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29 October 2015
Memphian Sentenced to Federal Imprisonment for $2.8 Million Federal Benefit Fraud SchemeRead the Press Release
Memphis, TN – A Memphis man who masterminded a federal benefit fraud scheme that cost the government approximately $2.8 million has been sentenced to 37 months in federal prison. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentencing today.
From October 2011 to December 2013, Remark Chism, 35, defrauded two public assistance programs: Supplemental Nutrition Assistance Program (SNAP) benefits and Child Care Certificate Program.
Chism, along with co-conspirators, recruited multiple SNAP recipients willing to sell their allotted benefits for amounts less than face value. The benefits were redeemed through Maxi Foods, a grocery store owned by Chism, for full monetary value. More than $1.9 million in SNAP benefits were unlawfully redeemed for cash over the two-year period.
SNAP (formerly known as Food Stamps) is a program designed to help low- and middle-income families purchase food. A SNAP beneficiary is provided a designated amount of funding each month via a rechargeable Electronic Benefits Transfer (EBT) card. Cardholders are able to use the allotted funding to purchase eligible food items at authorized retailers. Maxi Foods possessed a SNAP EBT card system, enabling SNAP beneficiaries to pay for eligible food items with their EBT card.
Chism also masterminded a scheme to defraud the Certificate Program, which provides federal funding to assist underprivileged families with child care costs, from October 2011 to December 2013. Chism, along with co-conspirators, paid cash to parents who qualified for Certificate Program benefits in exchange for use of their child care certificates. After acquiring the information, Chism would falsely report the children’s attendance at his daycare center, K.A.R.E. 3 Enrichment Center, and receive reimbursement for care.
The loss to the Certificate Program through K.A.R.E. is estimated at more than $986,000 over the two-year period.
In June 2015, Chism pled guilty today to one count of conspiracy to commit SNAP benefit fraud, one count of conspiracy to commit child care benefit fraud, and one count of false statements.
On Wednesday, October 28th, Judge Samuel H. Mays sentenced Chism to 37 months in prison on each of the counts. The prison terms will be served concurrently. Chism was also ordered to pay more than $2.8 million dollars in restitution.
This investigation was conducted by the United States Department of Agriculture Office of the Inspector General; United States Secret Service; United States Marshals Service; Memphis Police Department Organized Crime Unit; and the Tennessee Department of Human Services.
Assistant U.S. Attorneys Larry Laurenzi and Debra Ireland prosecuted the case on the government’s behalf.
Maryland man convicted of heroin traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – LaQuan Johnson, 35, of Baltimore, Maryland, was convicted of heroin trafficking in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Johnson sold heroin in April 2014 in Berkeley County, West Virginia. He pled guilty to one count of “Distribution of Heroin.” As a result of his guilty plea, Johnson will be sentenced to 180 months in prison.
Johnson was charged in a 6-count superseding indictment in April 2015. The indictment alleged various heroin and cocaine trafficking offenses. One count of the indictment specifically indicated that Johnson sold heroin containing fentanyl, a powerful painkiller, in Berkeley County, West Virginia in June 2014 which led to the death and serious bodily injury of another individual.
Assistant U.S. Attorneys Paul Camilletti, Robert McWilliams, and Anna Krasinski prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.Chief U.S. District Judge Gina M. Groh presided.
Marion County, WV man convicted of cocaine traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Michael T. Figueroa, Jr., 28, of Fairmont, West Virginia, was convicted of cocaine trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Figueroa sold cocaine base in January 2015 in Marion County, West Virginia. He pled guilty today to one count of “Distribution of Cocaine Base.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Manhattan U.S. Attorney, DEA New York Special Agent in Charge, New York County District Attorney, and Rockland County District Attorney Launch Prescription Drug Abuse Prevention Public Service AnnouncementsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York; James J. Hunt, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration; Cyrus Vance, Jr., the New York County District Attorney; and Thomas Zugibe, the Rockland County District Attorney, announced today the release of two public service announcements addressing the dangers of prescription drug abuse and how parents can keep their children safe.
