyenne County, Colorado, on July 28, 2015, and arrested for trespassing in Conway, Arkansas, on September 24, 2015. During this time, Mathenia neither registered as a sex offender in any of these jurisdictions nor updated his registration in the State of Illinois, as required under the Sex Offender Registration and Notification Act (SORNA). Mathenia was convicted of Possession of Child Pornography in 2014 in Madison County, Illinois.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The case was investigated by the United States Marshals Service and the Granite City Police Department. The case was prosecuted by Assistant United States Attorneys Angela Scott and Daniel T. Kapsak.
Harrisburg Man Sentenced to 12 Years Imprisonment for Distribution of Heroin and CocaineRead the Press Release
HARRISBURG - The United States Attorney's Office for the Middle District of Pennsylvania announced today that Nicholas Rivera, age 41, of Harrisburg, Pennsylvania was sentenced to 12 years in federal prison today by United States District Court Chief Judge Christopher C. Conner, in Harrisburg for drug trafficking.
According to United States Attorney Peter Smith, Rivera pleaded guilty to a superseding information in June 2015 that charged him with distribution and possession with intent to distribute a controlled substance. The charges against Rivera were a result of Rivera selling heroin and cocaine to an undercover trooper in Harrisburg on five separate occasions from March 2014 through May 2014. Following Rivera’s arrest, the Pennsylvania State Police executed a search warrant on Rivera’s residence on Crescent Street in Harrisburg, PA and recovered approximately $8,000 hidden in a floor vent, along with other evidence of drug trafficking.
This case was investigated by the Drug Enforcement Administration, the Pennsylvania State Police and the Dauphin County Drug Task Force. This case was prosecuted by Assistant United States Attorney Meredith A. Taylor.
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Guyanese Woman Pleads Guilty to Trafficking in Counterfeit Credit Cards and Aggravated Identity TheftRead the Press Release
ALBANY, NEW YORK – Georgette Jackman, age 37, a citizen of Guyana, pleaded guilty on October 16 to conspiracy to commit access device fraud, aggravated identity theft, and trafficking in counterfeit access devices, announced United States Attorney Richard S. Hartunian and Todd Laster, Special Agent in Charge of the Buffalo Field Office of the U.S. Secret Service.
Jackman was detained pending sentencing, which is scheduled for February 18, 2016 in Albany before United States District Judge Mae A. D’Agostino. She faces up to 15 years of imprisonment on the conspiracy and trafficking charges, and a mandatory two years of imprisonment on the aggravated identity theft charge, which must be served consecutive to any other sentence of imprisonment. Jackman also faces deportation from the United States following the completion of her punishment.
As part of her guilty plea, Jackman admitted that from February 2012 through January 2013, she and co-conspirators Jamese Williams and Terry Nicholas travelled together by car on a regular basis to stores throughout New York, Massachusetts, New Hampshire, Vermont and Connecticut, including approximately 47 Price Chopper grocery stores. During these trips Jackman provided Williams and Nicholas with hundreds of counterfeit credit cards bearing stolen account numbers and embossed names that did not correspond to the actual account holders. Williams and Nicholas used these cards to purchase $435,465 worth of gift cards, which they gave to Jackman.
This case was investigated by the Secret Service and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Glastonbury Man Pleads Guilty to Structuring Financial TransactionsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAVID E. RAYMOND, 74, of Glastonbury, pleaded guilty today before U.S. District Judge Janet Bond Arterton in New Haven to structuring financial transactions.
Federal law requires all financial institutions to file a Currency Transaction Report (CTR) for currency transactions that exceed $10,000. To evade the filing of a CTR, individuals will often structure their currency transactions so that no single transaction exceeds $10,000. Structuring involves the repeated depositing or withdrawal of amounts of cash less than the $10,000 limit, or the splitting of a cash transaction that exceeds $10,000 into smaller cash transactions in an effort to avoid the reporting requirements. Even if the deposited funds are derived from a legitimate means, financial transactions conducted in this manner are still in violation of federal criminal law.
According to court documents and statements made in court, RAYMOND purchased rock and roll memorabilia for a doctor who owned a medical practice. RAYMOND’s friend, Andrea Dobrozensky, was the office manager for the medical practice and also paid the doctor’s personal expenses. For purchases of items for the doctor in amounts greater than $10,000, RAYMOND requested that any checks payable to him be made in amounts under $10,000 so as to avoid filling out a form. Dobrozensky wrote multiple checks, ranging in amounts from $4,000 to $9,900, payable to RAYMOND, many on the same date.
Between August 2009 and May 2012, RAYMOND received 20 checks totaling $146,500 from the medical practice’s business bank accounts. The checks were negotiated for cash at local bank branches where RAYMOND had personal accounts.
With respect to related conduct, on November 27, 2012, RAYMOND and Dobrozensky traveled to a branch of Farmington Bank in Avon where RAYMOND told Dobrozensky to write checks in amounts below $10,000. Dobrozensky wrote two checks, one to herself for $9,900 and one to RAYMOND for $9,900. Dobrozensky then cashed the check payable to her and received $9,900 in cash, and RAYMOND cashed the check payable to him and received $9,900 in cash. Later, RAYMOND provided the $9,900 to Dobrozensky.
The charge of unlawfully structuring financial transactions carries a maximum term of imprisonment of five years and a fine up to $250,000. Judge Arterton scheduled sentencing for January 15, 2016.
RAYMOND has agreed to forfeit $10,000 related to his structuring activity.
RAYMOND is released on a $200,000 bond.
On October 13, 2015, Dobrozensky pleaded guilty to tax and structuring charges. She awaits sentencing.
This matter has been investigated by the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation and Hartford Police Department. The case is being prosecuted by Assistant U.S. Attorneys John H. Durham and Peter S. Jongbloed.
Fresno Man Sentenced to over 10 Years in Prison for Sex Trafficking of a MinorRead the Press Release
FRESNO, Calif. — United States District Court Judge Lawrence J. O’Neill sentenced Tryvell Powell, 34, of Fresno, today to 10 years and 10 months in prison for sex trafficking of a minor, United States Attorney Benjamin B. Wagner announced.
According to court documents, Powell communicated with a 16-year-old girl on Facebook and persuaded her to leave Modesto where she was living and travel to Fresno. She then engaged in sex acts with strangers at Powell’s request for his monetary benefit. A relative of the girl reported seeing pictures of the teen in an online advertisement for prostitution. Fresno detectives used the advertisements to contact the girl and arrested Powell.
This case was the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant United States Attorney Michael Frye prosecuted the case.
This 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Fort Worth Man Sentenced to 300 Months in Federal Prison on Crack Cocaine ConvictionRead the Press Release
FORT WORTH, Texas — Jeremy Warner, a Fort Worth man who pleaded guilty in July to one count of possession of cocaine base (crack cocaine) with the intent to distribute, was sentenced today by U.S. District Judge Reed C. O’Connor to 300 months in federal prison, announced U.S. Attorney John Parker of the Northern District of Texas.
Warner, 33, has been in custody since his arrest in May 2015 on a related federal criminal complaint.
According to the complaint filed in the case, when officers with the Fort Worth Police Department executed a search warrant at Warner’s residence on Illinois Avenue in Fort Worth in May 2015, Warner ran down the hallway and attempted to barricade himself in the master bathroom. After taking Warner into custody, officers began a systematic search of the residence. During the search, officers located a clear baggie containing approximately 95 grams of crack cocaine in plain view on the kitchen counter beside a digital scale. During a search of the master bathroom cabinets, officers located two large clear bags, one of which contained approximately 699 grams of crack cocaine and the second clear bag contained approximately 807 grams of powder cocaine. During the search of a hallway closet, officers located approximately $11,000.
