Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Monday 19 October 2015
Bridgeport Man Admits Participating in Steroid Manufacturing and Distribution ConspiracyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JASON CHICKOS, 46, of Bridgeport, pleaded guilty today in Hartford federal court to one count of conspiracy to distribute anabolic steroids.
According to court documents and statements made in court, a long-term investigation led by the Federal Bureau of Investigation, Drug Enforcement Administration and Homeland Security Investigations revealed that individuals, including a law enforcement officer, were receiving shipments of steroid ingredients from China and manufacturing and distributing wholesale quantities of steroids. The investigation also revealed that certain members of the conspiracy were distributing prescription pills, including oxycodone, as well as cocaine.
During the course of the investigation, law enforcement officers seized hundreds of vials of steroids, approximately 600 grams of raw testosterone powder, approximately 350 grams of powder cocaine, and four long guns.
In pleading guilty, CHICKOS admitted that he purchased anabolic steroids from another member of the conspiracy and distributed them to others. At the time, CHICKOS was a civilian dispatcher with the Newtown Police Department.
CHICKOS is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on January 11, 2016, at which time he faces a maximum term of imprisonment of 10 years.
CHICKOS was arrested on April 29, 2015, and is released on a $100,000 bond.
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations, with the assistance of the U.S. Marshals Service, U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Robert M. Spector.
Baltimore Robber Sentenced to 12 Years in Prison for the Armed Robbery of a Grocery Store and the Attempted Robbery of a PharmacyRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Darryl Green, a/k/a “Showboat,” age 47, of Baltimore, Maryland, today to 12 years in prison, followed by three years of supervised release for a robbery conspiracy and for committing a robbery.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Interim Commissioner Kevin Davis of the Baltimore Police Department; Baltimore County State’s Attorney Scott Shellenberger; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to Green’s plea agreement, in March 2014, Green and co-defendant Antwan Travers planned to commit an armed robbery at a pharmacy in Baltimore. According to his plea agreement, on March 19, 2014, Travers drove Green to the store and waited outside as the getaway driver. Green entered the store and asked an employee about medication for pink eye. At the time, the employee was holding her two-month old baby. The employee’s husband was also in the store. Green pointed a long-barreled BB pistol at the employee and her baby and said, “I’m going to kill the baby.” He then ordered the employee to move towards the cash register. The employee and her husband activated a loud panic alarm, and Green fled the store. Travers drove Green away from the pharmacy.
Green and Travers also attempted to rob a grocery store in Reisterstown, Maryland, on March 27, 2014. Travers drove Green to the supermarket. Green entered the store and asked a store employee about purchasing a Keno card. Green then pointed a handgun at the employee and demanded money from the register. Green said, “You better make it quick or I’m going to shoot you.” Green stole about $5,000 from the supermarket. According to Travers’ plea agreement, he drove away before Green could escape. Green attempted to run away, but he was quickly caught by members of the Baltimore County Police Department. Officers found the gun that Green had used during the robbery, a loaded .380 caliber handgun with an obliterated serial number, near the location where Green was arrested. Officers also found the stolen money, about $5,000, in a plastic bag.
Antwan Travers, age 45, of Baltimore, previously pleaded guilty to his role in the robberies and is scheduled to be sentenced on November 16, 2015 at 3:00 p.m.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department, Baltimore City Police Department and the Baltimore City and Baltimore County State’s Attorney’s Offices for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Bonnie S. Greenberg and Joshua Ferrentino, who are prosecuting the case.
Bakersfield Couple Sentenced to Prison for Mortgage Fraud SchemeRead the Press Release
FRESNO, Calif. — Two Bakersfield residents were sentenced Tuesday by Senior United States District Judge Anthony W. Ishii in connection with a mortgage fraud scheme in Bakersfield, United States Attorney Benjamin B. Wagner announced.
Lucia Yolanda Chavez, 37, was sentenced to four years in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $1.8 million in restitution. Joseph Chavez, 41, was sentenced to three years in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $1.44 million in restitution. Lucia Chavez was also ordered to forfeit her interest in approximately $110,000 seized from a bank account, and to pay a personal forfeiture money judgment of $1.6 million. Joseph Chavez was ordered to pay a personal forfeiture money judgment of $3 million.
According to court documents, from 2007 to 2010, the Chavez defendants conspired with other co-defendants to use straw buyers to purchase residential properties in Bakersfield developed by Pershing Partners LLC (Pershing Partners), owned by Lucia Chavez, and by Jara Brothers Investments (JBI), owned by co-defendants Eliseo Jara and Sergio Jara. The conspirators paid straw buyers to purchase the properties from Pershing Partners and JBI, and funded the purchases using loans they obtained for the straw buyers from lenders based on false and fraudulent loan applications. The conspirators used Paragon Home Mortgage to obtain and process loans in furtherance of the conspiracy. Lucia Chavez had also been employed at Paragon Home Mortgage since approximately August 2006, and acquired ownership of Paragon Home Mortgage from co-defendants Eliseo Jara Jr. and Sergio Jara in 2007. Joseph Chavez was employed as a loan officer and office manager at Paragon Home Mortgage from approximately June 2006 to October 2007. Joseph Chavez and Lucia Chavez pleaded guilty on April 10, 2015.
The loan applications in the names of straw buyers frequently contained false statements concerning the straw buyers’ employment status, income, assets, intent to occupy the properties as their personal residences, and source of down payments for the purchase of the properties. The conspirators concealed from the lenders that the property developers funded certain of the straw buyers’ down payments. The conspirators also submitted false supporting documentation to lenders such as false and altered bank account statements purporting to show that straw buyers had high bank account balances, false verifications of the straw buyers’ bank account funds, false verifications of rent purporting to be from straw buyers’ landlords, false pay stubs, and false verifications of employment.
This case is the product of an investigation by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk E. Sherriff and Henry Z. Carbajal III prosecuted the case.
On October 13, 2015, co-defendants Eliseo Jara and Sergio Jara were each sentenced to six and a half years in prison, and co-defendant Melissa Jara was sentenced to five years on supervised release. Co-defendant Antonio Perez-Marcial was sentenced on May 12, 2014, to three years and 10 months in prison, and co-defendant Arlene Jeanette Mojardin was sentenced on May 18, 2015, to two and a half years in prison, for their roles in the conspiracy. Co-defendant Candace Gonzales previously pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud, and her sentencing hearing is currently set for October 26, 2015. Co-defendant Ricardo Salinas previously pleaded guilty to bank fraud, and his sentencing is also currently set for October 26, 2015.
Attorney Pleads Guilty to Stealing $1.8 Million from Oxford Woman's EstateRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PETER M. CLARK, 57, of Woodbury, waived his right to indictment and pleaded guilty today in New Haven federal court to one count of mail fraud related to his stealing more than $1.8 million from the estate of an Oxford woman who died in 2010.
According to court documents and statements made in court, Miriam S. Strong of Oxford died on July 2, 2010. At the time of her death, Strong had a will, which left money, property and other items to a list of individuals, the Town of Oxford, the State of Connecticut and several religious and other charitable entities. The will also called for the creation of a scholarship fund for college-bound students from Oxford. CLARK drafted the will as Strong’s attorney and served as a witness to Strong’s execution of the will. The will named CLARK and another individual as co-executors. The investigation has revealed that, during the course of the administration of the will, CLARK took more than $1.8 million from Strong’s estate for his own use.
CLARK was arrested on a federal criminal complaint on May 21, 2015. He is scheduled to be sentenced by U.S. District Judge Janet Bond Arterton on January 13, 2016, at which time he faces a maximum term of imprisonment of 20 years and a maximum fine of more than $3.6 million. CLARK also has agreed to make restitution in the amount of $1,828,986.87.
CLARK is released on a $500,000 bond.
This matter is being investigated by the Federal Bureau of Investigation and the Connecticut State Police – Western District Major Crime Squad. The case is being prosecuted by Assistant U.S. Attorney Sarah P. Karwan.
Aplington Woman Sentenced to Ten Months in Federal Prison for Social Security FraudRead the Press Release
A woman who committed Social Security Fraud for approximately eleven years was sentenced today in federal court in Cedar Rapids.
Angela Carmichael, age 49, from Aplington, Iowa, received the prison term after a July 2, 2015, guilty plea to one count of Supplemental Security Income Benefits Fraud.
In her plea agreement, Carmichael admitted that, between June 2003 and June 2014, she hid that she was living with her husband from the Social Security Administration in order to continue to receive Supplemental Security Income benefits. Carmichael admitted she lied about not living with her husband in order continue to receive benefits to which she would not otherwise have been entitled. During this period of time, Carmichael received over $68,000 in benefits. At sentencing, Carmichael also admitted she fraudulently received nearly $50,000 in Medicaid and food stamp benefits from the State of Iowa at the same time.
Carmichael was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Carmichael was sentenced to ten months’ imprisonment. A special assessment of $100 was imposed and she was ordered to make $117,938.84 in restitution. She must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and investigated by the Social Security Administration Office of Inspector General.
Court file information is available at https://ecf.iand.uscourts.gov/. The case file number is 15-CR-2010.
Follow us on Twitter @USAO_NDIA.
Albuquerque Man Pleads Guilty to Violating the Hobbs Act in Case Arising Out of Armed Robbery of Albuquerque Businesses Involved in Interstate CommerceRead the Press Release
ALBUQUERQUE – Reyes Lujan, 27, of Albuquerque, N.M., pleaded guilty today in federal court to violating the Hobbs Act, by participating in the armed robbery of a Walmart Store in Albuquerque on Oct. 29, 2014. Under the terms of his plea agreement, Reyes Lujan will be sentenced to 71 months in prison followed by a term of supervised release to be determined by the court.
Reyes Lujan was arrested on Feb. 9, 2015, on an indictment charging him and five co-defendants with violating the Hobbs Act by robbing a business engaged in interstate commerce and firearms charges. Count 1 of the indictment charged Reyes Lujan and five other Albuquerque residents, Raymond Castillo, 26, Daniel Maestas, 35, Johnny Ramirez, 30, Frank Gallegos, 30, and Henry Lujan, 22, with conspiracy to violate the Hobbs Act. Count 2 charged the six men with interfering with interstate commerce by robbing a Wal-Mart Store in Bernalillo County, N.M., on Oct. 29, 2014. Count 3 charged Castillo with brandishing a firearm during the robbery of the Wal-Mart store, and Count 4 charges Maestas with using and carrying a firearm during that robbery. Count 5 charged Ramirez, Gallegos, Reyes Lujan and Henry Lujan with aiding and abetting the use of firearms during the robbery.
The indictment was subsequently superseded in May 2015, by adding a new defendant, Reynaldo Marquez, 25, of Albuquerque, and two new counts. The new Count 6 charged Castillo and Marquez with interfering with interstate commerce by robbing a 7-11 convenience store located in Bernalillo County on Dec. 7, 2014. The new Count 7 charges Marquez with discharging a firearm during that robbery.
During today’s change of plea hearing, Reyes Lujan entered a guilty plea to Count 2 of the superseding indictment charging a violation of the Hobbs Act. According to the plea agreement, Reyes Lujan and his co-defendants planned the Oct. 29, 2014, robbery of the Walmart Store located at 400 Eubank NE in Albuquerque. Reyes Lujan, who was not armed, was dropped off outside of the store to act as a “lookout” in the parking lot while two of his co-defendants went inside the Walmart Store and stole a rolling safe.
Reyes Lujan’s six co-defendants have entered pleas of not guilty to the superseding indictment. Charges in indictments are merely accusations, and all criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
The United States has agreed to separate trials for Counts 1 through 5 of the superseding indictment and Counts 6 and 7.
If convicted on Counts 1 and 2, the conspiracy charge and the first Hobbs Act charge, the defendants each face a statutory maximum penalty of 20 years in prison. A conviction on Counts 4 and 5, using and carrying a firearm during a crime of violence or aiding and abetting the use of a firearm, each carries a mandatory five-year prison sentence which must be served consecutive to any sentence imposed on the conspiracy and Hobbs Act charges. If Castillo is found to be a career offender and convicted after trial on Count 3 of the superseding indictment, he faces an enhanced sentence of prison term of 360 months to life imprisonment.
Castillo and Marquez each face a statutory maximum penalty of 20 years if convicted on Count 6 of the superseding indictment. If convicted of discharging a firearm as charged in Count 7, Marquez faces a mandatory minimum of ten years in prison which must be served consecutive to any sentence imposed on him for a conviction on Count 6.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department. Assistant U.S. Attorneys Norman Cairns and Samuel A. Hurtado are prosecuting this case.
This case is being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. In recognition that New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community has come together to is collaborating the initiative is significantly exceed the national average.
Friday 16 October 2015
Winchester Man Pleads Guilty to Computer CrimeRead the Press Release
HARRISONBURG, VIRGINIA – A Winchester man, who previously worked in the IT department of a Winchester-based company, pled guilty yesterday in the United States District Court for the Western District of Virginia in Harrisonburg to a federal computer crime.
Christopher T. Wood, 41, of Winchester, Va., waived his right to be indicted and pled guilty yesterday to a one count Information charging him with intentionally accessing and exceeding authorized access to a computer.
“The prosecution of Mr. Wood should serve as notice to all that the United States Attorney’s Office and our partners in law enforcement will investigate and punish those individuals who access protected computers without authorization and with the intent to cause mischief,” United States Attorney Anthony P. Giorno said yesterday.
“The Richmond Division’s Computer Intrusion Squad has a talented team of experienced and technically trained agents who are motivated to aggressively pursue both national security and criminal intrusion matters,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division.
According to evidence presented at yesterday’s guilty plea hearing by Assistant United States Attorney Grayson Hoffman through a filed statement of facts, Wood worked for a company, “Victim Company,” that had offices and operations in Winchester, Virginia. Wood worked as a web developer in the IT department at Victim Company.