According to the Centers for Disease Control, 46 people die each day from an overdose of prescription painkillers in the United States. The rate of prescription painkiller overdoses has more than quadrupled since 1999 and is now the leading cause of injury death, causing more deaths than motor vehicle traffic accidents annually.
Teens and young adults, who mistakenly believe prescription drugs are safer than illicit drugs, are abusing pills at an alarming rate. One in four teens has misused or abused a prescription drug at least once in their lifetime, a 33 percent increase since 2008.
The increase in the use of prescription drugs has also led to an explosion of heroin abuse. The recent national heroin abuse rate is 19 times higher among those who reported prior use of prescription pain relievers than among those who did not report such use. And four out of every five people who try heroin for the first time admit to having abused prescription pain relievers first.
Here in New York State, young adults are seeking treatment for opioid and heroin addiction at historic rates. The number of people who sought treatment increased 136 percent from 2004 to 2013. In particular, upstate New York, with a 222 percent increase in admissions, and Long Island, with a 242 percent increase, have been hard-hit by this problem.
The PSAs released today provide tips on how parents can dispose of prescription drugs safely, since the home medicine cabinet is the number-one source of prescription pills for teens and young adults.
The PSAs can be found here: http://www.justice.gov/usao-sdny. Media requesting a high resolution version can contact the U.S. Attorney’s Office of Public Affairs.
Manhattan U.S. Attorney Announces Criminal and Civil Charges Against Pharmacist, Two Pharmacies, and Two Other Individuals for Multimillion-Dollar Oxycodone Distribution SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), Thomas E. Bishop, Acting Special Agent in Charge of the New York Office of Internal Revenue Service – Criminal Investigation (“IRS-CI”), and Scott J. Lampert, the Special Agent in Charge for the New York Regional Office of the Department of Health and Human Services - Office of Inspector General (“HHS-OIG”), announced the unsealing of an indictment today against three individuals and two pharmacies for a multimillion-dollar oxycodone distribution scheme that flooded New York City with illegal controlled substances through pharmacies operated in Brooklyn and Queens. Defendants LILIAN JAKACKI, a/k/a/ “Lilian Wieckowski” (“WIECKOWSKI”), MARCIN JAKACKI, a/k/a “Martin,” ROBERT CYBULSKI, EUROPEAN APOTHECARY, INC., d/b/a “Chopin Chemists,” and MW&W GLOBAL ENTERPRISES, INC., d/b/a “Chopin Chemists,” are charged with illegally distributing more than 500,000 pills of oxycodone over a five-year period with a street value between $10 million and $15 million. The defendants are also charged with money laundering and health care fraud.
The defendants were arrested yesterday and are expected to be presented before U.S. Magistrate Judge James C. Francis IV. These arrests are the product of coordinated civil and criminal investigations that also resulted in the simultaneous filing today of a civil lawsuit against WIECKOWSKI, EUROPEAN APOTHECARY, INC., and MW&W GLOBAL ENTERPRISES, INC., that seeks millions of dollars in civil penalties and damages for violations of the Controlled Substances Act (“CSA”) and the False Claims Act (“FCA”).
Manhattan U.S. Attorney Preet Bharara said: “The defendants and pharmacies charged today allegedly were part of one the largest opioid painkiller diversion schemes ever uncovered in New York. As alleged, they flooded the city with over half a million illegally diverted oxycodone pills based on obviously fake prescriptions or no prescription at all, helping fuel the growing crisis of prescription pill abuse. Whether it is the corrupt doctor writing unwarranted prescriptions; the greedy pharmacist selling pills based on fake or no prescriptions; or the street-level drug dealer peddling painkillers directly to the addicted, we must confront this escalating epidemic at every level. Our actions today show that we and our law enforcement partners are committed to doing just that.”