Warner knowingly possessed the cocaine base with the intent to distribute it.
The Fort Worth Police Department and the Drug Enforcement Administration investigated the case. Assistant U.S. Attorney Shawn Smith prosecuted.
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Former Woodbury Police Chief Sentenced for Theft of Federal Grant FundsRead the Press Release
Kevin Mooneyham, 47, former Chief of Police for the City of Woodbury, Tennessee, was sentenced today by Chief U.S. District Judge Kevin H. Sharp to serve eight months in federal prison for theft of federal program funds, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Mooneyham was also ordered to serve one year of supervised release and to pay restitution in the amount of $42,171.29. Mooneyham was indicted on April 22, 2015, and pleaded guilty on June 29, 2015.
In sentencing Mooneyham, Judge Sharp noted that there was an abuse of the public position that Mooneyham held which could not be ignored and should be reflected in the sentence imposed.
Mooneyham admitted during the plea hearing that from January 2013 through February 2015, while acting in his official capacity as the Woodbury Police Chief, he submitted fraudulent timesheets for more than $28,000 in overtime hours that he had not in fact worked. The funds used to pay the false overtime hours claimed by Mooneyham were derived from federal grants provided by the National Highway Traffic Safety Administration through the Governor’s Highway Safety Office, specifically for the purpose of enhanced DUI enforcement efforts.
Mooneyham also admitted that he misrepresented to other officers of the Woodbury Police Department that federally-funded overtime was not available, despite the fact that he had been submitting and continued to submit timesheets for such overtime on his own behalf. He also disclosed that he had misrepresented to a Town of Woodbury official that he had received a large percentage of federally-funded overtime pay because no other officers of the Woodbury Police Department were willing to perform the overtime patrols. In fact, several Woodbury Police officers had expressed an interest in performing such overtime patrols.
The case was investigated by the Tennessee Bureau of Investigation. Assistant U.S. Attorney Bill Abely prosecuted the case.
Former Wilmington Housing Authority Employee Pleads Guilty to $179,000 EmbezzlementRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Damien Piper, age 34, of Wilmington, Delaware, pled guilty today to violations of 18 U.S.C. § 666 (Theft of Public Funds). Piper, who will be sentenced on February 2, 2016, by the Honorable Gregory M. Sleet, United States District Judge for the District of Delaware, faces a maximum sentence of ten years in prison, a fine of $250,000, and 3 years of supervised release.
According to statements made at the plea hearing and documents filed in court, the defendant was an Assistant Site Manager for the Wilmington Housing Authority’s Crestview Apartments. In February 2012, he began converting residents’ rental payments to his personal use. Residents often paid their rent by money order. Piper received and altered the money orders, making them payable to himself. Piper deposited the money orders into bank accounts he owned and controlled, and he cashed some of the money orders at check cashing businesses.
From February 10, 2012, and continuing up to and including October 7, 2014, Piper took more than 700 money orders that were designated for the Housing Authority, and he obtained at least $179,000. Piper altered the Housing Authority’s computerized records to conceal the converted payments as “adjustments.” These altered Housing Authority records indicated that less rent was due from the residents. In fact, Piper collected the full amount of rent from the residents and kept the “adjustment” amount for himself.”
U.S. Attorney Oberly commented: “I personally want to thank everyone involved who made this prosecution possible. Those who think they can commit crimes like this will be prosecuted and punished accordingly.”
This case is the result of an investigation conducted by the U.S. Department of Housing & Urban Development, Office of Inspector General, and the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Lauren Paxton.
Former Treasurer Admits to Stealing Money from Charlotte Area Non-Profit Employer and Pleads Guilty to ChargesRead the Press Release
CHARLOTTE, N.C. – The former Treasurer of a Charlotte area non-profit organization appeared in court today and admitted to stealing more than $344,262 from his employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Floyd Kevan Weaver, 53, of Rock Hill, S.C. pleaded guilty to one count of uttering counterfeit and forged securities before U.S. Magistrate Judge David C. Keesler.
U.S. Attorney Rose is joined in making today’s announcement by Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service.
According to filed court documents and today’s court proceedings, from 2000 to 2013, Weaver was employed by a non-profit organization located in Charlotte. As the non-profit’s elected Treasurer, Weaver was responsible for the organization’s financial affairs and acted as custodian of its funds. Weaver admitted in court today that from 2008 to 2013, he engaged in a scheme to defraud his employer by fraudulently diverting the organization’s funds for his personal benefit.
According to court records, Weaver executed the scheme by forging the name of one of the non-profit’s officers on the organization’s bank checks and depositing those checks into his own bank account. To conceal the fraud, Weaver mischaracterized the stolen funds as travel expenses, mileage reimbursement, office supplies and postage. Weaver admitted that he forged approximately 116 checks totaling more than $326,545. Weaver also admitted to using the non-profit’s debit card to steal more than $17,717 for his personal use. Court documents show that Weaver used the stolen money to purchase jewelry and a car, among other things.
Weaver was released on bond following his guilty plea. The charge carries a maximum prison term of 10 years and a $250,000 fine. As part of his plea agreement, Weaver has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendant has not been set yet.
The investigation was handled by the USPIS. The prosecution for the government is being handled by Assistant United States Attorney Jenny Sugar of the U.S. Attorney’s Office in Charlotte.
Former Silk Road Task Force Agent Sentenced to 78 Months in Prison for Extortion, Money Laundering, and ObstructionRead the Press Release
SAN FRANCISCO – Carl M. Force was sentenced to 78 months in prison today for extortion, money laundering, and obstruction of justice announced Acting U.S. Attorney Brian J. Stretch, Assistant Attorney General Leslie R. Caldwell, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Department of Justice Office of the Inspector General’s Washington, D.C. Field Office and Special Agent in Charge James E. Ward of the Department of Homeland Security’s Office of the Inspector General. The sentence follows a guilty plea in which Force admitted to using his position as an undercover agent with the Drug Enforcement Administration to steal digital currency during a federal investigation.
Force, 46, of Baltimore, had been a Special Agent with the DEA for 15 years. Between 2012 and 2014, he was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road. Force was the lead undercover agent in communication with Ross Ulbricht, a/k/a “Dread Pirate Roberts,” who ran the Silk Road from the Northern District of California. On July 1, 2015, Force pleaded guilty to charges that he used his position during that investigation to steal money during the investigation and then took steps to cover up his wrongdoing.
“The prosecution and conviction of Mr. Force illustrates that the public and law enforcement alike are subject to the same rules,” said Acting U.S. Attorney Brian J. Stretch. “The vast majority of the men and women in this country who are entrusted to enforce the law to do so honorably, skillfully, and in a manner that instills confidence and trust in government. Mr. Force has dishonored that majority and has today received a just punishment for his criminal conduct.”
“Law enforcement officials receive certain powers from the government so they can defend the rights of people and prevent wrong doing,” said FBI Special Agent In Charge David J. Johnson. “When individuals working in an official capacity violate the trust of their communities by abusing that power, they undermine the hard work of the entire law enforcement community. The FBI will continue to prioritize corruption investigations and hold those who abuse the public's trust accountable.”