On or about January 8, 2014, the defendant was laid-off from Victim Company. As a result, Victim Company deactivated Wood’s electronic credentials which had given him access to the company’s internal computer network and file server systems. Shortly after being laid-off, Wood went home to his residence in the Winchester area, and through his home computer, remotely logged onto Victim Company’s computer system using another employee’s credentials, without that employee’s knowledge or consent.
Wood accessed Victim Company’s database, without their consent, and deleted many files from the company’s servers and disabled some of Victim Company’s accounts. When Victim Company noticed the damage they contacted law enforcement.
On February 4, 2015, law enforcement investigators interviewed Wood at his home, at which time he admitted to logging onto the company’s computer system, without their consent, and while using another employee’s credentials. He admitted that he deleted files and disabled accounts because he was upset about losing his job. IP information obtained by investigators corroborate that a computer in Wood’s home did in fact access Victim Company’s computer systems. It was later determined that Victim Company spent approximately $61,710 as a result of the damage caused by the defendant’s actions.
At sentencing, Wood faces a maximum possible penalty of up to one year in prison and/or a fine of up to $100,000. The defendant has also agreed to pay $61,710 in restitution to Victim Company for the damage caused by his actions.
The investigation of the case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Grayson Hoffman is prosecuting the case for the United States.
Williamsburg Attorney Indicted in Timeshare Scheme Resulting in Loss of $1.3 millionRead the Press Release
NEWPORT NEWS, Va. – A Williamsburg attorney was arrested today on a federal indictment returned yesterday, charging her with participating in a conspiracy to commit mail and wire fraud, as well as numerous counts of mail fraud, wire fraud and aggravated identity theft related to the transfer of thousands of timeshare units into the names of stolen identities and straw owners.
According to court documents and court proceedings, Deborah M. Wagner, 43, of Williamsburg, participated in a timeshare scheme with Keith Kosco, Julie Duffield, Brendan Hawkins and others. Keith Kosco owned and operated a number of entities involved in travel, tourism and timeshare businesses including Resort Realty, Inc., Resort Solutions, Inc., and Exotic Equity Transfers, LLC (EET). Brendan Hawkins owned and operated another timeshare transfer business known as GoodBye Timeshares (GoodBye). A timeshare unit, generally a fully furnished resort accommodation, is a deeded or non-deeded interest in real estate divided into intervals, most commonly by week. Since at least 2007, EET and GoodBye conducted timeshare transfers in exchange for fees charged to the original owner. It was represented to the seller of the timeshare that clean title would pass to the new owner with no further obligations of timeshare ownership (including maintenance fees) on the original owner once the transfer was complete.
Transfer paperwork was handled by EET in coordination with Professional Closing Company which served as a third party closing entity, and was operated by co-defendant Julie Duffield. In 2013, Wagner and her firm took over these duties for EET and had worked with Hawkins since at least 2011. From at least 2009 – 2013, Kosco, Duffield, Hawkins, and their employees conducted fraudulent transfers of over 1,000 timeshare units into the names of stolen identities. The defendants collected fees for conducting the transfers from the original owners. None of the stolen identities / straw buyers paid the required maintenance fees or taxes on the timeshare units, resulting in over $1,300,000 in losses to select resorts for the unpaid fees. Kosco, Duffield, Hawkins, and their employees, engaged in various fraudulent acts in support of the scheme, including false statements and promises to resorts, propping up stolen identities with email accounts, bank accounts and tax returns, falsely notarizing signatures and preparing fraudulent deed paperwork. The transfers also had a devastating impact on the credit of the stolen identities/straw buyers. Wagner participated in the scheme from 2011 – 2013 working with both Kosco and Hawkins and their respective companies. It is alleged that she transferred many timeshare units into the names of stolen identities and straw owners, resulting in hundreds of thousands of dollars in losses to the affected resorts due to lost maintenance fees and taxes.
Julie Duffield pleaded guilty and was sentenced to 26 months in prison and ordered to pay restitution, jointly with Kosco, in excess of $740,000. Kosco pleaded guilty and was sentenced to 74 months in prison. In a related case, Brendan Hawkins pleaded guilty and was sentenced to 46 months in prison and ordered to pay more than $500,000 in restitution.
Wagner faces a maximum penalty of 20 years in prison if convicted on each of the mail and wire fraud counts and a mandatory minimum term of 24 months in prison on the aggravated identity theft charges. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, made the announcement after Wagner’s initial appearance before U.S. District Magistrate Judge Lawrence R. Leonard. Assistant U.S. Attorneys Brian J. Samuels and Kaitlin C. Gratton are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:15cr28.
###
Vahan Kelerchian Found Guilty by Jury TrialRead the Press Release
HAMMOND – United States Attorney for the Northern District of Indiana, David Capp, announced that Vahan Kelerchian, 56, of Richboro, Pennsylvania, doing business as Armament Services International “ASI”, was found guilty of a multitude of charges relating to the acquisition of machineguns and restricted laser aiming sites, late Thursday evening after a two-week jury trial.
According to evidence presented at trial, Kelerchian conspired with Joseph Kumstar and Ronald Slusser, two now former Lake County Police Officers, to knowingly make false statements relating to the acquisition of firearms. Kumstar and Slusser, who have plead guilty, used their positions as sworn law enforcement officers in coordination with Kelerchian using his position as a Class 3 Federal Firearms Licensee to acquire approximately 71 fully automatic machineguns in the name of the Lake County Sheriff’s Department knowing that the Lake County Sheriff’s Department was not going to be the true owner of these weapons. Kelerchian, Kumstar and Slusser conspired to use law enforcement letter head to create letters which falsely represented that the machineguns were going to be used by the Lake County Sheriff’s Department to carry out its law enforcement responsibilities since machineguns manufactured after 1986 can only be acquired by law enforcement agencies and not individual officers. The machineguns were purchased for a cost of $1200 and $1600 and then when received by the Sheriff’s Department, transported offsite to be parted out. The barrels (also known as the “upper”) were split with the officers and some were sent back to Kelerchian. The “uppers” sold between $3000 and $3600 due to post-1986 parts not being available to the public because only law enforcement agencies or the military can acquire these weapons.
Kelerchian also used his company to assist Kumstar and Slusser to acquire 74 restricted laser aiming sights again using law enforcement letterhead from the Lake County Sheriff’s Department and the Lowell Police Department. These laser sights were restricted by the Food and Drug Administration because they were class 3b lasers. These lasers were designed, per a variance from FDA, to be used for law enforcement and military use only because they did not have the audible or manual safety locks as required for class 3b lasers. The laser aiming sights had a visible laser that could be seen in excess of 50 feet and an invisible laser that could be used for targeting with infrared goggles in excess of 1 mile. Kelerchian along with the officers used their positions to acquire these devices and sell them to the general public or keep the devices for themselves.
In addition to the charges above, Kelerchian was also found guilty of money laundering and false statements to the Bureau of Alcohol, Tobacco, Firearms and Explosives regarding false demonstration letters involving high powered belt-fed machine guns. Kelerchian was also charged with bribery but was found not guilty of that accusation.
This case is a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Department of Defense Criminal Investigative Services; Federal Bureau of Investigation; Food and Drug Administration, Office of Criminal Investigations; and the Internal Revenue Service, Criminal Investigation Division. This case was prosecuted by Assistant United States Attorneys Philip C. Benson and Thomas M. McGrath.
# # #
Upcoming Conference to Highlight the Rights of People with DisabilitiesRead the Press Release
Over 55 million Americans—nearly 20 percent of our population—live with a disability. This year commemorates the 25th anniversary of the passage of the Americans with Disabilities Act, the federal law that requires businesses, public services, and telecommunications to provide reasonable accommodations to people with disabilities.
The ADA was the result of a civil rights movement that continues in full force today. It was not so long ago that people with disabilities were regularly marginalized and separated from mainstream society, ridiculed as though living with physical or mental disabilities is not challenging enough.
Many trace the roots of the civil rights movement for people with disabilities back to World War I, when veterans returning with disabilities demanded that the government provide rehabilitation for the sacrifices they made in service to our nation. World War II brought with it another wave of returning veterans who again made disability issues visible to a nation indebted to them for their service.
Without federal legislation, however, people with disabilities still lacked the basic rights necessary for independence and self-reliance, and they were not afforded fair employment and economic opportunities.
As the 1960s civil rights movement spread across the nation, disability advocates seized the opportunity to join other minority groups, and an organizational structure emerged that focused the movement toward national goals, such as federal legislation to address physical and social barriers. In 1973, the Rehabilitation Act was passed, requiring equal employment opportunities and prohibiting discrimination against people with physical or mental disabilities within the federal government. These protections were extended to cover federally funded programs and public services.
In 1975, the Education for All Handicapped Children Act was passed, guaranteeing equal access to public education for children with disabilities. And in 1990, it was further refined into the Individuals with Disabilities Education Act, which mandated full inclusion of children with disabilities.
With those successes in hand, the movement turned toward equal treatment of people with disabilities more broadly, seeking an enforceable right to full participation and integration in all levels of society. When the ADA was signed into law in 1990, our nation made a bold statement to itself and to the rest of the world, that people with disabilities are entitled to equal access to employment opportunities, public services, places of public accommodation, transportation, and telecommunications services.
Of course, passing a federal law does not remedy problems overnight. Over the years, many battles have been fought to enforce the demands of the ADA, and many still remain.
As the state’s chief federal law enforcement official, I am keenly aware that many question the federal government’s role and its priorities. But this should be beyond dispute: ours is a nation committed to ensuring that people with disabilities are able to lead independent, satisfying lives. Along with the Department of Justice, I stand by the commitment to enforce laws that foster that goal.
Please join us on October 21 at a Disability Rights Conference in Sioux Falls, which is free and open to the public. Speakers include Heather Abbott, a survivor of the Boston Marathon bombing, South Dakota native and Iraq War Veteran Corey Briest and his wife Jenny Briest, and South Dakota State Senator Billie Sutton and his wife, Kelsea Kenzy Sutton. For more information, please visit the conference link at: www.avera.org/disabilitiesconference
United States Settles False Claims Act Action against Estate and Trusts of Layton P. Stuart for $4 MillionRead the Press Release
The United States resolved for $4 million a False Claims Act action against the estate and trusts of the late Layton P. Stuart, former owner and president of One Financial Corporation, and its subsidiary, One Bank & Trust N.A., both based in Little Rock, Arkansas. One Bank, another victim of Stuart’s frauds that is now under new management, will receive an additional $6.9 million.
The United States’ complaint, filed earlier this year, alleged that Stuart and One Financial violated the False Claims Act by making false statements about the financial condition of One Financial and One Bank to induce the Department of the Treasury to invest Troubled Asset Relief Program (TARP) funds in One Financial.
“Today’s settlement is an important milestone in the recovery of TARP funds that were obtained under false pretenses and used for improper purposes,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to be vigilant in assuring the proper use of taxpayer funds.”
Congress created TARP in response to the financial crisis of 2008 to restore liquidity and stability to the financial systems of the United States. Under the Capital Purchase Program component of TARP, the Treasury invested capital in financial institutions in exchange for preferred stock or debt securities and other consideration.
In the lawsuit, the United States alleged that in 2009, Stuart, on behalf of One Financial, applied for a TARP investment. According to the United States, Stuart knowingly made false statements about the financial condition of One Financial and One Bank and about the intended use of the TARP funds. In particular, Stuart allegedly concealed serial frauds that he and other One Financial directors and One Bank executives had been committing, and intended to continue committing, on One Bank. The schemes involved Stuart’s diversion of One Bank funds for personal use, including Stuart’s purchase of luxury vehicles for his wife and children. Within two weeks of receiving the TARP funds, Stuart allegedly diverted $2.185 million into his personal accounts. Stuart was terminated from One Bank in September 2012.
“TARP’s Capital Purchase Program was designed to provide emergency assistance to banks and other financial institutions to facilitate lending to the American public, not for personal use of the bank holding company’s CEO,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP). “This settles the government’s claim that as CEO of One Financial Corporation, Layton Stuart applied for TARP using false records or statements causing Treasury to provide TARP funds intended for the benefit of the bank, and then immediately diverted millions for his own personal use. This is an important False Claims Act case to bring and recover TARP funds on behalf of taxpayers. SIGTARP will aggressively root out and investigate all fraud related to TARP.”
Stuart’s frauds were discovered through a federal investigation launched in 2013. The assets of Stuart’s estate and the trusts he had created were subject to a civil forfeiture action in the Eastern District of Arkansas. The civil forfeiture action was settled and dismissed contemporaneously with the False Claims Act settlement with the Stuart estate and trusts. Under these settlements, in addition to the $4 million recovered by the United States, $6.9 million will be received by One Bank and $4 million will be returned to the Stuart trusts.
“This resolution is a just and appropriate result,” said U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas. “It is due in large part to the parties working toward an end to the forfeiture proceeding that would help the bank and the taxpayers of the United States who loaned money to the bank in 2009. I am hopeful that our community will benefit immensely from this result.”
The government’s False Claims Act lawsuit remains pending against One Financial. Separate criminal actions against several former One Financial and former One Bank executives also remain pending in the Eastern District of Arkansas.
The investigation was conducted by the Internal Revenue Service-Criminal Investigation Division, the Office of SIGTARP, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Eastern District of Arkansas.
The case is captioned United States v. Estate of Layton P. Stuart, et al., No. 1:15-cv-01044-RDM (D.D.C.). The claims asserted by the government are allegations only and there has been no determination of liability.
United States Resolves $237 Million False Claims Act Judgment against South Carolina Hospital that Made Illegal Payments to Referring PhysiciansRead the Press Release
The Department of Justice announced today that it has resolved a $237 million judgment against Tuomey Healthcare System for illegally billing the Medicare program for services referred by physicians with whom the hospital had improper financial relationships. Under the terms of the settlement agreement, the United States will receive $72.4 million and Tuomey, based in Sumter, South Carolina, will be sold to Palmetto Health, a multi-hospital healthcare system based in Columbia, South Carolina.