DEA Special Agent in Charge James Hunt said: “During the same time that nearly two million Americans either abused or were dependent on opioid painkillers, Chopin Pharmacy was making a killing off the profit of illicit oxycodone sales. This two-year investigation uncovered a massive pill mill operating under the guise of ‘mom and pop’ pharmacies in Brooklyn and Queens. Using resources from numerous law enforcement agencies, the three defendants arrested today all face drug distribution charges, two face additional money laundering charges, and Wieckowski faces further Medicare fraud charges.”
IRS Acting Special Agent in Charge Thomas Bishop said: “As the law enforcement arm of the Internal Revenue Service, IRS-Criminal Investigation is responsible for investigating criminal tax fraud and related financial crimes, including money laundering. IRS-Criminal Investigation remains committed to the investigation of those who illegally traffic in prescription drugs. Any profitable illegal drug organization depends on the laundering of illegal proceeds in order to remain successful and to operate undetected by law enforcement. We are proud of our proven track record of using financial investigations to dismantle such organizations. We also remain committed to protecting publicly funded programs, like Medicare, and we will use our investigative authority accordingly to combat healthcare fraud.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Abuse of prescription drugs kills more people than illegal drug use and wastes millions of taxpayers’ dollars. HHS-OIG, along with our law enforcement partners, will continue to investigate those accused of contributing to America's prescription drug fraud epidemic.”
According to the allegations in the Indictment and the civil Complaint[1]:
WIECKOWSKI is the owner of EUROPEAN APOTHECARY, INC., a pharmacy that conducts business in Queens, New York, as Chopin Chemists (“Chopin Queens”). WIECKOWSKI also owns MW&W GLOBAL ENTERPRISES, INC., a pharmacy that conducted business as Chopin Chemists in Brooklyn, New York, until it was sold by WIECKOWSKI in 2014 (“Chopin Brooklyn,” and collectively the “Chopin Pharmacies”). All three individual defendants, along with the Chopin Pharmacies, are charged with conspiracy to distribute narcotics. WIECKOWSKI and JAKACKI are also charged with laundering the proceeds of their illegal narcotics business. WIECKOWSKI is also charged with a conspiracy to misbrand prescription drugs and a separate offense of defrauding Medicare out of more than $750,000 by claiming reimbursements for medicine she never actually dispensed.
As measured by the sheer quantity of pills distributed, the defendants’ oxycodone ring is one of the largest illegal diversions of oxycodone pills ever uncovered in a New York State pharmacy.
In 2013, WIECKOWSKI’S Chopin Brooklyn was the single largest purchaser of oxycodone pills in its zip code for three straight years, from 2010 to 2012. In 2011 and 2012, for example, Chopin Brooklyn exceeded the second highest purchaser’s orders in that zip code by more than 240,000 pills each year. In 2013, the DEA conducted an audit of Chopin Brooklyn that revealed more than 400,000 pills were dispensed without prescriptions. WIECKOWSKI and the Chopin Pharmacies also illegally diverted more than 160,000 additional pills by accepting 1,300 fraudulent prescriptions at both locations, including prescriptions made out in the names of famous luxury brands such as “Coach” or “Chanel.”
JAKACKI, WIECKOWSKI’s husband, helped to arrange the illegal sales of oxycodone pills. In September and October 2015, JAKACKI coordinated the illegal sale of hundreds of oxycodone pills to a DEA undercover agent at the Chopin Queens location.
CYBULSKI was one of the largest purchasers of illegal oxycodone from WIECKOWKSI at Chopin Brooklyn. While WIECOWSKI owned it, CYBULSKI regularly visited Chopin Brooklyn with multiple prescriptions in others’ names, typically obtaining 500 30-milligram oxycodone pills each time. In total, CYBULSKI illegally obtained tens of thousands of oxycodone pills from Chopin Brooklyn.