“Through a series of complex transactions the defendant stole bitcoins worth hundreds of thousands of dollars,” said Thomas McMahon, Acting Special Agent in Charge, IRS Criminal Investigation. “The defendant’s crimes began with creating fictitious personas. He then stole bitcoins that he received in his official capacity and deposited them into his own personal accounts. This case is an excellent example of the financial expertise of our special agents. Through the analysis of both the block chain and data from the Silk Road servers, we were able to trace the flow of funds, which eventually led to the defendant.”
In his plea agreement, Force admitted to being on Ulbricht’s payroll in a variety of ways while assigned to investigate Ulbricht and the Silk Road. For example, Force used his official undercover persona, “Nob,” to get Ulbricht to send bitcoin payments in exchange for information, including “insider” law enforcement information; ironically, Force duped Ulbricht into making payments in part by claiming Nob had access to a corrupt government employee. Then, rather than disclose Ulbricht’s payments or turn them over to the government, Force lied on official reports and stole the funds. Force liquidated the digital currency into dollars and had the funds deposited into his own bank account in order to convert the funds to his own personal use. Further, Force also created other unofficial and fictitious personas that he used to extort payment from Ulbricht. For example, Force convinced Ulbricht he was “French Maid” named Carla Sophia who was willing to sell inside law enforcement information about the government’s investigation into the Silk Road in exchange for approximately $100,000 worth of bitcoin. Ulbricht ultimately made the payment and Force, again, stole the funds.
Ulbricht and the government were not the only targets of Force’s scheme: Force also admitted in the plea agreement that he extorted “R.P.,” a California resident. R.P. maintained a digital currency balance with CoinMKT, a California digital currency exchange. Force directed CoinMKT to seize R.P.’s funds despite there being no legal basis to do so. Force then pocketed those sums belonging to R.P., once again transferring them to his own personal digital currency exchange and subsequently converting them to dollars using his personal bank account.
Force also admitted to abusing his position by engaging in a wide array of outside activities without permission while he was a federal agent, all designed to enrich himself. For example, in March 2014, while still employed as a DEA agent, Force entered into a movie contract with Twentieth Century Fox Film Studios related to a movie deal concerning the government’s investigation into the Silk Road. The movie deal called for up to $240,000 in payments to Force. Further, Force also moonlighted as a de facto compliance officer for CoinMKT, the same digital currency exchange involved with Force’s attempt to extort R.P. Force offered to help CoinMKT investigate its customers by using his position as a federal agent and his access to government databases. In addition, Force sent an unauthorized but official Justice Department subpoena to Venmo, a mobile payments company, directing them to unfreeze his own personal account. When Venmo did not comply, Force wrote to another agent suggesting a criminal seizure directed at Venmo’s accounts.
With the proceeds of his criminal activities, Force engaged in a series of complicated transactions, using the bitcoin block chain and several different accounts, all designed to conceal the true source and nature of the proceeds. In today’s plea agreement, Force also admitted he obstructed justice by interfering both with the evidence in the Baltimore case against Ulbricht, and with the San Francisco case into his own illegal acts. For example, Force admitted lying to federal prosecutors and investigators when he, among other things, denied ever using the moniker, “French Maid.” In his agreement with the government, Force has agreed to ask the Judge to impose sentencing enhancements for this obstruction. On June 22, 2015, Force was charged in a three-count information with money laundering with predicates of wire fraud and theft of government property, in violation of 18 U.S.C. § 1956(a)(1)(A) and (B); obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2); and extortion under color of official right, in violation of 18 U.S.C. § 1951. On July 1, 2015, Force pleaded guilty to all counts.
The Honorable Richard Seeborg, U.S. District Judge in San Francisco, handed down the sentence. Judge Seeborg also sentenced Force to a three year period of supervised release and ordered restitution of $340,000.
Force is one of two federal agents to be charged with illegal activity in connection with the investigation into the Silk Road. Shaun W. Bridges, 32, of Laurel, Maryland, was a Special Agent with the U.S. Secret Service who also was assigned to the Baltimore Silk Road Task Force. Bridges was charged in a two-count information on June 16, 2015 with money laundering with a predicate of wire fraud, in violation of 18 U.S.C. § 1957, and obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2), related to his diversion of over $800,000 in digital currency to which he gained control as part of the Silk Road investigation. In his plea agreement scheduled to be entered before Judge Seeborg on August 31, 2015, Bridges has admitted to the conduct with which he was charged.
The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, with the assistance of San Francisco Legal Assistant Daniel Charlier-Smith, Christine Tian and Lance Libatique. Assistant U.S. Attorney Arvon Perteet assisted with Asset Forfeiture aspects of the case. The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington D.C. The prosecution team is also thankful for the assistance of the following components for their support throughout the investigation of this case: IRS Criminal Investigation – New York Field Office, HSI’s Chicago/O’Hare Division, the U.S. Attorney’s Office for the Southern District of New York, the Department of Justice’s Computer Crime and Intellectual Property Section, the U.S. Embassy in Slovenia, and the FBI Legal Attaché Office in Tokyo, Japan.
Former Miami Dade College Student Sentenced for His Involvement in a Stolen Identity Tax Refund Fraud Scheme Involving Financial Services AccountRead the Press Release
A former Miami Dade College (MDC) student was sentenced to 36 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $30,967 for his involvement in a stolen identity tax refund fraud scheme involving his student financial services account.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, FBI, Miami Field Office, made the announcement.
Jonathan Joseph, of Miami-Dade County, previously pled guilty to one count of conspiracy to commit an offense against the United States, in violation of Title 18, United States Code, Section 371, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, Joseph was a student at Miami Dade College. During his time as a student, Joseph opened a bank account serviced by Higher One, Inc. (HOI), which provides financial services to colleges and universities throughout the United States, including Miami Dade College in Florida.
Joseph and other unknown co-conspirators submitted twenty-two (22) fraudulent tax returns to the U.S. Department of Treasury (Treasury) claiming $104,260 in tax refunds and directed these refunds be deposited into Joseph’s HOI account. They also submitted sixteen (16) fraudulent tax returns to Treasury claiming $75,527 in tax refunds and directed these refunds be deposited into his unindicted co-conspirator's HOI account.
Joseph’s HOI account received $11,320 in fraudulently obtained tax refunds from Treasury. From July to September 2012, Joseph’s HOI account also received over $15,000 in proceeds from stolen tax refunds from his unindicted co-conspirator's HOI account.
Mr. Ferrer commended the investigative efforts of IRS-CI and the FBI. The case is being prosecuted by Assistant U.S. Attorney Gera R. Peoples.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
Former Letter Carrier Sentenced for Drug Trafficking and BriberyRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced former letter carrier Takisha Cole, age 33, of Washington, D.C. today to 21 months in prison followed by three years of supervised release for possession with intent to distribute marijuana, use of a communications device to facilitate drug trafficking and bribery.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Paul L. Bowman of the U.S. Postal Service, Office of Inspector General; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; and Chief J. Thomas Manger of the Montgomery County Police Department.
From at least March 2011 through September 2014, Cole was a letter carrier for the U.S. Postal Service, assigned to a route serving the Silver Spring, Maryland area.
According to court documents and evidence presented at Cole’s five-day trial, from at least May 2013 through August 13, 2014, Michael Prandy paid Cole to use her position as a letter carrier to obtain and deliver packages containing marijuana to Prandy. The packages were sent from California and elsewhere and mailed via USPS to Prandy’s residence in Silver Spring. In August 2013, Prandy’s address was removed from Cole’s postal route. Nevertheless, Cole continued to pick up his packages at the Silver Spring Postal Annex and deliver them to Prandy’s residence on McAlpine Road. According to trial testimony, in return for delivering the packages, Prandy paid Cole $50 to $100 per package, which he placed in an envelope and left in the mailbox at his residence for Cole to pick up.