“Secret sweetheart deals between hospitals and physicians, like the ones in this case, undermine patient confidence and drive up healthcare costs for everybody, including the Medicare program and its beneficiaries,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This case demonstrates the United States’ commitment to ensuring that doctors who refer Medicare beneficiaries to hospitals for procedures, tests and other health services do so only because they believe the service is in the patient’s best interest, and not because the physician stands to gain financially from the referral. The Department of Justice is determined to prevent the kind of abuses uncovered in this case, and we are willing to take such cases to trial to protect the integrity of the Medicare program.”
The judgment against Tuomey related to violations of the Stark Law, a statute that prohibits hospitals from billing Medicare for certain services (including inpatient and outpatient hospital care) that have been referred by physicians with whom the hospital has an improper financial relationship. The Stark Law includes exceptions for many common hospital-physician arrangements, but generally requires that any payments that a hospital makes to a referring physician be at fair market value for the physician’s actual services, and not take into account the volume or value of the physician’s referrals to the hospital.
The government argued in this case that Tuomey, fearing that it could lose lucrative outpatient procedure referrals to a new freestanding surgery center, entered into contracts with 19 specialist physicians that required the physicians to refer their outpatient procedures to Tuomey and, in exchange, paid them compensation that far exceeded fair market value and included part of the money Tuomey received from Medicare for the referred procedures. The government argued that Tuomey ignored and suppressed warnings from one of its attorneys that the physician contracts were “risky” and raised “red flags.”
On May 8, 2013, after a month-long trial, a South Carolina jury determined that the contracts violated the Stark Law. The jury also concluded that Tuomey had filed more than 21,000 false claims with Medicare. On Oct. 2, 2013, the trial court entered a judgment under the False Claims Act in favor of the United States for more than $237 million. The United States Court of Appeals for the Fourth Circuit affirmed the judgment on July 2, 2015.
“This case reinforces the need for hospitals to abide by the requirements of the Stark Law,” said U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.
The case arose from a lawsuit filed on Oct. 4, 2005, by Dr. Michael K. Drakeford, an orthopedic surgeon who was offered, but refused to sign, one of the illegal contracts. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The act allows the government to intervene and take over the action, as it did in this case. Dr. Drakeford will receive approximately $18.1 million under the settlement.
“The type of abusive compensation arrangements at issue in this case is precisely what the physician self-referral law was designed to prevent,” said Inspector General Dan Levinson of of the Department of Health and Human Services-Office of the Inspector General (HHS-OIG). “Patients need and deserve to know that the hospital services they receive are the product of sound medical judgment, rather than motivated by the physician’s financial interests. The extensive litigation and settlement in this case should send a signal to the hospital industry that these tainted financial relationships simply will not be tolerated.”
As part of the settlement announced today, Tuomey will be required to retain an independent review organization to monitor any arrangements it makes with physicians or other sources of referrals for the duration of the five-year Corporate Integrity Agreement.
This case 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 $16.1 billion of that amount recovered in cases involving fraud against federal health care programs. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, including the conduct described in the opinions of the trial and appellate courts in this case, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The judgment and resolution of the case were the result of a coordinated effort by the Civil Division’s Commercial Litigation branch, the U.S. Attorney’s Office of the Eastern District of North Carolina and HHS-OIG.
The case is captioned United States ex rel. Drakeford v. Tuomey Healthcare System, Inc., Case No. 3:05-cv-02858 (MBS) (D.S.C.).
United States Resolves $237 Million False Claims Act Judgment Against South Carolina Hospital That Made Illegal Payments to Referring PhysiciansRead the Press Release
WASHINGTON – The Department of Justice announced today that it has resolved a $237 million judgment against Tuomey Healthcare System for illegally billing the Medicare program for services referred by physicians with whom the hospital had improper financial relationships. Under the terms of the settlement agreement, the United States will receive $72.4 million and Tuomey, based in Sumter, South Carolina, will be sold to Palmetto Health, a multi-hospital healthcare system based in Columbia, South Carolina.
“Secret sweetheart deals between hospitals and physicians, like the ones in this case, undermine patient confidence and drive up healthcare costs for everybody, including the Medicare program and its beneficiaries,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This case demonstrates the United States’ commitment to ensuring that doctors who refer Medicare beneficiaries to hospitals for procedures, tests and other health services do so only because they believe the service is in the patient’s best interest, and not because the physician stands to gain financially from the referral. The Department of Justice is determined to prevent the kind of abuses uncovered in this case, and we are willing to take such cases to trial to protect the integrity of the Medicare program.”
The judgment against Tuomey related to violations of the Stark Law, a statute that prohibits hospitals from billing Medicare for certain services (including inpatient and outpatient hospital care) that have been referred by physicians with whom the hospital has an improper financial relationship. The Stark Law includes exceptions for many common hospital-physician arrangements, but generally requires that any payments that a hospital makes to a referring physician be at fair market value for the physician’s actual services, and not take into account the volume or value of the physician’s referrals to the hospital.
The government argued in this case that Tuomey, fearing that it could lose lucrative outpatient procedure referrals to a new freestanding surgery center, entered into contracts with 19 specialist physicians that required the physicians to refer their outpatient procedures to Tuomey and, in exchange, paid them compensation that far exceeded fair market value and included part of the money Tuomey received from Medicare for the referred procedures. The government argued that Tuomey ignored and suppressed warnings from one of its attorneys that the physician contracts were “risky” and raised “red flags.”
On May 8, 2013, after a month-long trial, a South Carolina jury determined that the contracts violated the Stark Law. The jury also concluded that Tuomey had filed more than 21,000 false claims with Medicare. On Oct. 2, 2013, the trial court entered a judgment under the False Claims Act in favor of the United States for more than $237 million. The United States Court of Appeals for the Fourth Circuit affirmed the judgment on July 2, 2015.
“This case reinforces the need for hospitals to abide by the requirements of the Stark Law,” said U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.
The case arose from a lawsuit filed on Oct. 4, 2005, by Dr. Michael K. Drakeford, an orthopedic surgeon who was offered, but refused to sign, one of the illegal contracts. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The act allows the government to intervene and take over the action, as it did in this case. Dr. Drakeford will receive approximately $18.1 million under the settlement.
“The type of abusive compensation arrangements at issue in this case is precisely what the physician self-referral law was designed to prevent,” said Inspector General Dan Levinson of of the Department of Health and Human Services-Office of the Inspector General (HHS-OIG). “Patients need and deserve to know that the hospital services they receive are the product of sound medical judgment, rather than motivated by the physician’s financial interests. The extensive litigation and settlement in this case should send a signal to the hospital industry that these tainted financial relationships simply will not be tolerated.”
As part of the settlement announced today, Toumey will be required to retain an independent review organization to monitor any arrangements it makes with physicians or other sources of referrals for the duration of the five-year Corporate Integrity Agreement.
This case 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 $16.1 billion of that amount recovered in cases involving fraud against federal health care programs. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, including the conduct described in the opinions of the trial and appellate courts in this case, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The judgment and resolution of the case were the result of a coordinated effort by the Civil Division’s Commercial Litigation branch, the U.S. Attorney’s Office of the Eastern District of North Carolina and HHS-OIG.
The case is captioned United States ex rel. Drakeford v. Tuomey Healthcare System, Inc., Case No. 3:05-cv-02858 (MBS) (D.S.C.).
U.S. Attorney Announces Takedown of Major Synthetic Drug Distribution Ring as Part of Nationally Coordinated ActionRead the Press Release
FRESNO, Calif. — A seven-count indictment has been unsealed, following the arrests of Haitham Eid Habash, aka Eddie Habash, 52, of Hawthorne; Zaid Elodat, 28, of Gardena; and Bakersfield residents Ramsey Jeries Farraj, 48, and Majed Bashir Akroush, aka Mike Akroush, 48, charging them with conspiring to manufacture, distribute, and possess with intent to distribute AB-Chminaca, AB-Pinaca, and XLR11, smokeable synthetic drugs that are Schedule I controlled substances, United States Attorney Benjamin B. Wagner announced.
Farraj is also charged with four separate counts of distributing the drugs. Akroush is charged with two counts of distributing AB-Chminaca, and Farraj and Elodat are charged with possessing AB-Chminaca and AB-Pinaca with intent to distribute. In addition, Farraj and Akroush are charged with conspiring to structure more than $3 million in proceeds derived from their Internet-based drug distribution businesses. The indictment also seeks to forfeit property and bank accounts owned by Habash, Akroush, and Farraj and the domain names of their drug distribution businesses, Blue Whale Store and World of Incense.
“Synthetic drugs are a serious public health threat and are endangering young people across the country,” said U.S. Attorney Wagner. “The chemicals in these drugs, usually manufactured in unsupervised factories in China, are not tested or approved for human consumption, and have led to psychotic episodes, seizures and deaths, even in small quantities. Stores should not sell them, and young people should not play Russian roulette by consuming them.”
DEA Acting Special Agent in Charge Bruce C. Balzano stated, “Synthetic drugs are dangerous, deadly poisons often marketed to attract teen and young adult use. These drugs are manufactured without quality controls and have unpredictable effects that can lead to grave consequences for the unsuspecting user. These arrests have dismantled a criminal network responsible for the manufacture and distribution of some very toxic drugs.”
The charges are part of a nationwide synthetic drug takedown in connection with Project Synergy Phase III that targeted the synthetic designer drug industry, including wholesalers, money launderers and other criminal facilitators. In connection with this case, federal law enforcement officers arrested the four defendants and executed 12 search warrants in Bakersfield and the Los Angeles area. Over 1,000 pounds of synthetic drugs, nearly a half a million dollars in cash and four firearms were seized.
The Drug Enforcement Administration (DEA), Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Customs and Border Protection (CBP), along with other federal, state, and local law enforcement concluded a 15-month, nationwide drug interdiction effort that resulted in 151 arrests in 16 states. In addition to curbing the flow of synthetic drugs into the country, Project Synergy III continues to reveal the flow of millions of dollars in U.S. synthetic drug proceeds to countries of concern in the Middle East.
In May 2013, DEA placed XLR11 in Schedule I after the Centers for Disease Control and Prevention found that acute kidney injury is associated with its ingestion. AB-Pinaca and AB-Chminaca were placed into Schedule I at the beginning of this year based on a finding that these drugs pose an imminent hazard to the public.
This case is the product of an investigation by the U.S. Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the California Highway Patrol, with assistance from the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the U.S. Postal Inspection Service, the California Department of Motor Vehicles, the Kern County Probation, the Kern County Sheriff’s Office, the Bakersfield Police Department, and the Los Angeles County Sheriff’s Office. Assistant United States Attorneys Karen A. Escobar, Grant B. Rabenn, and Jeffrey A. Spivak are prosecuting the case.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
If convicted of the drug charges, the defendants face a maximum statutory penalty of 20 years in prison and a $1 million fine. The structuring conspiracy carries a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Habash is in custody, Farraj was released on bond. A detention hearing has been ordered for Elodat and Akroush. The next court date for all defendants is January 11, 2016, before U.S. Magistrate Judge Barbara A. McAuliffe in Fresno.
Two California Residents Indicted on Conspiracy and Bank Fraud ChargesRead the Press Release
Tampa, Florida - United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Gary Hughes (35, San Diego, CA) and Jason Martin (36, Orange County, CA) with one count of mortgage fraud conspiracy involving bank fraud, and other related substantive charges. Hughes and Martin each face a maximum penalty of 30 years’ imprisonment for each count. The indictment also notifies the individuals that the United States is seeking a forfeiture money judgment for the proceeds of the charged mortgage fraud conspiracy.
According to the indictment and court proceedings, in 2005, entities controlled by co-conspirators entered into a contract to purchase The Arbors, an apartment complex in Hillsborough County, Florida. The new owners of The Arbors then engaged in a plan to convert the complex from rental apartments to condominium units.
Hughes and Martin’s co-conspirator, Brendan Bolger, aided the developers in the sale of numerous condominium units at The Arbors through his company, Capital Management Guarantee, LLC. In order to induce buyers to purchase units at The Arbors, Bolger created an addendum to the purchase contract that offered buyers various incentives, such as rental supplements, money to defray maintenance costs, and a design credit to upgrade the unit’s amenities. When the buyers cancelled the design credit within 10 days of signing the addendum, Bolger paid a kickback for the amount of the design credit to the buyer from Capital Management’s bank account. In this manner, Bolger and other co-conspirators failed to disclose to buyers’ mortgage lenders material facts about the financing of the sale of The Arbors condominium units. Bolger and others referred prospective buyers to Hughes and Martin to obtain financing for their unit purchases.
Hughes’s and Martin’s roles in the conspiracy as mortgage brokers consisted of originating mortgages for The Arbors units through Envision Lending and Set 2 Go Loans. The loan applications Martin and Hughes submitted contained material misrepresentations, including false occupancy and inflated borrower income and asset information. These loan applications were submitted to FDIC insured institutions and other mortgage lenders. Additionally, through their company, HUMAR Investments, Hughes and Martin provided the borrowers cash to close without disclosing the payments to the lenders.
An indictment is merely a formal charge that a defendant has violated one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay Hoffer.
Three Palm Beach County Residents Plead Guilty for Their Participation in Stolen Identity Tax Fraud Scheme Involving at Least 790 IdentitiesRead the Press Release
Three Palm Beach County residents recently pled guilty for their participation in a stolen identity tax fraud scheme involving at least 790 stolen identities.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Nadine Gurley, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of the Inspector General (HUD-OIG), and Karen Citizen-Wilcox, Special Agent in Charge, U.S. Department of Agriculture, Office of Inspector General (USDA-OIG), made the announcement.