WIECKOWSKI and JAKACKI also conspired with others to launder hundreds of thousands of dollars in cash proceeds derived from the illegal oxycodone scheme. Among other things, WIECKOWSKI and JAKACKI transferred money between various bank accounts in the form of structured financial transactions. Among other things, WIECKOWSKI and JAKACKI purchased a $2 million home in Greenwich, Connecticut, using the proceeds of their illegal oxycodone distribution scheme.
WIECKOWSKI and Chopin Brooklyn also conspired to defraud the federally funded Medicare program by submitting false requests for reimbursement for expensive medications that were never dispensed by the Chopin Pharmacies. From 2010 to 2014, Medicare reimbursed Chopin Brooklyn for more than $750,000 in claims for prescription medications that were not purchased or dispensed by WIECKOWSKI or Chopin Brooklyn. WIECKOWSKI used a portion of the money from the federal Medicare program to purchase additional oxycodone pills for the illegal diversion scheme.
WIECKOWSKI is also charged with purchasing prescription medications from the black market at a deep discount from the prices legitimate suppliers typically charge, and then re-selling these drugs at Chopin Brooklyn.
WIECKOWSKI, 49, of Greenwich, Connecticut, is charged with one count of conspiracy to distribute and possess with the intent to distribute oxycodone illegally, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit health care fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; two counts of money laundering, each which carry a maximum sentence of 20 years in prison; and one count of conspiracy to misbrand prescription medication, which carries a maximum sentence of 5 years in prison.
JAKACKI, 35, of Greenwich, Connecticut, is charged with one count of conspiracy to distribute and possess with the intent to distribute oxycodone illegally, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 in prison; and one count of money laundering, which carries a maximum sentence of 20 years in prison.
CYBULSKI, 30, Staten Island, New York, is charged with one count of conspiracy to distribute and possess with the intent to distribute oxycodone illegally, which carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. The criminal case has been assigned to U.S. District Judge Jed S. Rakoff.
Mr. Bharara praised the outstanding investigative work of the DEA’s New York Division Diversion Group D62, the DEA Tactical Diversion Squad, the U.S. Internal Revenue Service, and the U.S. Department of Health and Human Services. The DEA’s Tactical Diversion Group includes agents and officers of the DEA, the New York City Police Department, the New York State Police, Town of Orangetown Police Department, and Westchester County Police Department.
The criminal case is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Sidhardha Kamaraju and Louis A. Pellegrino are in charge of the prosecution.
The civil case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorney Louis A. Pellegrino is in charge of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the texts of the Indictment and Complaint and the descriptions of each set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Man Pleads Guilty to Selling Home-Slaughtered PoultryRead the Press Release
PITTSBURGH - A Pittsburgh resident pleaded guilty in federal court to a charge of transporting poultry without inspection, United States Attorney David J. Hickton announced today.
Xia Vue, 84, of Pittsburgh, PA, pleaded guilty to one count before Senior United States District Judge Maurice B. Cohill.
In connection with the guilty plea, the court was advised that Vue had been slaughtering poultry at a dilapidated residential home and was selling the poultry in commerce to retail markets and individual customers. The poultry products sold by the defendant had not been inspected by the United States Department of Agriculture, as required by law.
Judge Cohill scheduled sentencing for Feb. 18, 2016. The law provides for a total sentence of one year in prison, a fine of $1000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant on bond.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The United States Department of Agriculture, Office of the Inspector General conducted the investigation that led to the prosecution of Xia Vue.
Luzerne County Man Sentenced to 37 Months in Prison for Bath Salts ConspiracyRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 30-year-old Larksville man was sentenced today to 37 months in prison by U.S. District Court Judge Malachy E. Mannion in Scranton, for conspiring with others to distribute and possess with intent to distribute alpha-pvp, commonly known as “bath salts.”
According to United States Attorney Peter Smith, the defendant, John Pearce, previously admitted to participating in the conspiracy which distributed alpha-pvp to customers during December 2011 through August 2013.