Michael Louis Prandy, age 39, of Silver Spring, Maryland previously pleaded guilty to his role in the conspiracy and was sentenced to 33 months in prison.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Service -OIG, the U.S. Postal Inspection Service and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Ray D. McKenzie, who prosecuted the case.
Former Ketchikan Resident Pleads Guilty and Sentenced for Lacey Act ViolationRead the Press Release
Anchorage, Alaska - United States Attorney Karen Loeffler announced today that on October 19, 2015, Donald Ray Thornlow, a former resident of Ketchikan, Alaska, pled guilty in federal court in Juneau to violating the Lacey Act by commercially purchasing halibut that was caught for subsistence and sport purposes.
Thornlow, 66, pled guilty to a single count of a Lacey Act violation before United States Magistrate Judge Leslie Longenbaugh.
According to the information presented to the court by Assistant United States Attorney Jack S. Schmidt, who prosecuted the case, from January 2012 to about December 2013, Thornlow, the owner and operator of the former Narrows Inn and Restaurant in Ketchikan, Alaska, took part in a continuing scheme of purchasing subsistence and sport caught halibut for resale in his restaurant, a violation of federal regulations. Thornlow pled guilty to purchasing at least 997 pounds of illegally-caught halibut from three sources. Thornlow paid the three fishermen significantly less than he would have paid for legally-harvested halibut. Under the terms of the plea agreement, Thornlow will pay a $5,000 fine and be placed on probation for one year.
Prior to imposing sentence, Magistrate Judge Longenbaugh highlighted the seriousness of the offense and the need to deter the defendant and others, as well as the need to protect Alaska fishery resources as the reasons for imposing the sentence.
The National Oceanic and Atmospheric Administration, Office of Law Enforcement, Alaska Enforcement Division conducted the investigation leading to the charges in this case.
Former Federal Employee Indicted for Lying to Investigators About Placing Confederate Flag on Coworker’s DeskRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Susan R. Thompson (58, Jacksonville) with two counts of making false statements to a federal officer. If convicted, she faces a maximum penalty of five years in federal prison on each count.
According to the indictment, while working for the Army Corps of Engineers, Thompson placed a printed image of the Confederate battle flag on the desk of an African-American coworker. Thompson then lied on two occasions to an inspector from the Federal Protective Service by stating that she had not placed the image on her coworker’s desk.
An indictment is merely a formal charge that a defendant has committed one or more of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by U.S. Department of Homeland Security, Federal Protective Service. It will be prosecuted by Assistant United States Attorney Michael J. Coolican.
Former Federal Correctional Officer, Inmate Indicted for Attempting to Smuggle Marijuana into a Federal PrisonRead the Press Release
Memphis, TN – A former federal correctional officer and a federal inmate have been indicted for attempting to smuggle marijuana into a Memphis prison. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the indictment today.
According to the indictment, Keair Kemp was a public official and employed as a correctional officer at Federal Correctional Institution (FCI) Memphis. Travonte Johnson was an inmate at FCI Memphis.
Between mid-2015 and August 2015, Kemp and Johnson developed a scheme to smuggle marijuana into FCI Memphis. In exchange for cash, Kemp agreed to smuggle marijuana into the prison and to Johnson, thus violating his official duties as a correctional officer.
Kemp has been charged with one count of accepting money in return for being influenced to act in violation of his official duties. He is also charged with one count of attempting to provide a prohibited object, marijuana, to an inmate.
Johnson is charged with one count of offering money to a public official, to influence the performance of their official duties. Johnson is also charged with attempting to possess a prohibited object, marijuana, in prison.
If convicted, Kemp and Johnson face individual sentences of up to 15 years imprisonment and fines of up to $250,000 for the bribery charge. They each face up to five years imprisonment and fines of up to $250,000 on the contraband charge.
The case is being investigated by the Federal Bureau of Investigation, Department of Justice - Office of Inspector General, and the Federal Bureau of Prisons.
Assistant U.S. Attorney Mark Erskine is prosecuting the case on the government’s behalf.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former DEA Agent Sentenced for Extortion, Money Laundering and Obstruction Related to Silk Road InvestigationRead the Press Release
A former Drug Enforcement Administration (DEA) agent was sentenced today to 78 months in prison for extortion, money laundering and obstruction of justice, which crimes he committed while working as an undercover agent investigating Silk Road, an online marketplace used to facilitate the sale and purchase of illegal drugs and other contraband.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Brian Stretch of the Northern District of California, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Department of Justice Office of the Inspector General’s Washington, D.C., Field Office and Special Agent in Charge James E. Ward of the Department of Homeland Security Office of the Inspector General’s Atlanta Field Office made the announcement.
Carl M. Force, 46, of Baltimore, pleaded guilty on July 1, 2015, before U.S. District Court Judge Richard Seeborg of the Northern District of California. In addition to imposing the prison term, the court ordered Force to pay $340,000 in restitution and serve three years of supervised release following his sentence.
Force was a special agent with the DEA for 15 years. From 2012 through 2013, he was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road. Force served as an undercover agent and was tasked with, among other things, establishing communications with a target of the investigation, Ross Ulbricht, aka “Dread Pirate Roberts.”
In connection with his guilty plea, Force admitted that, while working in an undercover capacity using his DEA-sanctioned persona, “Nob,” in the summer of 2013, Force offered to sell Ulbricht fake drivers’ licenses and “inside” law enforcement information about the Silk Road investigation. Force admitted that he attempted to conceal his communications with Ulbricht about the payments by directing Ulbricht to use encrypted messaging. Force admitted that he understood the payments from Ulbricht, which were made in bitcoin, were government property, as they constituted evidence of a crime, and that he falsified official reports and stole the funds, which he deposited into his own personal account. Force admitted that, as Nob, he received bitcoin payments from Ulbricht worth more than approximately $100,000.
In addition, Force admitted that he devised and participated in a scheme to fraudulently obtain additional funds from Ulbricht through another online persona, “French Maid,” of which his task force colleagues were not aware. Force admitted that, as French Maid, he solicited and received bitcoin payments from Ulbricht worth approximately $100,000 in exchange for information concerning the government’s investigation into the Silk Road.
Force also admitted that he obstructed justice both by soliciting and accepting bitcoin from Ulbricht and by lying to federal prosecutors and agents who were investigating potential misconduct by Force and others.
In connection with his guilty plea, Force also admitted that, although he did not receive permission from the DEA to do so, he served as the chief compliance officer for CoinMKT, a digital currency exchange company. In this role, in February 2014, Force was alerted by CoinMKT to what the company initially believed to be suspicious activity in a particular account. Force admitted that, thereafter, in his capacity as a DEA agent, but without authority or a legal basis to do so, he directed CoinMKT to freeze $337,000 in cash and digital currency from the account. Force further admitted that he subsequently transferred approximately $300,000 of the digital currency into a personal account that he controlled.
The case is being investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington, D.C. The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section. Assistant U.S. Attorney Arvon Perteet of the Northern District of California handled the asset forfeiture aspects of the case.
Former Civilian Department of Defense Employee Sentenced for Engaging in Illicit Sexual Conduct with a Minor in HondurasRead the Press Release
A former civilian employee of the Department of Defense was sentenced to 84 months in prison for engaging in illicit sexual conduct with a minor in a foreign place.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.