Latonia Verdell, 40, and Kelli Witherspoon McIntosh, 39, both of Palm Beach County, (Case No. 14-CR-80158) and Starling Willis, 32, of West Palm Beach, (Case No. 15-CR-80119) have each pled guilty to aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1) and conspiracy to commit wire fraud, in violation of Title 18, United States Code, Sections 1343 and 1349. Verdell also pled guilty to being a felon in possession of a firearm, in violation of Title 18, United States Code, Section 922(g)(1); possessing fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3); theft of government property, in violation of Title 18, United States Code, Section 641; and making a false statement to a federal government agency, in violation of Title 18, United States Code, Section 1001(a)(2).
The defendants face a mandatory term of two years’ imprisonment, consecutive to any other prison term, for each of the aggravated identity theft charges, as well as a maximum statutory sentence of twenty years in prison for the conspiracy conviction. Verdell also faces a maximum of ten years in prison for each of the theft of government money, felon in possession and unauthorized access devices convictions; and a maximum of five years in prison for the false statement conviction.
According to court documents, Verdell, Willis and McIntosh, participated in a widespread stolen identity refund fraud scheme involving at least 790 stolen identities and personal identification information (PII). The PII was used to file fraudulent income tax returns online, with those refunds being directed to various bank accounts created and maintained by Verdell, McIntosh and Willis, as well as to reloadable debit cards. Identity theft victims whose personal information was used for this scheme spanned from Indian River, Highlands, St. Lucie, Martin and Palm Beach Counties, as well as persons outside the State of Florida. This scheme resulted in the submission to the IRS of more than 590 fraudulent returns in the names of other persons, seeking approximately $1.5 million in fraudulent income tax refunds.
Court documents also state that on September 1, 2010, while Verdell was receiving income from filing fraudulent income tax returns with the IRS, she received a housing assistance payment funded by the U.S. Department of Housing and Urban Development (HUD), while knowing she was not entitled to receive such a payment. On September 24, 2013, Verdell submitted an application for enrollment in the Supplemental Nutrition Assistance Program (SNAP), also sometimes known as ‘food stamps.’ In her application, Verdell knowingly stated that her only monthly income was $715, without any other source of income, when she was in fact receiving significant income from fraudulent tax refund payments.
Court documents also state that evidence of the stolen PII, a list of bank accounts belonging to Willis, information regarding accounts which received fraudulent refunds, and a stolen .38 caliber pistol, were found in Verdell’s home during the execution of a federal search warrant.
Sentencing hearings for Verdell, McIntosh and Willis will be scheduled by United States Senior District Judge Daniel T. K. Hurley.
Mr. Ferrer commended the investigative efforts of the IRS-CID, HUD-OIG, and USDA-OIG. Mr. Ferrer also thanked the Palm Beach County Sheriff’s Office for their assistance with this investigation and law enforcement operation. The case is being prosecuted by Assistant U.S. Attorney Theodore Cooperstein.
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.
Texas Man Sentenced for Hate Crime Involving the Assault of Elderly African-American ManRead the Press Release
A man from Katy, Texas, has been ordered to federal prison to serve a 71 month sentence following his conviction of a federal hate crime related to the racially-motivated assault of an 81-year-old African-American man, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas and Special Agent in Charge Perrye K. Turner of the FBI Houston Division.
Conrad Alvin Barrett, 29, was charged with violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. He pleaded guilty Jun. 30, 2015, admitting that on Nov. 24, 2013, he attacked the elderly African-American man because of the man’s race and color in what Barrett called a “knockout.”
Today, U.S. District Judge Gray Miller sentenced Barrett to 71 months in prison to be immediately followed by three years of supervised release. Barrett was further ordered to pay $2,000 in restitution.
“The defendant committed this shocking and violent assault against this vulnerable elderly man simply because he was African American,” said Principal Deputy Assistant Attorney General Gupta. “The Department of Justice will continue to work tirelessly to ensure that the rights of victims of violent crimes are vindicated.”
“The sentencing of the defendant today represents our office’s continuing commitment to enforce senseless acts that violate our federal civil rights laws,” said U.S. Attorney Magidson. “Every citizen is entitled to this protection.”
At the time of his plea, evidence revealed that Barrett recorded himself on his cell phone attacking the African-American man. In the recording, Barrett questions whether there would be national attention if he attacked a person of color. Barrett also claimed he would not hit “defenseless people” just moments before punching the elderly man in the face and with such force that the victim immediately fell to the ground. Barrett then laughed and said “knockout” as he ran to his vehicle and fled. The victim suffered two jaw fractures and was hospitalized for several days as a result of the attack.
The Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act was passed on Oct. 22, 2009, and signed into law by President Barack Obama six days later. Shepard was a gay student who was tortured and murdered in 1998 near Laramie, Wyoming. Byrd was an African American man who was tied to a truck by two white supremacists, dragged behind it and decapitated in Jasper in 1998.
Barrett will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of an investigation conducted by the FBI in cooperation with the Fulshear, Texas, and Katy Police Departments as well as the Drug Enforcement Administration. Trial Attorneys Saeed Mody and Olimpia Michel of the Civil Rights Division are prosecuting the case along with Assistant U.S. Attorneys Ruben R. Perez and Joe Magliolo of the Southern District of Texas, in cooperation with District Attorney John Healey of Fort Bend County, Texas.
Terrorist Sentenced to 20 Years in Prison for Providing Material Support to Al QaedaRead the Press Release
Haroon Aswat, 41, was sentenced today by U.S. District Court Judge Katherine B. Forrest of the Southern District of New York to 20 years in prison for terrorism offenses relating to Aswat’s efforts to establish a terrorist training camp in the United States. Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement.
Aswat was extradited to the United States from the United Kingdom on Oct. 21, 2014. Aswat pleaded guilty on March 30, 2015, to one count of conspiring to provide material support to al Qaeda and one count of providing material support to al Qaeda.
“Haroon Aswat provided material support to al Qaeda and plotted to establish a terrorist training camp on American soil,” said Assistant Attorney General Carlin. “Aswat was arrested more than 10 years ago, and his sentence is the result of the tireless and persistent efforts of law enforcement to hold accountable all those who wish to harm the United States, whether at home or abroad, no matter how long it takes.”
“Haroon Aswat, with his co-conspirators, sought to establish a terrorist training camp on American soil, and traveled to Afghanistan to receive training from al Qaeda,” said U.S. Attorney Bharara. “Arrested abroad in 2005, Aswat fought extradition for nearly 10 years, but faced with overwhelming evidence against him, pled guilty in Manhattan federal court to providing material support to al Qaeda shortly after arriving here. Aswat’s conviction and the sentence imposed today – along with the other recent terrorism prosecutions by this Office, including of Sulaiman Abu Ghayth, Abu Hamza, and Khaled al Fawwaz – serve as further proof that justice in international terrorism cases continues to be delivered in American civilian courts.”
According to the allegations contained in the indictment, statements made at related court proceedings including today’s sentencing, court fillings and evidence presented at prior trials:
In late 1999, Aswat, along with co-defendants Mustafa Kamel Mustafa aka Abu Hamza, Ouassama Kassir and Earnest James Ujaama, attempted to establish a terrorist training camp in the United States to support al Qaeda, which has been designated by the U.S. Secretary of State as a foreign terrorist organization. Aswat conspired with Abu Hamza, Kassir and Ujaama to establish the terrorist training camp on a rural parcel of property located in Bly, Oregon. The purpose of the Bly camp was for Muslims to receive various types of training – including military-style jihad training – in preparation to fight jihad in Afghanistan. As used by the conspirators in this case, the term “jihad” meant defending Islam against purported enemies through violence and armed aggression, including, if necessary, by using murder to rid Muslim holy lands of non-believers in Islam.
In a letter faxed from Ujaama in the United States to Abu Hamza in the United Kingdom, the property in Bly was described as a place that “looks just like Afghanistan,” and the letter noted that the men at Bly were “stock-piling weapons and ammunition.” In late 1999, after transmitting the faxed letter, Abu Hamza directed Aswat and Kassir, both of whom resided in London and attended Abu Hamza’s mosque there, to travel to Oregon to assist in establishing the camp. On Nov. 26, 1999, Aswat and Kassir arrived in New York, and then traveled to Bly.
Aswat and Kassir traveled to Bly for the purpose of training men to fight jihad. Kassir told witnesses that he supported Usama Bin Laden and al Qaeda, and that he had previously received jihad training in Pakistan. Kassir also possessed a compact disc that contained instructions on how to make bombs and poisons. After leaving Bly, Aswat and Kassir traveled to Seattle where they resided at a mosque for approximately two months. While in Seattle, Kassir, in Aswat’s presence, provided men from the mosque with additional terrorist training lessons – including instructions on different types of weapons, how to construct a homemade silencer for a firearm, how to assemble and disassemble an AK-47 and how an AK-47 could be altered to be fully automatic and to launch a grenade. On another occasion, with Aswat sitting by his side, Kassir announced to the men in Seattle that he had come to the United States for martyrdom and to destroy, and he informed his audience that some of them could die or get hurt.
Aswat subsequently linked up with al Qaeda and received training at al Qaeda’s al Faruq training camp in Afghanistan, which was al Qaeda’s primary training camp and where recruits were trained in topics that included military tactics, weapons and explosives. Aswat remained in Afghanistan after the terrorist attacks of Sept. 11, 2001, and after the United States invaded Afghanistan. A ledger recovered in September 2002 from an al Qaeda safe house in Karachi, Pakistan, listed a number of individuals associated with al Qaeda, including Aswat. The al Qaeda safe house was used by Khalid Sheikh Mohammed, al Qaeda’s chief operational planner and the alleged planner of the terrorist attacks of Sept. 11, 2001.
At the time of Aswat’s arrest in Zambia in 2005, he had a computer with him that contained, among other things: a book on survival skills in the event of a nuclear, biological and chemical weapon detonation; the “Anarchist Cookbook,” which contained instructions on how to make bombs and hack into computers; a hand-to-hand combat instruction manual, which noted that its purpose was to “teach you how you can kill another person with your own two hands;” the “Close Combat Textbook;” and the “Big Book of Mischief,” which also contained detailed and extensive instructions on how to make explosives.
* * *
Aswat was convicted of one count of conspiracy to provide material support to al Qaeda, and one count of providing material support to al Qaeda. In addition to the term of imprisonment, Judge Forrest sentenced Aswat to 20 years and imposed a $200 special assessment. Judge Forrest also ordered that Aswat be removed from the United States to the United Kingdom following the completion of his sentence.
Abu Hamza and Kassir were previously convicted for their roles in attempting to establish a terrorist training camp in the United States. On May 12, 2009, after a four-week jury trial in the Southern District of New York, Kassir was found guilty of charges relating to his efforts to establish the terrorist training camp in Bly and his operation of several terrorist websites. On Sept. 15, 2009, U.S. District Judge John F. Keenan of the Southern District of New York sentenced Kassir to life in prison.
On May 19, 2014, after a four-week jury trial in the Southern District of New York, Abu Hamza was found guilty of charges relating to his role in the conspiracy to establish the terrorist training camp in Bly, as well as his role in a hostage-taking in Yemen in 1998 that resulted in four deaths and his support of violent jihad in Afghanistan in 2000 and 2001. On Jan. 9, 2015, Judge Forrest sentenced Abu Hamza to life in prison.
Assistant Attorney General Carlin and U.S. Attorney Bharara praised the outstanding efforts of the FBI’s Manhattan-based Joint Terrorism Task Force, the U.S. Marshals Service and the Metropolitan Police Department of London. The Criminal Division’s Office of International Affairs also provided significant assistance.
The case was prosecuted by Assistant U.S. Attorneys John P. Cronan, Ian McGinley, Shane T. Stansbury and Edward Y. Kim of the Southern District of New York, and Trial Attorney Erin Creegan of the National Security Division’s Counterterrorism Section.
Solon man sentenced to two years in prison for murder-for-hire plotRead the Press Release
A Solon man was sentenced to more than two years in prison for his role in murder-for-hire plot, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.
Dennis A. Totarella, 66, was sentenced to 27 months in prison and fined $40,000. He was previously found guilty of one count of use of an interstate communication facility to commit murder for hire.
Totarella, working with James Martino, used cellular telephones and Internet websites as part of a plot to murder someone in exchange for $40,000. This took place between January and June 2013, according to court documents.
Martino, of Highland Heights, has pleaded guilty for his role in the offense and is scheduled to be sentenced Dec. 15.
This case is being prosecuted by Assistant U.S. Attorneys Duncan Brown and M. Kendra Klump following an investigation by the Federal Bureau of Investigation.
Six Defendants Indicted and Three Plead Guilty in $1.4 Million Unemployment Benefit Fraud SchemeRead the Press Release
Baltimore, Maryland – A federal grand jury has indicted six defendants on fraud and identity theft charges involving a scheme to fraudulently obtain unemployment insurance benefits:
Diameter Jeffrey Akala, age 42, of Silver Spring, Maryland;
Wilfred Mendez, age 21, of Bronx, New York;
Eric Gonzalez, age 33, of Alexandria, Virginia;
Tawana McClain, age 50, of Washington, D.C.;
Ferny Alexander Moreno Puente age 23, of Gaithersburg, Maryland;
Wilfredo Torres, age 35, of Alexandria, Virginia.
The indictment was returned on October 13, 2015 and unsealed today. Three other defendants have pleaded guilty to their participation in the scheme:
Dulce Oleo, age 38, of the Bronx, New York;
Yaw Bempa-Boateng, age 35, of Silver Spring, Maryland; and
Carmen Benitez, age 29, of Scranton, Pennsylvania.
The indictment and guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division.
“Today's guilty pleas send a strong message that schemes to defraud the unemployment insurance program will not be tolerated,” stated Steven Anderson, Special Agent in Charge, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in Washington, DC. “The Office of Inspector General will continue to work cooperatively with our law enforcement partners to aid in the identification and prosecution of individuals engaged in these types of crimes.