Pearce was indicted by a federal grand jury in August 2014, as a result of an investigation by Homeland Security Investigations (HSI), the Drug Enforcement Administration, United States Postal Inspectors, the Pennsylvania State Police, and West Pittston Police. All eleven defendants charged in the case have entered guilty pleas, including the principal distributors from West Pittston, Pennsylvania, and their suppliers from Texas.
Judge Mannion also ordered that Pearce serve three years on supervised release following his prison sentence.
Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
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Long Island Fisherman Sentenced to Prison Time and Pay More Than $600,000 for Fisheries FraudRead the Press Release
Anthony Joseph, a commercial fisherman from Levittown, New York, was sentenced today in federal court in Central Islip, New York, to seven months in prison for federal violations stemming from his role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.
Joseph was also sentenced to three years of supervised release following his incarceration and to pay $603,000 in restitution.
Joseph, the former operator of the dragger F/V Stirs One, pleaded guilty on April 11, 2014, to one count of mail fraud, two counts of wire fraud and one count of falsification of federal records for knowingly submitting 158 falsified fishing logs, known as fishing vessel trip reports (FVTRs) and aiding and abetting the submission of 167 falsified dealer reports from June 2009 through December 2011, as part of a scheme to defraud the United States of overharvested and underreported fluke.
Under the National Oceanic and Atmospheric Administration’s (NOAA) regulations, all of the Stirs One’s catch had to be reported to NOAA on FVTRs. During the years 2009, 2010 and 2011, the Stirs One principally targeted fluke. However, under the captaincy and with the knowledge of Joseph, the vessel exceeded its relevant federal and New York State quotas for fluke for at least 158 trips. These illegal overages totaled 302,000 pounds of fluke worth approximately $626,000.
In order to cover up the illegal fluke harvesting, Joseph falsified the FVTRs that he personally mailed to NOAA. He also utilized the exempted fisheries permit quota that was acquired through the federal RSA Program as a mask for his fluke overages. According to court documents, the defendant characterized the RSA Program as “a license to steal” and remarked that during the period of 2009 to 2011, he referred to the Research Set-Aside Program with the nickname, “Research Steal-Aside.”
NOAA regulations also required the first purchasers of seafood, i.e., directly from the fishing vessel, to report their purchases to NOAA on an electronic form known as a dealer report. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price and weight. NOAA utilizes the data in the dealer reports to set quotas and implement other management measures designed to ensure a sustainable fisheries. The dealer reports also serve as a check on the information that is submitted in FVTRs. In other words, in order to effectuate his scheme, Joseph needed to ensure that corresponding false dealer reports were being submitted that contained the same false information as was contained on the falsified FVTRs. A mismatch would have indicated a serious error or fraud, and would have been a red flag for fisheries managers. Accordingly, during June 2009 to December 2011, the defendant schemed with two other fish dealers to submit false dealer reports in furtherance of the fraud. In doing so, the defendant aided and abetted previously convicted Alan Dresner and Jones Inlet Seafood Company in their internet submission of a total of at least 167 false dealer reports from computers in New York to NOAA’s Regional Fisheries Office in Gloucester, Massachusetts.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environment and Natural Resources Division’s Environmental Crimes Section.
Leader of Rx Pill Ring Sentenced to 10 Years in Federal PrisonRead the Press Release
PITTSBURGH – A man imprisoned in Michigan has been sentenced in federal court to 10 years imprisonment and three years supervised release, on his conviction of violating the federal narcotics laws, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Telano White, 33, of Jackson, Michigan.
According to information presented to the court, Telano White was the leader of the Detroit to Pittsburgh oxycodone distribution network, even though he was incarcerated for nearly the entire period of the conspiracy. White’s wife, Brandy Bara White, received deliveries of oxycodone 30 mg. pills delivered by Tarrance Mays, Jr. and LaMont Whitfield, two Detroit residents who previously pleaded guilty for their roles in the conspiracy.