William Curry McGrath, 55, of San Antonio, pleaded guilty on April 28, 2015, and has been in custody since his arrest in October 2014. In addition to imposing the prison term, U.S. District Judge Lee H. Rosenthal of the Southern District of Texas ordered McGrath to register as a sex offender and to serve five years of supervised release following his prison term.
From December 2012 to March 2014, McGrath was the director of the Network Enterprise Center at the Soto Cano Air Base in Comayagua, Honduras. In connection with his guilty plea, McGrath admitted that, while stationed in Honduras, he began a sexual relationship with a 13-year-old girl. He further admitted that he gave the girl money, gifts and other items of value in exchange for sexual acts.
The investigation was conducted by the FBI’s Houston Division. The case is being prosecuted by Trial Attorney Amy E. Larson of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Sherri Zack of the Southern District of Texas.
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.
Former Broker at San Fernando Valley Brokerage Firm Sentenced to 18 Months in Federal Prison for Defrauding InvestorsRead the Press Release
LOS ANGELES – A former registered representative at a now-defunct Sherman Oaks brokerage and investment firm was sentenced today to 18 months in federal prison on wire fraud charges associated with a real estate investment scam that resulted in about five dozen investors losing nearly $4 million.
Jonathan Greenfield, 50, of West Hills, who was a licensed securities representative at Morgan Peabody, Inc., was sentenced by United States District Judge Dale S. Fischer.
Greenfield pleaded in December 2013 to two wire fraud counts, admitting that he provided his clients at Morgan Peabody with materially false information related to a real estate investment fund called the Sherwood Secured Investment Fund, LLC. Greenfield also admitted the he omitted material information in connection with the fund.
The fund was created by former Morgan Peabody Chief Executive Officer David Williams, who pleaded guilty in May and is pending sentencing (see: http://go.usa.gov/3SQQw). The Sherwood Secured Investment Fund offered a 9 percent annual return on investments made in “direct and indirect investments in real estate and real estate companies” and other secured investments, but Williams admitted that he used the majority of investor money from the Sherwood Fund to pay for personal expenses. Greenfield was not charged with knowing that Williams would misappropriate the fund monies, but was charged with misrepresenting to his clients the risk and the purpose of the investment.
In addition to the prison term, Greenfield was ordered to pay restitution of $359,497 to victims of the fraud.
The investigation into Williams’ scheme was conducted by special agents with the Federal Bureau of Investigation and IRS - Criminal Investigation.
Former Augusta Moving Company Manager Found Guilty of FraudRead the Press Release
Contact Person: Winston Holliday (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that former Covan World Wide Moving, Inc., manager Ronald James Niemi, Jr., age 45, of Wesley Chapel, Florida, has been convicted of Mail Fraud, a violation of 18 U.S.C. § 1341, after a five-day trial in Columbia that concluded Monday. Senior United States District Judge Joseph F. Anderson, Jr., of Columbia presided over the trial and will sentence Niemi at a later date.
Evidence presented at the trial established that Ronald James Niemi was the manager of Covan’s Augusta facility from 2009 through 2011. Covan packs and moves soldiers when they are transferred from one base to another. Covan is paid according to the weight of the household goods moved. Niemi falsified certificates indicating the net weight of the household goods was higher than it actually was, causing the United States to pay more to move soldiers than it should have. At trial, the Government demonstrated forty instances when this took place.
Mr. Nettles stated the maximum penalty for Mail Fraud is imprisonment for 20 years and/or a fine of $250,000.
The case was investigated by agents of the Army Criminal Investigation Command and the Defense Criminal Investigative Service. Assistant United States Attorneys Winston Holliday and Ben Garner of the Columbia office are prosecuting the case.
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Federal Jury Convicts Rockwall, Texas, Man in Securities Fraud CaseRead the Press Release
DALLAS — Following a four-day trial before U.S. District Judge Jane J. Boyle, a federal jury convicted 34-year-old Mark Lee Cleaton, of Rockwall, Texas, today on felony offenses stemming from an investment fraud scheme he ran, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, the jury found Cleaton guilty on four counts of wire fraud. Each count carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine. Judge Boyle remanded Cleaton into the custody of the U.S. Marshals pending sentencing, which is set for February 4, 2016.
Cleaton was the managing member of North American Capital, LLC, formerly located at 2001 Bryan Street, Suite 2125, in Dallas. Cleaton created a limited partnership, North American Capital Investment Fund, LP (NACIF), in August 2009. The government presented evidence at trial that from approximately August 2009 to July 2010, Cleaton solicited $350,000 in investments in NACIF from several individuals, promising to invest that money in short-term, high-yield real estate projects, when in reality, he misappropriated all the money for himself, spending none of it as promised.
Throughout the scheme, Cleaton provided false investment memoranda and marketing materials to potential investors concerning the investment opportunity. Some of that material falsely represented an audited “7 year performance” history of NACIF, when as Cleaton well knew, NACIF had not even existed for seven years or had any rate of return.
Cleaton instructed each investor to wire funds into a checking account over which he had sole signatory authority. By the time he received the first investor’s funds, he had been locked out of his office in Bryan Tower for non-payment of two months’ rent. Cleaton immediately spent the investors’ money within weeks on personal expenses and unrelated business ventures, including credit card bills, trips to Hawaii, cash withdrawals, a used car business, and a high-end car audio/stereo store. He also intentionally failed to disclose to subsequent investors that he had already raised and spent prior investors’ money. Additionally, he made lulling payments to one victim investor from a later investor’s funds.
The FBI investigated the case. Assistant U.S. Attorney Nick Bunch and Deputy Criminal Chief Assistant U.S. Attorney Katherine Miller are prosecuting.
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Eighteen indicted for bringing heroin and cocaine from Chicago to CantonRead the Press Release
Eighteen people were indicted for their roles in a conspiracy that brought large amounts of heroin and crack cocaine to Canton from Chicago, law enforcement officials said.
Some of the defendants illegally used firearms as part of the conspiracy. Drug addicts were sometimes used to transport the narcotics from Chicago to Ohio, and the drugs were then distributed from houses in Canton and elsewhere, according to the indictment.
Named in the 11-count indictment are: Jermaine Ramsey, 39, of Canton; Philon Ramsey, 33, of Akron; Caitlin Dixon, 22, of Canton; Eric Edwards, 24, of Canton; Deonte Lewis, 29, of Canton; Terence Harper, 42, of Alliance; Drakco Edwards, 34, of Canton; Lowrell Neal, 35, of Canton; Shaun Smith, 36, of Canton; James Clark, 36, of Alliance; Cory Abbott, 30, of Canton; Matthew Carmichael, 19, of Riverside, Illinois; Frederick Coleman, 31, of Alliance; Dominique Edwards, 26, of Canton; Clifford Edwards, 57, of Canton; Thomas Bergener, 33, of Canton; Quinton Campbell, 28, of Chicago, and Patrick Thomas, 31, of Massillon.
Philon Ramsey, Jermaine Ramsey, Caitlin Dixon, Eric Edwards, Lowrell Neal and others obtained large quantities of heroin and cocaine from a supplier in Chicago. Edwards, Philon Ramsey, Dixon and others had addicts and relatives drive them and others to Chicago to obtain the drugs, according to the indictment.
Philon Ramsey, Edwards, Neal and others used addicts as “runners” to deliver heroin and cocaine to drug customers. They also used addicts and relatives to live in “trap houses” from which they distributed heroin and cocaine. These included residences on Lawn Avenue SW, Holland Court and 16th Street NE, and Piedmont Street in Canton, according to the indictment.