According to the 11 count indictment, from March 2012 to May 2015, the defendants caused the Maryland Department of Labor, Licensing and Regulation (DLLR) and the Pennsylvania Department of Labor and Industry (DLI), which administered the unemployment insurance benefit programs in their respective states, to issue unemployment benefits in the names of individuals by submitting false applications for monetary benefits for their own personal use and benefit.
The indictment alleges that members of the conspiracy obtained the personal identities of other individuals, including Maryland residents. Akala filed false documentation with DLLR and DLI in the names of fictitious companies. The filings falsely stated that the fictitious companies employed and paid wages to actual individuals. In fact, no unemployment insurance taxes were paid over to DLLR or DLI in the names of the fictitious companies.
According to the indictment, members of the conspiracy fraudulently used residential mailing addresses of co-conspirators in Maryland, New York, the District of Columbia, Pennsylvania and Virginia to register and receive correspondence for the fictitious companies, and apply for and receive prepaid debit cards containing fraudulently obtained unemployment benefits. In exchange for the use of their addresses, the co-conspirators received funds obtained through the fraud, typically in the form of a fraudulently obtained prepaid debit card. Members of the conspiracy regularly contacted DLLR and DLI, falsely representing themselves either to be a representative of one of the fictitious companies or an individual entitled to unemployment benefits. Akala moved regularly between different states in order to retrieve correspondence addressed to fictitious companies and individuals, including prepaid debit cards issued by DLLR and DLI.
The co-conspirators used the prepaid debit cards at ATMs or stores in order to withdraw and use approximately $1,468,463.80 in fraudulently obtained unemployment insurance benefits. The indictment seeks forfeiture of at least that amount.
Akala, Mendez, Gonzalez, McClain, Moreno Puente and Torres face a maximum sentence of 20 years in prison for conspiring to commit wire fraud and for wire fraud. Akala and Mendez also face a mandatory minimum sentence of two years in prison for aggravated identity theft consecutive to any other sentence imposed. Moreno Puente and Torres are expected to have their initial appearances today in federal court in Virginia, and Gonzalez is expected to have his initial appearance today in federal court in Greenbelt. Akala is detained pending a detention hearing scheduled for October 20, 2015 at 2:30 p.m. McClain and Mendez were released under the supervision of pretrial services.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
In related cases, Bempa-Boateng, Benitez and Oleo have pleaded guilty to their participation in the conspiracy. Bempa-Boateng admitted that he initially agreed to have a co-conspirator file unemployment claims in his name, and eventually filed multiple false claims on his own behalf. Benitez agreed to use a Maryland unemployment insurance card and debit cards that the co-conspirator obtained for her through false means, to fraudulently withdraw benefits funds. Oleo admitted that she provided the conspirator with personal identifying information of others in order to file false unemployment claims; and personally used at least 10 fraudulently obtained unemployment insurance cards. Bempa-Boateng, Benitez and Oleo have each agreed to the entry of an order to pay restitution and forfeiture of $801,710.40; $388,378 and $191,122, 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 the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the Department of Labor – OIG and U.S. Postal Inspection Service for their work in the investigation, and praised the Maryland Department of Labor, Licensing and Regulation and the Pennsylvania Department of Labor and Industry for their assistance in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Sean R. Delaney, who is prosecuting the case.
Sheppard Pratt Director and Her Husband Plead Guilty in Illegal $2.7 Million Billing SchemeRead the Press Release
Baltimore, Maryland –Lyneth Nyabiosi, age 50, and her husband, Willie Evans III, a/k/a “James Davies” and “James Davis,” age 53, both of Bear, Delaware, pleaded guilty today to conspiring to commit mail fraud arising from a scheme to falsely bill Nyabiosi’s employer, Sheppard Pratt Health Systems, for approximately $2.5 million for work purportedly performed by a company that the defendants secretly controlled.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
Sheppard Pratt Health System is a private, non-profit health system in Maryland which offers mental health, substance use and special education services. Sheppard Pratt’s main campus is located in Towson, Maryland. From November 2005 to September 2014, Nyabiosi was the director of the Health Information Management Department (HIM Department) of Sheppard Pratt. The department was responsible for maintaining patient medical records. As the director, Nyabsiosi was the highest ranking employee in the HIM Department.
According to their plea agreements, Nyabiosi and Evans controlled and operated an entity named Information Management Solutions Technology (IMST), which was designed to appear as an independent third party contractor, but was in fact created by the defendants to execute the fraud scheme. On March 7, 2007, Nyabiosi, on behalf of Sheppard Pratt, entered into a contract with IMST to manage medical records for Sheppard Pratt. Nyabiosi never informed Sheppard Pratt that she and her husband were affiliated with IMST, in violation of Sheppard Pratt’s conflict of interest policy. To further hide their affiliation with IMST, Evans signed the contract on behalf of IMST as “James Davies,” a purported regional account representative at IMST. Thereafter, Evans continued to represent himself to Sheppard Pratt staff as “James Davis,” an account representative, even though no such person was ever affiliated with IMST.
From 2007 to 2014, the defendants submitted over 180 false invoices requesting that Sheppard Pratt pay IMST for work which was never performed, or for excessively inflated amounts for the work that was actually performed. For example, IMST picked up at most approximately 2,863 boxes of patient records from Sheppard Pratt for short-term storage, yet the invoices falsely represented that IMST had picked up over 500,000 boxes of patient records. Other invoices and documents provided to Sheppard Pratt falsely represented that IMST had picked up and was storing 20,270 boxes of records from the company Iron Mountain, when in fact, IMST never picked up a single box. And on two separate occasions in 2009, the defendants sent invoices to Sheppard Pratt for purported work on a project to digitize older patient records. The defendants paid a third party company $26,395 to complete the work, but they billed Sheppard Pratt $546,510.
Nyabiosi personally approved all of the false invoices, causing Sheppard Pratt to mail checks to IMST totaling $2,742,791. The defendants deposited the money in their bank account for their personal use.
In September 2014, the law firm representing Sheppard Pratt contacted “James Davis” using IMST contact information provided by the defendants. On September 4, 2014 and September 14, 2014, counsel for Sheppard Pratt met with Evans, who falsely represented himself to be “James Davis” and never revealed himself to be Nyabiosi’s husband. Evans falsely told the law firm that he, “James Davis,” alone owned IMST and was in charge of running the business.
The defendants have agreed to the entry of an order to forfeit and pay restitution of $2,742,791, and to forfeit two residences located in Bear and Newark, Delaware and three vehicles.
The defendants face a maximum sentence of 20 years in prison for conspiring to commit mail fraud. U.S. District Judge James K. Bredar has scheduled sentencing for Nyabiosi and Evans for February 4 and 5, 2016, respectively, both at 9:30 a.m.
United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant United States Attorney Rachel M. Yasser, who is prosecuting the case.
Shelton Man Admits Role in Steroid Manufacturing and Distribution ConspiracyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MARK BERTANZA, 34, of Shelton, pleaded guilty today in Hartford federal court to one count of conspiracy to distribute anabolic steroids.
According to court documents and statements made in court, a long-term investigation led by the Federal Bureau of Investigation, Drug Enforcement Administration and Homeland Security Investigations revealed that individuals, including a law enforcement officer, were receiving shipments of steroid ingredients from China and manufacturing and distributing wholesale quantities of steroids. The investigation also revealed that certain members of the conspiracy were distributing prescription pills, including oxycodone.
During the course of the investigation, law enforcement officers seized hundreds of vials of steroids, approximately 600 grams of raw testosterone powder, approximately 350 grams of powder cocaine, and four long guns.
In pleading guilty, BERTANZA admitted that he purchased anabolic steroids from another member of the conspiracy and distributed them to others.
BERTANZA is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on January 8, 2016, at which time he faces a maximum term of imprisonment of 10 years.
BERTANZA was arrested on April 29, 2015, and is released on a $100,000 bond.
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations, with the assistance of the U.S. Marshals Service, U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Robert M. Spector.
Second Former Arrow Trucking Executive Sentenced in Multi-Million Dollar Fraud SchemeRead the Press Release
A Waxahachi, Texas, resident and former chief financial officer (CFO) of Arrow Trucking Company was sentenced today to serve 35 months in prison for conspiracy to commit bank fraud and to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U. S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.
Jonathan Leland Moore, 38, pleaded guilty on Dec. 4, 2014, to an information charging him with one count of a dual-object conspiracy to defraud the United States and to commit bank fraud. Moore conspired with James Douglas Pielsticker, 47, a resident of Dallas, and former CEO and president of Arrow Trucking Company, to defraud the United States by failing to account for and pay federal withholding taxes on behalf of Arrow Trucking Company and by making payments to Pielsticker outside the payroll system.
Moore cooperated with the criminal investigation, including testifying on behalf of the government during Pielsticker’s sentencing hearing last week. On Oct. 9, Pielsticker was sentenced to serve seven and one-half years in prison and ordered to pay $21,026,682.03 in restitution for his role in the conspiracy and for attempting to evade his individual income taxes.
Chief U.S. District Court Judge Gregory K. Frizzell of the Northern District of Oklahoma also sentenced Moore to serve three years of supervised release following his prison term and ordered him to pay $21,026,682.03 in restitution to the Internal Revenue Service (IRS) and the Transportation Alliance Bank (TAB).
According to the plea agreement and other court records, in 2009, Moore, Pielsticker and others withheld Arrow Trucking Company employees’ federal income tax withholdings, Medicare and social security taxes, but did not report or pay over these taxes to the IRS, despite knowing that they had a duty to do so. The conspirators paid for Pielsticker’s personal expenses with money from Arrow Trucking Company and submitted fraudulent invoices to TAB to induce the bank to pay funds to Arrow Trucking Company that were not warranted. In total, the conspiracy caused a loss to the United States totaling more than $9.562 million.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Williams commended the special agents of the IRS-CI and FBI, who investigated this case, and Assistant U.S. Attorneys Jeffrey A. Gallant and Catherine Depew of the Northern District of Oklahoma and Special Assistant U.S. Attorney and Tax Division Trial Attorney Charles A. O’Reilly, who prosecuted the case on behalf of the United States.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Second Former Arrow Trucking Executive Sentenced in Multi-Million Dollar Fraud SchemeRead the Press Release
TULSA, Okla. – A Waxahachi, Texas, resident and former chief financial officer (CFO) of Arrow Trucking Company was sentenced today to serve 35 months in prison for conspiracy to commit bank fraud and to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.
Jonathan Leland Moore, 38, pleaded guilty on Dec. 4, 2014, to an information charging him with one-count of a dual-object conspiracy to defraud the United States and to commit bank fraud. Moore conspired with James Douglas Pielsticker, 47, a resident of Dallas, and former CEO and president of Arrow Trucking Company, to defraud the United States by failing to account for and pay federal withholding taxes on behalf of Arrow Trucking Company and by making payments to Pielsticker outside the payroll system.
Moore cooperated with the criminal investigation, including testifying on behalf of the government during Pielsticker’s sentencing hearing last week. On Oct. 9, Pielsticker was sentenced to serve seven and one-half years in prison and ordered to pay $21,026,682.03 in restitution for his role in the conspiracy and for attempting to evade his individual income taxes.
Chief U.S. District Court Judge Gregory K. Frizzell of the Northern District of Oklahoma also sentenced Moore to serve three years of supervised release following his prison term and ordered him to pay $21,026,682.03 in restitution to the Internal Revenue Service (IRS) and the Transportation Alliance Bank (TAB).
According to the plea agreement and other court records, in 2009, Moore, Pielsticker and others withheld Arrow Trucking Company employees’ federal income tax withholdings, Medicare and social security taxes, but did not report or pay over these taxes to the IRS, despite knowing that they had a duty to do so. The conspirators paid for Pielsticker’s personal expenses with money from Arrow Trucking Company and submitted fraudulent invoices to TAB to induce the bank to pay funds to Arrow Trucking Company that were not warranted. In total, the conspiracy caused a loss to the United States totaling more than $9.562 million.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Williams commended the special agents of the IRS-Criminal Investigation and FBI, who investigated this case, and Assistant U.S. Attorneys Jeffrey A. Gallant and Catherine Depew of the Northern District of Oklahoma and Special Assistant U.S. Attorney and Tax Division Trial Attorney Charles A. O’Reilly, who prosecuted the case on behalf of the United States.
# # #
Seal Beach Man Pleads Guilty in Foreclosure Rescue SchemeRead the Press Release
Riverside, California – A Seal Beach man has pleaded guilty to federal fraud charges related to a mortgage rescue scheme in which he made false promises to the distressed homeowner, filed fraudulent bankruptcies to delay foreclosure and rented the property to third parties as the foreclosure proceedings were delayed.
Terry Meisinger, 74, appeared before United States District Judge Virginia A. Phillips on Tuesday morning and pleaded guilty to two counts of wire fraud.
Meisinger admitted he defrauded a distressed homeowner by inducing him to sign a quitclaim in exchange for promises that included negotiating a short-sale agreement with his lender that would free the homeowner from his mortgage on a property in North Las Vegas, Nevada. But, instead, Meisinger caused a deed of trust to be recorded on the property, which was followed by a fraudulent bankruptcy on behalf of the person who supposedly now held an interest in the home. Meanwhile, Meisinger rented out the home to another person while foreclosure proceedings were stayed as a result of the fraudulent bankruptcy.
Meisinger “repeated the process of causing the recording of deeds of trusts in the names of various beneficiaries whose identities he controlled and causing the filing of bankruptcies on behalf of those lenders to delay the foreclosure proceedings, while collecting rents” on property in North Las Vegas, according to the plea agreement filed in this case.
Meisinger admitted in court this week that he repeated this scheme with approximately 150 properties between 1999 and 2014 and gained more than $1.5 million from this scheme. Altogether, Meisinger admitted there were at least 50 victims of his scheme, which included homeowners, lenders and renters.