Prior to imposing sentence, Judge Fischer stated that White has admitted to being the leader of the oxycodone ring that brought large quantities of pills from Detroit to Pittsburgh. She said that it was an “affront to the justice system” that he orchestrated the criminal activity from jail.
Assistant United States Attorney Stephen R. Kaufman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Drug Enforcement Administration, Federal Bureau of Investigation, Pennsylvania Attorney General’s Office, Pennsylvania State Police and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of White.
Leader of Multi-Million Dollar Heroin Trafficking Organization Sentenced to PrisonRead the Press Release
BOSTON – A leader of a Lawrence heroin trafficking organization that operated in Massachusetts and New York was sentenced today to 13 years in federal prison.
Ygoa Almonte-Baez, 48, of Dorchester, Mass., and the Bronx, N.Y., was sentenced by U.S. District Court Judge Rya W. Zobel to 13 years in prison, five years of supervised release and ordered to forfeit $2 million. In June 2015, Almonte-Baez was convicted by a federal jury for one count of conspiracy to possess with intent to distribute and to distribute heroin and one count of possession with intent to distribute heroin.
On July 26, 2013, federal agents raided Almonte-Baez’s stash house in Lawrence and seized over 21 kilograms of highly pure heroin. Agents also found digital scales, grinders, cutting agents and other tools used for processing and packaging heroin for distribution. Almonte-Baez recorded the sales and related payments for his heroin business in ledgers that showed millions of dollars in heroin sales in 2013 alone. The same day that agents arrested Almonte-Baez, they also seized over $372,000 in drug proceeds from a courier who testified at trial that he worked for Almonte-Baez picking up tens of thousands of dollars at a time from wholesale heroin customers.
According to the charging statutes, the judge was legally required to impose a mandatory minimum sentence of 10 years in prison. Prosecutors sought a lengthier sentence arguing that the 21 kilograms of heroin agents seized from Almonte-Baez was only a small portion of what his organization distributed. Furthermore, it was of such high purity that it likely would have been diluted by a factor of three before begin distributed in street-level transactions, amounting to approximately 120,000 dosage units.
This case was prosecuted as part of the federal response to New England’s opioid crisis. A substantial increase in the purity of heroin in recent years, as well as a reduction in its price, has persuaded many individuals addicted to prescription medication to switch to heroin. Overdoses from heroin have climbed substantially as a result.
United States Attorney Carmen M. Ortiz; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Essex County Sheriff Frank G. Cousins, Jr.; and Lawrence Police Chief James X. Fitzpatrick, made the announcement today. The case was investigated by the DEA’s Cross Borders Initiative and prosecuted by Assistant U.S. Attorneys David D’Addio and Susan Winkler.
Law Enforcement and Service Providers Partner to Address Domestic ViolenceRead the Press Release
CEDAR RAPIDS, IOWA – October is National Domestic Violence Awareness month as proclaimed by Presidential Proclamation. Domestic violence statistics are alarming. Nearly one in four women and one in seven men have suffered severe physical violence by an intimate partner. Besides the physical violence endured, victims are often deprived of basic liberties, lose their autonomy and almost daily face threats to their health, safety and security. October is dedicated to reaffirming America’s commitment to ensuring that no one suffers the hurt and hardship that domestic violence brings.
To reaffirm this commitment, local and federal law enforcement agencies joined area domestic abuse service providers today at Waypoint Services to discuss, among other things, the federal laws that can be used to combat domestic violence in an effort to raise public awareness to the issue.
United States Attorney Kevin W. Techau stated, “Domestic violence continues to devastate the lives of Iowans across the state. Experience tells us that the severity of such crimes frequently escalates over time, sometimes with deadly results. It is crucial for victims of domestic abuse to receive protection and assistance from law enforcement agencies and community organizations. The United States Attorney's Office has and will work shoulder to shoulder with our law enforcement and community partners to help ensure all Iowans are safe in their homes and communities.”