Eric Edwards used Shaun Smith and Patrick Thomas as “enforcers” for his drug trafficking organization, according to the indictment.
Philon Ramsey, Lowrell Neal, Terence Harper, Eric Edwards and Patrick Thomas face additional charges for being felons in possession of firearms.
Jermaine Ramsey, Matthew Carmichael and Quinton Campbell face additional charges for distributing heroin within 1,000 feet of Heritage Christian School. Drakco Edwards is charged with selling heroin within 1,000 feet of Fairmount Elementary School. Cory Abbott is charged with selling heroin within 1,000 feet of Timken High School.
The conspiracy took place between February 2013 and April 2015. Twenty-three firearms were seized as part of the investigation.
“These defendants spread misery throughout Stark County,” said U.S. Attorney Steven M. Dettelbach. “They illegally used firearms and held neighborhoods captive all in the name of selling drugs for profit.”
“The FBI will continue to collaborate with our law enforcement partners to remove the gun-toting suppliers and distributors of dangerous drugs being brought to the streets,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
“The result of an ongoing effort and belief among all levels of law enforcement with the common purpose of assisting the community in the saving of lives in the effort against heroin,” said Canton Police Chief Bruce Lawver.
This case is being prosecuted by Assistant U.S. Attorney Teresa Riley following an investigation by the Stark County Safe Streets Task Force. The task force includes members of the Federal Bureau of Investigation, Canton Police Department, Alliance Police Department, Jackson Township Police Department and the State of Ohio Parole Authority.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
District Man Sentenced to Five Years in Prison for Robbing Store and Customer at GunpointRead the Press Release
WASHINGTON – Christopher Willis, 22, of Washington, D.C., has been sentenced to five years in prison on charges stemming from his use of a firearm during a robbery of a convenience store and a store customer, U.S. Attorney Channing D. Phillips announced.
Willis pled guilty in August 2015, in the Superior Court of the District of Columbia, to charges of attempted robbery and possession of a firearm during a crime of violence. He was sentenced on Oct. 16, 2015, by the Honorable Patricia A. Broderick. Upon completion of his prison term, he must complete three years of probation.
According to the government’s evidence, at about 11:20 a.m. on June 3, 2015, Willis was walking around the parking lot of a convenience store in the 3500 block of Wheeler Road SE, with a loaded handgun. Several customers were coming in and out of the store. Willis approached one of the customers in the parking lot, brandishing a handgun, and forced the customer to give him his car keys. Willis then entered the store and, at gunpoint, he robbed a store clerk. When police arrived at the scene, they found Willis with the store’s proceeds.
In announcing the sentence, U.S. Attorney Phillips praised the work of those who investigated the case from the Metropolitan Police Department (MPD). He also expressed appreciation to Assistant U.S. Attorney Sarah C. Santiago, who investigated and prosecuted the case.
Director Shawn Bray Retires from Public Service at 2015 Partner Recognition CeremonyRead the Press Release
On October 14, 2015 INTERPOL Washington hosted its third Partner Recognition Ceremony. The ceremony honored Director Shawn Bray, as he prepares for retirement from public service at the end of this month, and the successful partnerships that have made his time as director a success. Representatives from the Department of Homeland Security (DHS) and the Department of Justice (DOJ), INTERPOL Washington’s parent agencies, as well as partners from other federal agencies, embassy liaisons, nonprofit organizations, and the private sector were all in attendance to show their support for INTERPOL Washington and Director Bray.
Jolene Lauria, Deputy Assistant Attorney General and Controller for the Department of Justice spoke about her relationship with the USNCB and Director Bray. She praised the director’s ability to create lasting friendships while still relentlessly accomplishing the agency’s goals.
Lev Kubiak, Assistant Director of Immigration and Customs Enforcement (ICE) also addressed the audience, touching on the close and productive relationship between ICE and the USNCB. He also described fondly the Director’s time at ICE before coming to INTERPOL Washington and the various successes that he had during his long career there.
A surprise video from the INTERPOL General Secretariat (IPSG) was also shown – allowing INTERPOL Secretary General Jürgen Stock to express his gratitude to Director Bray for his years of service and leadership in the international community. His kind message was a reminder of the many strong and effective working relationships that Director Bray has fostered.
Deputy Director Geoffrey Shank was the Master of Ceremonies for the event. Dep. Dir. Shank took the time to highlight how much Director Bray and, by extension, the entire USNCB benefited from the quiet and steadfast support of the Director’s wonderful wife. He also expressed gratitude for the role that Director Bray has played in his professional development, serving as both an example and as a mentor.
A series of unplanned remarks were also made by members of the audience who came to celebrate the agency and to wish the Director well as he closes this chapter of his life. It was during these remarks that the diversity and range of INTERPOL Washington’s partners was truly demonstrated. Law enforcement representatives from an incredible range of U.S. agencies spoke as well as representatives from partner law enforcement agencies from absolutely every corner of the globe.
It was a fitting memorandum to a career that was characterized by lasting friendships being formed through professional excellence.
Deputy Attorney General Sally Quillian Yates Written Testimony Before the Senate Judiciary Committee on the Sentencing Reform and Corrections Act of 2015Read the Press Release
Written Testimony Submitted for the Record
Mr. Chairman, Senator Leahy, distinguished Members of the Committee – thank you for holding this hearing on Federal sentencing and corrections policy and for allowing the Administration to share our views on this very important topic. It is an honor to be here to discuss an issue that is important to our country, our system of justice, and about which I personally feel very strongly.
I joined the Department of Justice in 1989 as a line AUSA in the U.S. Attorney’s office in Atlanta, and it has been my privilege to represent the people of the United States for over 27 years now. My perspective on sentencing policy is informed by my years of experience as an AUSA in the trenches, as a U.S. Attorney responsible for a district of over 6 million people, and now as the Deputy Attorney General.
As a career prosecutor, I have devoted my professional life to enforcing the law and keeping our communities safe. The fundamental responsibility of all prosecutors is not simply to win convictions or send people to prison. Our responsibility is to seek justice. And I believe that justice now requires that we recalibrate our approach to our sentencing laws.
For three decades, well-intentioned prosecutors have used the tools Congress gave them, including stiff mandatory minimum sentences, to prosecute drug cases. While the stated congressional purpose of those laws was to focus on the newly emerging South American drug cartels and the leaders of drug organizations who were responsible for large quantities of drugs, as we look back, it has become clear that these harsh sentencing laws cast too broad a net. This has come with real costs, both in dollars and cents but even more importantly, in the impact on our communities and the public’s confidence in our criminal justice system.
An unprecedented bi-partisan coalition has come together to arrive at a sentencing proposal that adjusts our laws so that the Department of Justice has the tools it needs to protect society from the most serious criminals, while ensuring that our criminal justice system operates in a manner that is fair, effective, and worthy of the public’s trust. This bi-partisan bill recalibrates some of our sentencing laws, invigorates recidivism-reduction programs and provides added protections to juveniles, all designed to make our communities safer and our system more just. The Department of Justice believes that reform is not only appropriate but necessary, and applauds the broad and impressive bipartisan efforts that went into this bill.
There are many facets to the debate surrounding sentencing reform. I know that for many of you, and for many Americans, one of the most important questions is whether we can reform sentencing policy without endangering the safety of our communities. As the official responsible for day-to-day operations of the Department of Justice, keeping America safe is my solemn responsibility. And I believe that sentencing reform will enhance our ability to keep the American people safe.