Meisinger also admitted that his illegal conduct violated Judge Phillips’ court order in a prior civil matter barring Meisinger from participating in the home finance or real estate industries for 10 years (see: http://go.usa.gov/3Sr23). Meisinger was also barred from filing bankruptcy petitions. In that civil action, Judge Phillips had imposed a $5 million civil fine on Meisinger.
As a result of the guilty pleas, Meisinger faces a statutory maximum sentence of 40 years in federal prison, as well as a $3 million fine. Judge Phillips is scheduled to sentence him on December 21.
The criminal case against Meisinger is the result of an investigation by the United States Department of Housing and Urban Development, Office of the Inspector General (HUD-OIG).
Robinson Resident Indicted on Methamphetamine Related ChargesRead the Press Release
Michael L. Goff, 36, of Robinson, Illinois, was indicted on October 6, 2015, on methamphetamine related charges in a three count Indictment returned by a Federal Grand Jury sitting in Benton, Illinois, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Count 1 charges that from May 2015 to September 1, 2015, in Crawford and Richland Counties, within the Southern District of Illinois, the state of Indiana, and elsewhere, Goff conspired to knowingly and intentionally distribute methamphetamine. The total amount of mixture and substance containing methamphetamine involved in the conspiracy was fifty (50) grams or more of methamphetamine (Ice), or five hundred (500) grams or more of a mixture and substance containing methamphetamine. Count 2 charges that from August 30, 2015 to September 1, 2015, in Crawford County, Goff knowingly and intentionally possessed with the intent to distribute five (5) grams or more of methamphetamine (Ice), or fifty (50) grams or more of a mixture and substance methamphetamine. Count 3 charges that on August 31, 2015, in Richland County, Goff knowingly and intentionally possessed with the intent to distribute a mixture or substance containing methamphetamine.
With respect to Count 1, Goff faces a minimum of 10 years up to life imprisonment, up to a $10,000,000 fine, and supervised release of not less than 5 years. With respect to Count 2, Goff faces 5-40 years’ imprisonment, up to a $5,000,000 fine, and supervised release of not less than 4 years. With respect to Count 3, Goff faces up to 20 years imprisonment, up to $1,000,000 fine, and supervised release of not less than 3 years.
An Indictment is a formal charge against a defendant. 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 investigation in this case was conducted by the Robinson, Illinois, Police Department, the Crawford County Sheriff’s Office, and the Richland County Sheriff’s Office. The Crawford County State’s Attorney Office also assisted in the investigation of this case.
The case is being handled by Assistant United States Attorney George Norwood.
Registered Sex Offender Heads to Prison for Possession of Child PornographyRead the Press Release
Registered Sex Offender Heads to Prison for Possession of Child Pornography
HOUSTON – Carlos Entenza, 49, of Katy, has been ordered to prison for 10 years following his conviction of possession of child pornography, announced United States Attorney Kenneth Magidson. Entenza pleaded guilty Jan. 6, 2015.
Today, U.S. District Judge Gray Miller, took into consideration Entenza’s prior child pornography conviction from Arkansas in 2002 and handed him a sentence of 120 months in federal prison. Entenza will serve 20 years of supervised release following completion of his prison term, during which time he will have to comply to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to continue to register as a sex offender.
Indicted June 9, 2014, Entenza later appeared for a detention hearing before a U.S. Magistrate who found Entenza to be a danger to the community and ordered he be detained.
The investigation revealed Entenza was making child pornography available to others through the use of peer-to-peer software over the Internet. An FBI agent downloaded a video of child pornography from the files Entenza was making available online.
A search warrant was executed Oct. 24, 2013. At that time, agents seized computer media including external hard drives which led to the discovery of more than 250 digital images and approximately 380 videos containing child pornography.
Entenza will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
These charges were the result of an investigation conducted by the FBI Innocent Images Task Force.
This case, prosecuted by Assistant United States Attorney Sherri L. Zack, 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.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Randolph County, WV man convicted for role in multi-state painkiller, marijuana trafficking networkRead the Press Release
WHEELING, WEST VIRGINIA – Chad Allen Workman, 37, of Beverly, West Virginia, was convicted in federal court today for his role in an oxycodone and marijuana distribution operation, United States Attorney William J. Ihlenfeld, II, announced.
Workman participated in an extensive and long-term multi-state drug trafficking operation. Workman, along with other individuals, conspired to transport large quantities of oxycodone and marijuana across state lines into West Virginia. The oxycodone was commonly transported from sources in Detroit, Florida and New Jersey. The marijuana was commonly obtained from sources in Pennsylvania and California. Workman further utilized the unlawful proceeds of the drug trafficking operation to purchase vehicles, real estate, and personal vacations.
Workman pled guilty today to one count of “Money Laundering.” As a result of the plea agreement executed today, he will be sentenced to nine years in prison and ordered to pay a fine of up to $500,000. Workman will also be required to pay a money judgment of at least $224,400 and forfeit his interest in a Harley-Davidson Motorcycle.
Assistant U.S. Attorney Stephen Warner prosecuted the case on behalf of the government. The Mountain Region Drug and Violent Crime Task Force led the inquiry. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, the Internal Revenue Service - Criminal Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Upshur County Sheriff’s Office also investigated.
U.S. Magistrate Judge James E. Seibert presided.
Providence Resident Pleads Guilty to Robbing Four Banks in Four DaysRead the Press Release
PROVIDENCE, R.I. – Vaughn Watrous, 38, formerly of Providence, pleaded guilty in federal court in Providence today to robbing four banks, two in Providence and two in Cranston, on four consecutive days in February 2013, announced United States Attorney Peter F. Neronha, Cranston Police Chief Colonel Michael J. Winquist, Providence Police Chief Colonel Hugh T. Clements, Jr., and Harold H. Shaw, Special Agent in Charge of the Boston Field Office of the FBI.
Appearing before U.S. District Court Judge John J. McConnell, Jr., Watrous pleaded guilty to four counts of bank robbery. He is scheduled to be sentenced on January 19, 2016.
At the time of his guilty plea, Watrous admitted to the court that on consecutive dates beginning on February 11, 2013, he robbed Sovereign Bank branch offices on North Main Street in Providence, Atwells Avenue in Providence, and on Reservoir Avenue in Cranston. He also admitted that on February 14, 2013, he robbed a Citizens Bank branch office located inside a supermarket on Garfield Avenue in Cranston.
In each instance, Watrous passed a note to a bank teller announcing the robbery, demanding large bills and instructing tellers not to trigger the bank alarm.
According to information presented to the court, Cranston police officers who responded to the robbery of the Citizens Bank branch office developed information that Watrous may have fled into a nearby store. Officers observed the defendant leaving that store and immediately arrested him. As they did, a large pile of cash fell to the ground. Additionally, officers recovered $690 hidden inside Watrous’ left shoe, $80 from inside his right front pocket and $240 from inside his left front pocket.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams, with the assistance of Assistant U.S. Attorney Lee H. Vilker.
The robberies were investigated by officers and detectives from the Cranston and Providence Police Departments and agents from the FBI.
###
Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Producer of Child Pornography Sentenced to 15 Years in Federal PrisonRead the Press Release
ASHEVILLE, N.C. – Patrick John Stone, 29, of Gloucester, Virginia was sentenced today by U.S. District Judge Martin Reidinger to serve 180 months in federal prison on child pornography production charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Stone was also placed on a lifetime of supervised release and was ordered to register as a sex offender.
Joining U.S. Attorney Rose in making today’s announcement is B.W. Collier, Acting Director of the North Carolina State Bureau of Investigation.
According to filed court documents and today’s sentencing hearing, Stone maintained an Internet account which he used to communicate in chatrooms and via video conferencing. Stone admitted in filed court documents that while he resided in Cleveland County, N.C., he met the minor female via a chat website. Stone also admitted to telling the minor victim he was 17 years old. According to court records, between September 9, 2012, and November 1, 2012, Stone caused the minor to engage in sexually explicit conduct which Stone recorded without the minor’s knowledge. A forensic examination of Stone’s seized computers revealed that he possessed numerous images of child erotica and child pornography videos.
Stone pleaded guilty in February 2015 to one count of production of child pornography and is currently in federal custody. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the SBI. The case was prosecuted by the U.S. Attorney’s Office in Asheville.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Pennsylvania Man Found Guilty by Jury TrialRead the Press Release
U.S. Attorney David Capp for the Northern District of Indiana announced that Vahan Kelerchian, 56, of Richboro, Pennsylvania, doing business as Armament Services International “ASI”, was found guilty of a multitude of charges relating to the acquisition of machineguns and restricted laser aiming sites, late Thursday evening after a two-week jury trial.
According to evidence presented at trial, Kelerchian conspired with Joseph Kumstar and Ronald Slusser, two now former Lake County Police Officers, to knowingly make false statements relating to the acquisition of firearms. Kumstar and Slusser, who have pleaded guilty, used their positions as sworn law enforcement officers in coordination with Kelerchian using his position as a Class 3 Federal Firearms Licensee to acquire approximately 71 fully automatic machineguns in the name of the Lake County Sheriff’s Department knowing that the Lake County Sheriff’s Department was not going to be the true owner of these weapons. Kelerchian, Kumstar and Slusser conspired to use law enforcement letter head to create letters which falsely represented that the machineguns were going to be used by the Lake County Sheriff’s Department to carry out its law enforcement responsibilities since machineguns manufactured after 1986 can only be acquired by law enforcement agencies and not individual officers. The machineguns were purchased for a cost of $1200 and $1600 and then when received by the Sheriff’s Department, transported offsite to be parted out. The barrels aka the “upper” were split with the officers and some were sent back to Kelerchian. The “uppers” sold between $3000 and $3600 due to post-1986 parts not being available to the public because only law enforcement agencies or the military can acquire these weapons.
Kelerchian also used his company to assist Kumstar and Slusser to acquire 74 restricted laser aiming sights again using law enforcement letterhead from the Lake County Sheriff’s Department and the Lowell Police Department. These laser sights were restricted by the Food and Drug Administration (FDA) because they were class 3b lasers. These lasers were designed, per a variance from FDA, to be used for law enforcement and military use only because they did not have the audible or manual safety locks as required for class 3b lasers. The laser aiming sights had a visible laser that could be seen in excess of 50 feet and an invisible laser that could be used for targeting with infrared goggles in excess of one mile. Kelerchian along with the officers used their positions to acquire these devices and sell them to the general public or keep the devices for themselves.
In addition to the charges above, Kelerchian was also found guilty of money laundering and false statements to the Bureau of Alcohol, Tobacco, Firearms and Explosives regarding false demonstration letters involving high powered belt-fed machine guns. Kelerchian was also charged with bribery but was found not guilty of that accusation.
This case is a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Department of Defense Criminal Investigative Services; Federal Bureau of Investigation; Food and Drug Administration, Office of Criminal Investigations; and the Internal Revenue Service, Criminal Investigation Division. This case was prosecuted by Assistant U.S. Attorneys Philip C. Benson and Thomas M. McGrath.
O’Fallon Woman Pleads Guilty to Healthcare Fraud ChargeRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today, that on October 14, 2015, Ann Marie Sheppard, 54, of O’Fallon, Illinois, pled guilty in federal court to charges that she engaged in a scheme to steal from a health care program and committed mail fraud. Sentencing has been set for February 10, 2016. Sheppard will face up to 10 years in prison, a fine of up to $250,000, and up to 3 years of supervised release.
During her plea hearing, Sheppard admitted that she had submitted false and fraudulent bills in relation to her alleged performance of personal assistant services in the Home Services Program, a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. Sheppard admitted to falsely billing the program between June 30, 2013 and April 30, 2015, when she purportedly rendered personal assistant services to a customer when, in fact, she had not because she was out of the country for eleven days and on an ocean cruise for four days, along with other times she was not with the customer. As a result, Sheppard improperly billed 2,883.4 hours of services and obtained $34,168.33 in payments for services not performed.
This prosecution is part of the fourth wave of the "Operation Home Alone" initiative announced on June 5, 2014, by United States Attorney Stephen R. Wigginton. The investigation was conducted by the U.S. Department of Health and Human Services - Office of Inspector General, the Illinois State Police - Medicaid Fraud Control Bureau, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney William E. Coonan.
If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services, Office of Inspector General, or you may call 1.800.447.8477.
Over 27,000 Students to Pledge Against Gun ViolenceRead the Press Release
Contact Person: Lance Crick (864) 282-2100
COLUMBIA, SC----United States Attorney Bill Nettles announced that on Wednesday, October 21, 2015, members of the United States Attorney’s Office and their local, state, and federal law enforcement partners will meet with students from across South Carolina, as part of South Carolina’s 14th annual Student Pledge Against Gun Violence.
With a focus on keeping their schools and communities safe, students in middle school and high school will sign a voluntary pledge promising that they will never take a gun to school, will never resolve a dispute with a gun, and will use their influence to prevent friends from using guns to resolve disputes. Elementary school children will make a simpler commitment, pledging that if they see a gun they will not touch it, they will assume that any gun they see might be loaded, and they will tell a teacher or a trusted adult.
The effort is part of South Carolina’s Project CeaseFire, which is South Carolina’s implementation of the Department of Justice’s Project Safe Neighborhoods program, which is aimed at reducing gun violence. The Student Pledge Against Gun Violence is a national program that recognizes the role that young people, through their own decisions, can play in reducing gun violence. This campaign against youth gun violence culminates each October in a “Day of National Concern about Young People and Gun Violence.” The program provides a means for beginning the conversation with young people about gun violence. Students from around the country will join together in pledging to do their part to end gun violence. Over the years, millions of students nationwide have signed the pledge.
Mr. Nettles said that, just as in years past, the response to the pledge campaign has been outstanding, with approximately 27, 832 students from 60 schools across the state agreeing to take part. "Our office is pleased to take this opportunity to reach out to South Carolina students with an effort to engage students, teachers, and administrators to facilitate a dialogue with students about gun violence and the importance of making good decisions," stated Mr. Nettles.