Joining in this meeting and the press conference that followed were representatives from the Cedar Rapids and Marion Police Departments, Linn County Sheriff’s and County Attorney’s Offices, and several domestic abuse service providers and homeless shelters, including: Waypoint’s Domestic Violence Victim Services Program, Cedar Valley Friends of the Family Victim Shelter Program, Amani Culturally Specific Services for African Americans, Madge Phillips Center, Willis Dady Shelter, and the Catholic Worker House.
Domestic violence can result in physical injury, psychological trauma, and in severe cases, even death. The devastating physical, emotional, and psychological consequences of domestic violence can cross generations and last a lifetime. Area service providers are key partners.
Tara Beck, Director of Waypoint’s Domestic Violence Victim Services Program stated, “Waypoint’s Domestic Violence Victim Services Program continues to support upwards of 2000 victims of domestic violence every year. Many of the individuals we support face very real threats of serious injury or death. Community awareness about the dynamics of domestic violence, services available, and potential legal remedies is crucial in helping to create greater safety for victims and accountability for offenders.”
The Cedar Rapids Police Department worked closely with Cedar Valley Friends of the Family, the Linn County Attorney’s Office and other law enforcement representatives to initiate the use of an assessment tool when responding to abuse complaints. Federal funding was secured to train responders how to assess a victim’s safety level when responding to domestic disturbances. A questionnaire will be used by responding officers as one tool to assess the circumstances. A series of questions will be asked of the alleged victim to aid in making an appropriate service referral to protect them from future harm. Chief Wayne Jerman added, “We are recommitted to prevention and response efforts and to holding accountable all alleged abusers.”
Linn County Attorney Jerry Vander Sanden added that his office prosecutes approximately 500 domestic violence related cases each year. “Many of our victims report that their abuse is not an isolated incident and that they have been enduring abuse for some time. We recognize the seriousness of these offenses and know that all too often the degree of the abuse escalates, sometimes even ending in death.” Vander Sanden added, “In the last 18 months there have been six homicides in Linn County alone that have arisen out of domestic relationships. We have to respect our victims, understand why reporting domestic violence is so difficult for some and why it is difficult in some cases for our victims to cooperate with the prosecution of these domestic abuse offenses. It is our job to get justice for these people and send the message that domestic violence will not be tolerated. The home is the last place a person should feel unsafe.”
Assisting victims of abuse with futures is equally important. The Iowa Coalition Against Domestic Abuse (ICADV) is offering 35 survivors of domestic abuse the opportunity to change their futures. The Alice Barton Scholarship Program will grant $1,000 scholarships to be used towards tuition, books, supplies, childcare or housing. The Program works to empower survivors of domestic violence through education and job training. “Abuse wreaks havoc on a survivor's life. Receiving an education is one way to start putting the pieces back together,” stated Elizabeth Albright Battles, Administrator of the scholarship program for ICADV. She also noted, “A survivor has an opportunity to see themselves in a new light, learn new skills, and meet new, supportive people. Through the Alice Barton Scholarship, we hope to encourage more survivors to follow their dreams.” Learn more about this program by emailing Elizabeth Albright Battles at [email protected], or by calling 515-244-8028.
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Lafayette man sentenced to 24 months in prison for possessing stolen firearmRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Lafayette man was sentenced Wednesday to 24 months in prison for possessing a stolen handgun.
Cordera Dean Felix, 28, of Lafayette, was sentenced by U.S. District Judge Richard T. Haik on one count of possession of a stolen firearm. He was also sentenced to one year of supervised release. According to evidence presented at the June 24, 2015 guilty plea, Lafayette Police arrested Felix on June 27, 2014, near the 900 block of East Simcoe Street on an active warrant. Officers recovered a Glock model 36, .45 caliber pistol from Felix. He stated that he was approached by juveniles who showed him a bag containing approximately eight handguns. He purchased the .45 caliber pistol from them. The handgun was reported stolen from Dave’s Gun Shop in Lafayette.