To understand why, it is helpful to step back and understand the costs of the current system – the fiscal costs and the human costs.
We have seen an explosion in the Federal prison population since the 1980’s. While the country’s population has only grown by about a third, our Federal prison population has grown by almost 800 percent, due in large part to the influx of drug defendants. Today, nearly half of all Federal inmates are in Federal prison for drug-related offenses. Under the current sentencing regime, our mandatory minimum laws do not calibrate a defendant’s sentence to match the threat that he or she poses to our safety. At its core, one of the basic problems with our mandatory minimum system is that it’s based almost exclusively on one factor – drug quantity. And so, we have a hard time distinguishing the cartel leader who needs to be in prison for a long time from the low level distributor who doesn’t. As a result, we have some defendants serving far more time in prison than necessary to punish and deter. This comes with great costs – costs to operate our prisons system, costs to our families and communities, and costs to the public’s confidence in the fairness of their system of justice.
From a dollar and cents standpoint, the Department’s prison and detention costs have increased by almost three billion dollars in the past decade and now account for roughly one third of the Department’s budget. Our mandatory minimum drug laws sweep broadly, and result in many prisoners serving long sentences. Every dollar that we spend imprisoning a non-violent drug offender for longer than necessary is a dollar that could be spent investigating emerging threats, from hackers to home-grown terrorists or to support State and local law enforcement, victims of crime, and crucial programs for prevention, intervention, and reentry.
This is not to say that every sentence is longer than necessary, nor that every sentence should be lowered. But we need an approach that is more carefully tailored, so we that we can focus our resources where they are needed most. Sentencing reform is critical to ensuring the Department and our State and local law enforcement partners have both strong laws and sufficient resources to combat drug and violent crime. Reform will enhance public safety. The reforms being considered in this bill do not reduce statutory maximums, and drug offenders will still receive significant sentences. Moreover, kingpins, drug organization leaders, violent criminals, as well as those who possess a firearm or dangerous weapon, will still receive enhanced penalties. But sentencing reform should permit a certain type of defendant – a low- level, non-violent drug defendant – to demonstrate to the sentencing judge that he or she should not be subject to the most onerous sentences. These modest revisions will help ensure that, in those cases, the punishment more closely matches the crime. In the long run, this should result in a lower Federal prison population, which will allow the Department to reallocate funds to other pressing needs.
But in addition to the fiscal costs, there are human costs to our current system as well.
We all know the toll that illegal drugs have taken on our society. The Justice Department aggressively pursues high-level drug traffickers because we know how these substances harm those with substance use disorders. We recognize the many lives ruined by the drug trade – from rural villages in Colombia and Mexico to the streets of Oakland and Newark.
But the harms of drug addiction are not necessarily solved by locking up, for as long as possible, everyone who touches the drugs. Take for example the case of one defendant whose record I recently reviewed. This particular defendant, who only had a 6th grade education, was a veteran of the Army, who was honorably discharged. He was convicted of selling crack on the street, in a case that may not even be a Federal case today. Although this defendant didn’t possess a gun or have any history of violence, he was sentenced to mandatory life in prison because he had two prior State convictions for selling cocaine, one of which involved just one ounce of cocaine. Life in prison is simply too high a price to pay for these three small-time drug sales.
Importantly, the costs aren’t just born by defendants. Too many children, over 2.7 million in the United States, have a parent behind bars. Approximately one in nine African- American children has a mother or father in prison. This cuts deeply into our society, and we must not pass this legacy to the next generation.
Similarly, when we impose longer-than-necessary prison sentences under the guise of public safety, we undermine the public’s confidence in the fairness of the criminal justice system. It’s not enough to have a system of justice that holds wrongdoers accountable. The system must also mete out punishment in a manner that is fair, reasonable, and tailored to the facts and circumstances of the crime. If it does not, then we risk losing the community’s faith in the institutions we represent. In the long run, that loss of faith could prove more costly to our nation’s future than any dollars and cents spent on the criminal justice system.
In looking for solutions, I am encouraged by the great innovations occurring at the State level. As Deputy Attorney General, I have had the opportunity to learn more about a wide variety of exciting programs, from drug courts to recidivism reduction programs. These efforts have been part of a broader shift away from thinking of incarceration as the only answer to crime. Across the country, States as varied as Texas, Ohio, North Carolina, and my home State of Georgia, have confronted exploding prison costs by enacting bold criminal justice reforms. Most importantly, these reforms have demonstrated that sentencing reform is compatible with lower crime rates. I am encouraged to see that ideas that have worked well on the State level – including expanded reentry programming to reduce prison sentences – have been included in the proposed legislation.
And these new, more focused approaches to combating crime will enhance, not undercut, our ability to enforce the law and protect the public. For example, one of the most common concerns raised is that long sentences for low-level drug defendants is the only way to secure their cooperation against the worst criminals. Not only is this inconsistent with my personal experience as a prosecutor, it is inconsistent with the data that we have gathered since the Justice Department readjusted its drug charging policy two years ago. As you most likely know, as part of the Smart on Crime Initiative, the Department directed Federal prosecutors not to charge certain drug offenses triggering mandatory minimum sentences in cases involving lower-level, non-violent drug offenders. Since that time, the Department’s charging of mandatory minimum drug offenses have decreased by approximately twenty percent. Although some feared that defendants would stop pleading guilty and stop cooperating, our experience has shown otherwise. In fact, defendants are pleading guilty at the same rates as they were before we instituted Smart on Crime. Similarly, the rates of cooperation have remained the same or even ticked up slightly.
But to make lasting changes, it is Congress that must establish a new sense of proportionality to our sentencing laws. As a society, we must balance our need for deterrence and our desire for retribution with our decency, our humanity, and our sense of fairness. We need an approach that is more carefully tailored, so that we can better distinguish between those who pose a more serious threat to our society and those who do not.
Back when I was a line prosecutor, I faced questions of balance and proportionality on a daily basis. In every case I prosecuted, there was a time when the AUSA was called upon to make a recommendation to the judge about the sentence to be imposed. Congress has laid out the factors a court is to consider in fashioning the appropriate sentence at Section 3553(a) of Title 18 in the United States Code. These considerations, known as the 3553(a) factors, loom large at every sentencing hearing. They require reflection on the nature and circumstances of the offense, the history and characteristics of the defendant, the need for specific and general deterrence, and a range of other issues.
But it is the opening sentence of Section 3553(a) that establishes the overarching principle: that the court shall impose a sentence “sufficient, but not greater than necessary,” to comply with the stated purposes of sentencing. Sufficient, but not greater than necessary. That phrase should guide us as we consider modification to America’s sentencing laws. We must punish, but no more so than is necessary to achieve our goals. Anything beyond that is a disservice to the principles of justice and to our system of laws. There is a balance we must strike, and I believe the proposed Sentencing Reform and Corrections Act is a good step to striking that balance. The country that we love and that we have a duty to defend deserves nothing less.
Thank you again for inviting me to speak here today. With that, I am happy to take your questions.
Corporation Pleads Guilty to Conspiring to Smuggle Goods into the United StatesRead the Press Release
PHILADELPHIA – ECL Solutions Limited, Inc., doing business as Ban-Air Storage Systems, a wholly-owned subsidiary of a privately-held British company (“ECL”), pleaded guilty today to conspiring to smuggle goods into the United States, in connection with a scheme to conceal the country of origin of its merchandise. U.S District Court Judge C. Darnell Jones II immediately ordered the company to pay a forfeiture money judgment in the amount of $1,066,132.10.