The U.S. Attorney's Office worked with schools, student resource officers, and law enforcement agencies throughout the state to make the pledges available, providing the pledges to participating schools as well as scheduling presentations for some 28 of the schools that requested speakers. Below is a list of South Carolina schools that are participating in this year's pledge. For information on any events scheduled for a particular school, please contact the school. For additional information concerning the pledge, visit the national Student Pledge website at www.pledge.org
Participating Schools:
Airport High School James Island High School
West Columbia, SC Charleston, SC
Arden Elementary School Joseph Keels Elementary School
Columbia, SC Columbia, SC
Augusta Circle Elementary School La France Elementary School
Greenville, SC Pendleton, SC
Allendale-Fairfax Middle School Lakeview Middle School
Fairfax, SC Greenville, SC
Allendale-Fairfax High School Lamar Elementary School
Fairfax, SC Darlington, SC
Baptist Hills Middle High School Lamar High School
Charleston, SC Darlington, SC
Barnwell 45 Elementary School Lincoln Middle-High School
Barnwell, SC McClellanville, SC
Bridge Creek Elementary School Luther Vaughn Elementary School
Elgin, SC Gaffney, SC
Brockington Elementary School Macedonia Middle School
Darlington, SC Moncks Corner, SC
Brookdale Elementary School Malcolm C. Hursey Elementary School
Orangeburg, SC North Charleston, SC
Carolina School for Inquiry Manning Elementary School
Columbia, SC Manning, SC
Carvers Bay Middle School Mary Bramlett Elementary School
Hemingway, SC Gaffney, SC
Central Elementary School Mayewood Middle School
Central, SC Sumter, SC
Clay Hill Elementary School Myrtle Beach High School
Ridgeville, SC Myrtle Beach, SC
Croswell Drive Elementary School Mitchell Math and Science Elementary School
Sumter, SC Charleston, SC
Dent Middle School Mullins High School
Columbia, SC Mullins, SC
Douglas Elementary School Northwest Elementary School
Trenton, SC Gaffney, SC
East Elementary School Northwest Middle School
Dillon, SC Travelers Rest, SC
Fairfax Elementary School Ocean Drive Elementary School
Fairfax, SC North Myrtle Beach, SC
Forestbrook Middle School Orange Grove Elementary Charter School
Myrtle Beach, SC Charleston,SC
Goucher Elementary School Orange Grove Middle Charter School
Gaffney, SC Charleston, SC
Greenville Tech Charter High School Orangeburg-Wilkinson High School
Greenville, SC Orangeburg, SC
Hampton Elementary School Petersburg Primary School
Hampton, SC Pageland, SC
Hand Middle School Pine Grove Elementary School
Columbia, SC Columbia, SC
Hemingway M.B. Lee Middle School Powdersville Middle School
Hemingway, SC Powdersville, SC
High Hills Elementary School Rollings Middle School
Shaw AFB, SC Summerville, SC
Holly Hill Elementary School South Elementary School
Holly Hill, SC Dillon, SC
Hopkins Middle School Spaulding Middle School
Columbia, SC Dillon, SC
Horrell Hill Elementary School Summerville Elementary School
Hopkins, SC Summerville, SC
J. K. Gourdin Elementary School Travelers Rest High School
Pineville, SC Travelers Rest, SC
#####
Operators of Medical Equipment Supply Company Convicted in $1.5 Million Medicare Fraud SchemeRead the Press Release
A federal jury in Los Angeles convicted the former owner and the former operator of a durable medical equipment supply company of health care fraud charges in connection with a $1.5 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Special Agent in Charge Chris Schrank of the U.S. Department of Health and Human Services-Office of the Inspector General’s (HHS-OIG) Los Angeles Region, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge David Jett of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.
Amalya Cherniavsky, 41, and her husband, Vladislav Tcherniavsky, 46, of Long Beach, California, were both convicted late yesterday of one count of conspiracy to commit health care fraud and five counts of health care fraud. Sentencing is scheduled for Dec. 14, 2015, before U.S. District Judge Terry J. Hatter Jr. of the Central District of California, who presided over the trial.
The evidence at trial demonstrated that Cherniavsky owned JC Medical Supply (JC Medical), a purported durable medical equipment (DME) supply company, and that she co-operated the company with her husband, Tcherniavsky. According to the trial evidence, the defendants paid illegal kickbacks to patient recruiters in exchange for patient referrals. The evidence further showed that the defendants paid kickbacks to physicians for fraudulent prescriptions – primarily for expensive, medically unnecessary power wheelchairs – which the defendants then used to support fraudulent bills to Medicare.
According to the evidence presented at trial, between 2006 and 2013, the defendants submitted $1,520,727 in fraudulent claims to Medicare and received $783,756 in reimbursement for those claims.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. The case was investigated by the FBI, HHS-OIG’s Los Angeles Regional Office and the California Department of Justice. The case is being prosecuted by Trial Attorneys Blanca Quintero and Kevin R. Gingras of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Omaha Man Sentenced to more than 11 years in Prison for Possessing Methamphetamine and a FirearmRead the Press Release
United States Attorney Deborah R. Gilg announced that Raymond A. Vanvalkenburg, 31, of Omaha, Nebraska, was sentenced on October 16, 2015, to 137 months in prison by Senior United States District Judge Joseph Bataillon. Vanvalkenburg had previously pled guilty after Omaha police officers arrested him on November 10, 2014, on an assault warrant. At the time of his arrest, Vanvalkenburg was found in possession of a baggie containing more than 8 grams of methamphetamine and a handgun.
Vanvalkenburg’s sentence was increased by 5 years because he possessed a firearm in connection with the methamphetamine. After serving his sentence Vanvalkenburg will be required to serve a Term of Supervised Release of 4 years.
This case was the result of an investigation by the Omaha Police Department.
Oklahoma City Man Sentenced to 30 Years for Child Sex Trafficking of 14-Year-OldRead the Press Release
Oklahoma City, Oklahoma –WILLIAM VONTRAIL JOHNSON, 28, from Oklahoma City, was sentenced yesterday by United States District Judge Stephen Friot to serve 360 months in federal prison for child sex trafficking of a 14-year-old girl, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to court records, in June 2014, an undercover agent responded to an internet posting advertising escort services with photographs of the 14-year-old victim. After communicating to schedule a "date," the undercover agent met the girl at a local hotel in Oklahoma City a little after midnight. After an initial greeting, the girl asked for the "donation" and pulled out a condom. The girl was then questioned by law enforcement. Johnson was discovered in the hotel walkway and, following questioning, found to have a key to the hotel room where the undercover agent had met the girl for the commercial sex act. Johnson was also found in possession of photographs and videos of the girl, and his internet history opened to his posting of the advertisement for the girl.
Johnson was arrested and initially charged by criminal complaint on November 4, 2014. He was indicted by a federal grand jury on December 3, 2014, and on March 9, 2015, Johnson entered a guilty plea to child sex trafficking. At his plea hearing, Johnson admitted that the victim was 14 years old when he pimped her out, and that he knew it. Johnson admitted that he had posted internet advertisements for the child to perform sex in exchange for money. He admitted that he received the money that was paid for those encounters. Johnson admitted that he used the internet and text messages to set up and arrange commercial sex transactions between the child and men. Johnson also admitted that he took the girl from Oklahoma City to Houston, Texas, to perform commercial sex acts.
Yesterday, Judge Friot sentenced Johnson to serve 360 months in prison. After his release from prison, Johnson will be required to serve 15 years of supervised release and will be required to register as a sex offender.
This sentence is the result of an investigation conducted by the U.S. Department of Homeland Security Investigations and the Oklahoma Bureau of Narcotics and Dangerous Drugs. The case was prosecuted by Assistant U.S. Attorneys McKenzie Anderson, Brandon Hale, and Julia Barry.
Reference is made to court filings for further information.
Northampton Man Sentenced to Prison for Second Child Pornography OffenseRead the Press Release
BOSTON – Robert Sokolowski, 42, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 150 months in prison and 10 years of supervised release for possessing child pornography.
On July 3, 2013, Sokolowski uploaded a child pornography file to a Facebook account in the fictitious name of “Amy Addams.” During a search executed by local law enforcement officers at Sokolowski’s apartment, a laptop was seized that revealed 14 fictitious Facebook accounts, including the “Amy Addams” account. Also found on the laptop were 400 images of child pornography, including a copy of the file that had been uploaded to the “Amy Addams” account, as well as four video files of child pornography, one of which depicted the rape of a female toddler.
In 2005, Sokolowski pleaded guilty to one count of possessing child pornography in U.S. District Court and was sentenced to 46 months in prison. Sokolowski committed the 2013 offenses four months after concluding his term of three years supervised release on the prior offense.
United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Northampton Police Chief Jody Kasper, made the announcement today. The case by prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Muskogee Man Pleads Guilty to Failure to Register as Sex OffenderRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that STEVE ARBY CHANDLER, II, age 45, of Muskogee, Oklahoma, pled guilty to FAILURE TO REGISTER AS SEX OFFENDER, in violation of Title 18, United States Code, Sections 2250(a)(1), 2250(a)(2)(B) and 2250(a)(3).
The charge arose from an investigation by the Muskogee Police Department and the United States Marshal Service.
The Indictment alleges that from on or about April 3, 2014 until on or about July 3, 2014, in the Eastern District of Oklahoma, and elsewhere, STEVE ARBY CHANDLER, II, defendant herein, an individual required to register as a sex offender under the Sex Offender Registration and Notification Act, after having received a felony conviction from the State of Michigan on or about January 31, 1990, for the felony offense of Criminal Sexual Conduct 2nd Degree, traveled in interstate commerce and knowingly failed to register and update his registration as required by the Sex Offender Registration and Notification Act.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion.
The statutory range of punishment is not more than 10 years imprisonment, up to a $250,000.00 fine or both.
Assistant United States Attorney Dean Burris represented the United States.
Multi-Agency Investigation of Large Drug Trafficking Organization Results in the Indictment of 24 DefendantsRead the Press Release
PORTLAND, Oregon – Today, 12 defendants appeared in federal court after being charged in a federal indictment alleging a conspiracy to manufacture, distribute and possess with the intent to distribute methamphetamine, a conspiracy to commit money laundering and a conspiracy to violate the Animal Welfare Act (rooster fighting). The indictment, charging a total of 24 defendants, was unsealed yesterday after the early morning execution of federal and state search warrants in Oregon and Washington.
The underlying case involves a vast drug trafficking conspiracy in which drug cartels, criminal organizations and gangs were sourcing a large drug trafficking organization that was operating within Washington County, Oregon with hundreds of pounds of methamphetamine, which in turn was being sold to other drug distributors within the area.
See the indictment and the government memorandum attached.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) joint investigation involving the Westside Interagency Narcotics team, Department of Homeland Security Investigations, Hillsboro Police Department – Street Crimes Unit, Beaverton Police Department, Washington County Sheriff’s Office, Tigard Police Department, Portland Police Bureau – Drugs and Vice Division, Clackamas County Interagency Task Force, FBI, DEA, ATF, U.S. Marshals, Multnomah County Sheriff’s Office – Special Investigations Unit, Yamhill County Interagency Narcotics team, Woodburn Police Department, Salem Police Department, and the Department of Agriculture. The Portland Police Bureau’s Special Emergency Reaction Team and the Washington County Tactical Negotiations Team helped with the execution of search warrants. The Humane Society has assisted with the handling of roosters found during the execution of the search warrants. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking organizations and those primarily responsible for the nation’s illegal drug supply. The case is being prosecuted by Assistant U. S. Attorneys Scott Kerin, Patrick Ehlers and AnneMarie Sgarlata.
Moss Bluff man sentenced to 98 months in prison for warehousing and selling marijuanaRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Moss Bluff man was sentenced Thursday to 98 months in prison for operating a marijuana sales and transport conspiracy that stretched from Texas to Louisiana.
Daniel Cantu-Lopez, 43, of Moss Bluff, La., was sentenced by U.S. District Judge Richard T. Haik on one count of conspiracy to possess with intent to distribute marijuana. He was also sentenced to five years of supervised release. According to evidence presented at the March 11, 2015 guilty plea, Cantu-Lopez was warehousing large quantities of marijuana in Houston and distributing it out of his trailer in Moss Bluff. He directed the transport and sales of marijuana from June 2013 to September of 2013 from locations in Texas and Louisiana. During the course of the investigation, 4.9 kilograms of marijuana were seized from Juan Antonio Garcia on June 25, 2013 during a traffic stop in Vinton, La.; 453 grams of marijuana were seized on July 1, 2013 from Bertoldo Tolo Labra while being delivered to Moss Bluff; 380 kilograms of marijuana were seized on July 13, 2013 in George West, Texas, from Jamie Garza who was driving a truck and horse trailer; 4.5 kilograms of marijuana were purchased by an undercover agent on July 17, 2013 from Cantu-Lopez’s associate Lisa Diane Long in Moss Bluff; and 537 kilograms of marijuana were seized in Houston on September 13, 2013 from a pickup truck driven by Garcia.
Long, 51, of Lake Charles, was sentenced on November 11, 2014 to time served and one year of supervised release for one count of possession with intent to distribute marijuana. On February 5, 2015, Garcia, 59, of Nueva Laredo, Mexico, was sentenced to 44 months in prison and three years of supervised release, and Labra 32, of Morelos, Mexico, was sentenced to time served and two years of supervised release for one count of possession with intent to distribute marijuana. Garza, 47, of Edinburg, Texas, was sentenced on August 11, 2015 to 83 months in prison and four years of supervised release for one count of conspiracy to possess with intent to distribute marijuana.