ECL sold, among other things, large scale steel racking systems. According to court documents, between November 2011 and September 2013, ECL intentionally failed to accurately mark its merchandise “Made in China,” in an effort to deceive the end-users, including the United States military, as to where these products were manufactured. In order to maximize its profit and gain a commercial advantage, ECL deceived the United States Customs and Border Protection (CBP), the United States Military, and private customers when it failed to mark its racking components “Made in China.” The conspiracy enabled ECL to pass off its shelving product as compliant with the Buy American Act (BAA) and Trade Agreements Act (TAA) when, in fact, it was using prohibited Chinese steel.
The case was investigated by Homeland Security Investigations (HSI) and the Defense Criminal Investigative Service (DCIS). It was prosecuted by Special Assistant United States Attorney Josh A. Davison.
Christian County, Kentucky, Convicted Felon Sentenced to 96 Months in Prison for Possession of A Firearm and AmmunitionRead the Press Release
Formerly convicted of First-Degree Manslaughter
PADUCAH, Ky. – U.S. Attorney John E. Kuhn, Jr., today announced the sentencing of a Christian County, Kentucky convicted felon, by Senior Judge Thomas Russell on Thursday, October 15, 2015 to 96 months in prison for the illegal possession of a firearm and ammunition.
“This was a dangerous, illegally armed, convicted felon who will serve 96 months in federal prison without the possibility of parole,” stated U.S. Attorney John Kuhn. “We will continue to prosecute dangerous felons who illegally possess firearms to ensure the safety of our communities.”
Jamie Artez Harris, age 38, pleaded guilty to the charge on June 25, 2015. According to the plea agreement, on August 10, 2014, in Christian County, Harris, being a person who had been convicted in a court of a crime punishable by imprisonment for a term exceeding one year, knowingly possessed a Colt, Model New Army/Navy Revolver (DA38), .38 Caliber and three rounds of .38 ammunition.
Harris was convicted of First-Degree Manslaughter, a felony, on February 17, 1995, in Christian Circuit Court, Christian County, Kentucky; and was convicted of the offenses of First-Degree Trafficking in a Controlled Substance, Cocaine, First Offense, and First-Degree Unlawful Transaction with a Minor, each a felony, on September 29, 2004, in Christian Circuit Court; and was convicted of the offenses of Tampering with Physical Evidence, First-Degree Possession of a Controlled Substance, Cocaine, First Offense, and First-Degree Fleeing or Evading Police, each a felony, on September 27, 2006, in Christian Circuit Court.
This case was prosecuted by Assistant United States Attorney Seth Hancock and was investigated by the Hopkinsville Police Department and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Chicago Man Sentenced on Heroin ChargesRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Darnell Roy Baker, a.k.a. "Forty," 26, of Chicago, Illinois, was sentenced to 5 years in federal prison, followed by 4 years’ supervised release, a $500 fine and a $500 special assessment. Specifically, Baker was sentenced for Conspiracy to Distribute Heroin from September 2012 through October 2014 in Marion County (Count 1), and four counts of Distribution of Heroin during June and July 2014, also in Marion County (Counts 2, 3, 4, and 6). The offenses are in violation of the federal Controlled Substances Act.
According to court documents, Baker agreed with his co-defendants, Dominique Burwell, and Marquise Ross, to distribute heroin for profit in Centralia, Marion County, Illinois. Baker and the others shared a cell phone which customers would contact to order heroin. Burwell often answered the shared cell phone, took the order, and then sent Baker or Ross to complete the transaction with the customer at whatever location was agreed upon. In July, Burwell was convicted in the case. In August, Ross pleaded guilty in the case and is awaiting sentencing.
Information leading to the charges against Baker was obtained in an investigation conducted by the FBI, the Marion County Sheriff’s Office, and the Clinton County Sheriff’s Department. The case is being handled by Assistant United States Attorney Kit Morrissey.
Channing D. Phillips Takes Office as United States AttorneyRead the Press Release
WASHINGTON – Channing D. Phillips took office today as United States Attorney for the District of Columbia. He succeeds Vincent H. Cohen, Jr., who had been serving as Acting U.S. Attorney since April 1, 2015.
President Obama nominated Mr. Phillips on Oct. 8, 2015, to serve as U.S. Attorney, and the nomination is pending Senate confirmation. Attorney General Loretta E. Lynch appointed Mr. Phillips to serve as Interim U.S. Attorney, effective today.
Mr. Phillips, 57, has served as Senior Counselor to Attorney General and Deputy Associate Attorney General in the Department of Justice since 2010. From 1994 to 2010, he served in the U.S. Attorney’s Office for the District of Columbia, where he held a number of managerial positions including Acting U.S. Attorney, Principal Assistant U.S. Attorney, Chief of Staff to the U.S. Attorney, and Special Counsel.
U.S. Attorney Phillips met with senior management today, expressing his excitement at being back at the U.S. Attorney's Office. He acknowledged a need and readiness to hit the ground running given several high-profile matters that await his immediate focus and attention. To help in that effort, he announced that he had named James Dinan, the current head of the Justice Department’s Professional Misconduct Review Unit, to serve as the Principal Assistant United States Attorney. Mr. Dinan, a seasoned and well-respected prosecutor, most recently served in the Office as Criminal Division Chief and Chief of the Narcotics and Gang Section. Mr. Dinan first joined the Office in 1989.
As he took on his new responsibilities today, U.S. Attorney Phillips thanked Mr. Cohen and Denise Simmonds, the outgoing Principal Assistant United States Attorney, for their exceptional work in leading and moving the Office forward since the departure of former U.S. Attorney Ronald C. Machen Jr. at the end of March 2015.
Centreville Man Sentenced for Drug Conspiracy, Attempted Robbery, Possession of Heroin, and a Firearm OffenseRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Antwyne Warren, 38, of Centreville, Illinois, was sentenced today by United States District Court Judge David R. Herndon to 120 months in federal prison for four felonies he committed in July 2013: (1) conspiracy to possess with intent to distribute cocaine; (2) attempted interference with commerce (robbery); (3) using or carrying firearms in furtherance of a drug trafficking offense and a crime of violence; and (4) possession heroin.
According to court documents, in July 2013, Warren agreed with two men to rob a drug stash house containing cocaine. Warren and another codefendant brought two loaded firearms with them to assist in the robbery. ATF agents, who had been investigating Warren and his codefendants’ plans to commit the robbery, arrested the three men in St. Louis. Warren was charged in federal court in East St. Louis, Illinois in July 2013 and later pled guilty.
There is no parole in the federal prison system. In addition to the prison sentence, Judge Herndon also sentenced Warren to serve a total of five years of supervised release and to pay $325 in court fees.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated the case and Assistant United States Attorney Monica A. Stump prosecuted the case.
California Man Charged with Heroin PossessionRead the Press Release
On October 6, 2015, Conrad Valdez, Jr., 45, of Selma, California, was charged by indictment with possession with intent to distribute more than one kilogram of heroin, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
The offense occurred on September 27, 2015, in Effingham County. Valdez made his initial appearance in federal court on October 15, 2015. He was ordered held without bond pending a December 21, 2015, jury trial.
The heroin offense carries a penalty of a minimum of 10 years, to a maximum of life in federal prison, to be followed by at least 5 years of supervised release, and a fine of up to $10,000,000.
Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The ongoing investigation is being conducted by the Drug Enforcement Administration, Central Illinois Enforcement Group and Illinois State Police. The Effingham County State’s Attorney’s Office assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.