The defendants were arrested as part of Organized Crime Drug Enforcement Task Force (OCDETF) Operation “Cajun Gallo.” The DEA, the George West Texas Police Department, and the Houston Police Department participated in this OCDETF investigation. The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Assistant U.S. Attorneys Howard C. Parker and Robert F. Moore prosecuted the case.
Monroe County Correctional Center coordinator indicted on fraud and embezzlement chargesRead the Press Release
Indianapolis - United States Attorney Josh Minkler today announced fraud and embezzlement charges against a woman who served as the administrative coordinator for the Monroe County Correctional Center. Karen S. Bridges, 45, Mitchell, Indiana, was arrested this morning for her role in allegedly stealing cash from the Monroe County Cash Bond Fund.
“The citizens of Monroe County deserve much better from their public servants,” said Minkler. “Ms. Bridges used public funds as her personal checking account and now will be held accountable.”
From 1996 until June 2015, Bridges served as an administrative coordinator for the Monroe County Correctional Center and oversaw the cash bond account which is used for the receipt of jail bonds for Monroe County. The cash bond account is used as a pass through account for the receipt of inmate bond funds which are later disbursed to the Monroe County Clerk of the Courts.
When an individual appears at the Monroe County Jail to pay a bond for an inmate’s release, they pay with cash, a money order or a pre-established GPS account. Envelopes with the bond payments were placed in a locked safe, which Bridges had access to.
As part of the scheme to hide her embezzlement, Bridges allegedly submitted false invoices to the county purporting to be from Advanced Correctional Healthcare (ACH), including invoices for work which had not been completed. ACH provided health care to jail inmates. When ACH discovered the overpayments from Monroe County, it sent refunds to Bridges’ attention at the Monroe County Correctional Facility. The refunds from ACH were deposited into the Cash Fund Bond account to cover the shortages that resulted from her embezzlement.
On several occasions, Bridges reported falsely to the Indiana State Board of Accounts that shortages in the cash bond fund were “in transit” meaning, the checks for bond payments had not yet been processed by the account holder’s financial institution. The result of Bridges’ alleged embezzlement is approximately $264,000.
This case was jointly investigated by the Federal Bureau of Investigation, Indiana State Police Organized Crime and Corruption Unit and the Indiana State Board of Accounts.
According to Senior Litigation Counsel Steven D. DeBrota and Assistant United States Attorney Jonathan A. Bont who are prosecuting this case for the government, Bridges could face up to 20 years in prison, if convicted of the most serious offense.
Marion Man Pleads Guilty to Possessing a Firearm as a FelonRead the Press Release
A felon who was found in possession of a .357 magnum revolver pled guilty yesterday in federal court in Cedar Rapids.
Fabian Taylor, age 28, from Marion, Iowa, was convicted of being a felon in possession of a firearm. In a plea agreement, Taylor admitted that on July 20, 2014, he knowingly possessed a .357 magnum revolver in Cedar Rapids. At a detention hearing, a federal agent with the FBI Safe Streets Task Force testified about this matter indicating that on July 20, 2014, authorities responded to multiple 911 calls reporting “shots fired.” They were informed that witnesses heard three or four shots coming from a rear passenger door of a white Hummer, which had fled the area. Officers located the automobile near the scene of the shooting and gave chase. The Hummer drove down an alley before ultimately pulling over. Taylor was seated in the right rear passenger seat. One of the other occupants of the automobile later testified that Taylor was the person who shot out of the window at a person with whom he was having a dispute. During the automobile chase, Taylor threw the .357 magnum out of the window as they drove down the alley, which officers later recovered. Taylor was a felon at the time he possessed the .357 magnum, having been convicted in 2006 of the offense of Burglary in a Minnesota state court.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Taylor remains in custody of the United States Marshal pending sentencing. Taylor faces a possible maximum sentence of ten years’ imprisonment, a $250,000 fine, $100 in special assessments, and three years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney C.J. Williams and was investigated by the Cedar Rapids Police Department and the FBI Safe Streets Task Force. Court file information: https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-0057-LRR.
Follow us on Twitter @USAO_NDIA.
Man who Killed Off-Duty MPD Officer Charged with Federal Firearm ViolationRead the Press Release
Memphis, TN – The man who fatally shot off-duty Memphis Police Department (MPD) officer Terence Olridge last Sunday has been charged federally with felony possession of a firearm. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the charge today.
On Sunday, October 11, 2015, 36-year-old Lorenzo Clark unlawfully possessed a Glock 9mm pistol. According to the federal complaint, MPD officers responded to a shooting call at Clark’s Cordova residence. Officers later recovered a Glock 9mm from Clark.
Clark gave a post-Miranda statement admitting to possession of the Glock 9mm prior to and during the shooting with Olridge, a 31-year-old MPD officer.
If convicted of felony possession of a firearm, Clark faces up to 10 years in federal prison.
The case is being investigated by the MPD and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Man Sentenced to 12 Months and One Day in Prison for Sexual Contact in National ForestRead the Press Release
ASHEVILLE, N.C. – Ronald Shannon Sosebee, 38, of Brevard, N.C. was sentenced on Thursday, October 15, 2015, by U.S. District Judge Martin Reidinger to serve 12 months and one day in federal prison for sexually touching and propositioning another person without that person’s permission, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Sosebee was also ordered to serve a lifetime of supervised release and to register as a sex offender.
Joining U.S. Attorney Rose in making today’s announcement is Lee Boyd, United States Forest Service Patrol Captain.
According to filed court documents and the sentencing hearing, on or about June 24, 2014, Sosebee approached the male victim near Sleepy Gap Overlook, located on the Blue Ridge Parkway, while the male hiker was resting after hiking on a trail. Court records show that Sosebee asked the male hiker if they could hike down the trail together, to which the victim agreed, and the two proceeded to walk, crossing into the Pisgah National Forest. According to court records, after a short distance, Sosebee made an unsolicited sexual remark and touched the victim sexually without permission. The victim resisted Sosebee’s sexual contact, ran toward his campsite and reported the incident to law enforcement. Sosebee was arrested shortly thereafter.
Sosebee pleaded guilty to engaging in sexual contact with another person without that other person’s permission and is currently in federal custody. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the United States Forest Service and the National Park Service. The case was prosecuted by the U.S. Attorney’s Office in Asheville.
Luray Man Sentenced for Tampering with Evidence in Drug Overdose CaseRead the Press Release
ALEXANDRIA, Va. – Jason Gregory Colley, 36, of Luray, was sentenced today to 96 months in prison for tampering with evidence for moving the body of a drug overdose victim. Colley was also ordered to pay $17,175.70 in restitution to the family of Jason Laytham, who died of a drug overdose, to cover funeral expenses.
Colley pleaded guilty on July 22, 2015. According to court documents, on or about Sept. 12, 2014, Colley sold cocaine to Laytham, formerly of Leesburg, and another individual at an extended stay hotel in Ashburn. After using an additional quantity of drugs, Laytham and the other individual became unconscious. Colley dragged Laytham’s body out of the hotel suite (which Colley had rented using his own name) into a common area of the hotel before calling for paramedics. When law enforcement officers arrived the other individual was unconscious in Colley’s hotel suite. While the other individual survived, Laytham died from the adverse effects of cocaine and other substances.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael L. Chapman, Loudon County Sheriff; and Karl C. Colder, Special Agent in Charge of the DEA’s Washington Field Division, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorney Tobias D. Tobler and former Assistant U.S. Attorney Michael P. Ben’Ary prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-203.
###
Local Man Arrested for Aiming Laser at HPD HelicopterRead the Press Release
HOUSTON – A 26-year-old Pasadena man has been charged with aiming a laser pointer at an aircraft, announced U.S. Attorney Kenneth Magidson. Julio Cesar Valdez-Salazar was indicted Oct. 7, 2015, and taken into custody today.
He will make an appearance in federal court today at 2:00 p.m. before U.S. Magistrate Judge Stephen Smith, at which time the government is expected to request his detention pending further criminal proceedings.
He is charged with aiming a laser pointer at an aircraft in violation of Title 18 U.S.C. Section 39A. The indictment alleges that on or about June 23, 2015, Valdez-Salazar knowingly aimed the beam of a laser pointer at a Houston Police Department (HPD) helicopter 80Fox, an aircraft in the special aircraft jurisdiction of the United States, or at the flight path of such an aircraft.
If convicted of the felony offense, he faces up to five years in federal prison and a possible $250,000 fine.
The charges are the result of an investigation conducted by the FBI and police departments in Pasadena and Houston. Assistant U.S. Attorney Steven Schammel is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Local City Health Inspector Indicted on Bribery ChargesRead the Press Release
St. Louis, MO – KEVIN HUNTSPON was indicted for allegedly soliciting and receiving payments from a local grocery store owner in connection with health inspections conducted at the grocery store.
Huntspon, St. Louis City, was indicted by a federal grand jury on one felony count of accepting a bribe by an agent of an organization receiving federal funds. The indictment was returned Wednesday, but remained sealed until the arrest of the defendant earlier today.
If convicted, this charge carries a maximum penalty of 10 years in prison and/or a fine up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case is being investigated by the Federal Bureau of Investigation. Assistant United States Attorney Reginald Harris is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Local City Health Inspector Indicted on Bribery ChargesRead the Press Release
St. Louis, MO – KEVIN HUNTSPON was indicted for allegedly soliciting and receiving payments from a local grocery store owner in connection with health inspections conducted at the grocery store.
Huntspon, St. Louis City, was indicted by a federal grand jury on one felony count of accepting a bribe by an agent of an organization receiving federal funds. The indictment was returned Wednesday, but remained sealed until the arrest of the defendant earlier today.
If convicted, this charge carries a maximum penalty of 10 years in prison and/or a fine up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case is being investigated by the Federal Bureau of Investigation. Assistant United States Attorney Reginald Harris is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Las Vegas, N.M., Man Pleads Guilty to Falsely Impersonating a Federal OfficerRead the Press Release
ALBUQUERQUE – Leon Herrera, 37, of Las Vegas, N.M., pleaded guilty yesterday in federal court in Albuquerque, N.M., to falsely impersonating a federal officer.
Herrera entered his guilty plea to a felony information charging him with impersonating a Special Agent of the DEA on Dec. 15, 2014, in Colfax County, N.M. In his plea agreement, Herrera admitted that he committed the crime at the behest of a friend who was then employed as a deputy sheriff in Colfax County (friend).
According to Herrera’s plea agreement, on Dec. 15, 2014, Herrera received a call from his friend while the friend was conducting a traffic stop on motorists he believed to be drug traffickers. The friend reported to Herrera that he found approximately $8,000.00 cash in the motorists’ vehicle. The friend then asked Herrera to speak with one of the motorists and tell him that he was a DEA Special Agent and intended to seize the currency as proceeds of criminal activity. Herrera acquiesced in his friend’s request and had a conversation with one of the motorists during which he falsely identified himself as a representative of the DEA and would be seizing the money for law enforcement purposes. The plea agreement states that the friend told him that he intended to keep the currency for his personal use, and offered to give $1,000.00 to Herrera for assisting him.
In his plea agreement, Herrera acknowledges that he later learned that the motorists were undercover law enforcement officers and that the currency seized from their vehicle, $7,500.00, belonged to the FBI.
At sentencing, Herrera faces a statutory maximum penalty of three years in prison followed by up to one year of supervised release. A sentencing hearing has yet to be scheduled.
This case was investigated by the Santa Fe and Albuquerque offices of the FBI and the New Mexico State Police. Assistant U.S. Attorney Sean J. Sullivan is prosecuting the case.
Kenilworth Businessman Indicted for Failing to Report $3 Million in Personal Income from Downtown Real Estate DealRead the Press Release
CHICAGO — A Kenilworth businessman has been indicted on charges he evaded federal income taxes by concealing $3 million he earned in connection with a high-rise real estate deal in downtown Chicago, federal authorities announced today.
SALVATORE GALIOTO earned $3 million in personal income as part of the acquisition of nine floors in a high-rise building at 55 E. Washington St. in Chicago in 2007, according to the indictment. The seller, Pittsfield Development LLC, paid the money as a consulting fee for closing the deal. Instead of reporting the money on his personal income taxes, Galioto caused false partnership tax returns to be prepared and filed, misstating that the $3 million was earned in 2008 by his company, 55 E. Washington Development LLC, according to the indictment.
The indictment was returned Thursday afternoon in U.S. District Court in Chicago. It charges Galioto with one count of corrupt interference with the administration of Internal Revenue Service laws, and three counts of willfully making false and fraudulent statements to the IRS.
Galioto, 54, also known as “Sam Galioto” and “Sammy Galioto,” will be arraigned on a future date to be set by the Court.
According to the charges, Galioto entered into a consulting agreement with Pittsfield on or about March 28, 2007. The agreement called for Pittsfield to pay $3 million to Galioto when the sale was completed. On or about Dec. 28, 2007, Galioto’s company purchased floors 13-21 from Pittsfield for $22,652,876.82, the indictment states.
Galioto concealed receipt of Pittsfield’s payment by having it paid to his relative as a nominee. The relative is identified in the indictment only as “Individual C.” On or about Dec. 31, 2007, Pittsfield sent a portion of Galioto’s consulting fee to Individual C in the form of a check for $962,121.75. Shortly thereafter, Galioto caused Individual C to sign and endorse the check over to Galioto, who took possession of it, endorsed it, and deposited it for his own use, according to the indictment. Galioto failed to report that money in his individual federal income tax returns for the years 2007 and 2008, the indictment alleges.
Instead, the false partnership returns were filed, misstating that Galioto’s company had earned the $3 million in 2008, the indictment alleges.
The corrupt interference charge carries a maximum sentence of three years in federal prison and a $5,000 fine. Each count of making false and fraudulent statements to the IRS is punishable by up to three years in prison and a fine of $100,000.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigation in Chicago; and John A. Brown, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of investigation.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorney Patrick Otlewski.
Indictment