This case is part of Project Safe Neighborhoods, which is a Department of Justice initiative designed to reduce firearm crimes by removing dangerous and persistent felons from the community and promote firearm safety.
The ATF and the Lafayette Police Department conducted the investigation. Assistant U.S. Attorney Dominic A. Rossetti prosecuted the case.
Justice Department Settles with Colorado Youth Wrestling League to Prevent Disability DiscriminationRead the Press Release
The Justice Department announced today that it reached a settlement with the operators of Pikes Peak Wrestling League, a youth wrestling league that serves approximately 4,000 children across the state of Colorado, under the Americans with Disabilities Act (ADA). The settlement resolves allegations that Pikes Peak Youth Sports Association LLC and Peak Youth Sports Association violated the ADA by failing to modify their policies, practices or procedures to allow a child who has dwarfism to “play down” one age division at the 2014 Colorado State Wrestling Championship so that he could compete with wrestlers closer to his weight and size. The agreement was filed today as a proposed consent decree, which must be approved by the U.S. District Court for the District of Colorado, along with a complaint.
Under the agreement, the wrestling league will adopt and publicize a disability nondiscrimination policy, including procedures for handling requests to modify policies for wrestlers with disabilities. The league will train employees on ADA requirements and invite coaches affiliated with Pikes Peak Wrestling League and USA Wrestling Directors to attend this training, free of charge. In addition, the wrestling league will pay compensatory damages to the child identified in the complaint and report to the department on its compliance with the agreement.
“Participating in athletic competition is a formative experience for children across this country, and children with disabilities are entitled to participate equally in youth sports,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “The ADA celebrated its 25th anniversary this year and private entities that operate youth athletics should be well aware of their obligations under the ADA.”
Title III of the ADA requires public accommodations, including youth sports leagues like Pikes Peak Wrestling League, to reasonably modify their policies, practices or procedures, when such modifications are necessary to afford their goods, services, facilities, privileges, advantages or accommodations to individuals with disabilities and when such modifications would not fundamentally alter the nature of their goods, services, facilities, privileges, advantages or accommodations. For more information about the ADA, call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
The relevant court documents can be found at the following links: complaint and consent decree.
Justice Department Announces Four Banks Reach Resolutions Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Luzerner Kantonalbank AG (Luzerner), Habib Bank AG Zurich (HBZ), Banque Heritage S.A. and Hyposwiss Private Bank Genève S.A. (Hyposwiss Geneva) have reached resolutions under the department’s Swiss Bank Program. These banks will collectively pay penalties totaling more than $25 million and continue to cooperate with the department.
“With each agreement executed under the Swiss Bank Program, the department continues to eradicate Swiss bank secrecy and hold accountable those financial institutions that profited from willfully assisting accountholders in the evasion of their U.S. tax obligations,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Working with our partners at the Internal Revenue Service, we are following leads and pursuing criminal and civil investigations focused on targets around the globe.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.
Luzerner was established in 1850 by the Canton of Lucerne, a sovereign political subdivision of the Swiss Confederation. Luzerner was aware that U.S. taxpayers had a legal duty to report to the Internal Revenue Service (IRS) and pay taxes on the basis of all their income, including income earned in accounts that the U.S. taxpayers maintained at Luzerner. Luzerner knew or had reason to know that it was likely some taxpayers who maintained accounts at Luzerner were not complying with their U.S. tax and reporting obligations.
Luzerner offered a variety of traditional Swiss banking services that it knew could assist, and did assist, U.S. taxpayers in concealing their identity from the IRS by minimizing the paper trail associated with their undeclared assets and income. These services included hold mail and numbered accounts. Luzerner also opened and maintained accounts held in the name of non-U.S. corporations, foundations or other entities, while knowing, or having reason to know, that a U.S. taxpayer ultimately held an interest in these non-U.S. entities. In at least six cases, these structured accounts were established in the names of entities set up in Panama, Seychelles and the British Virgin Islands by two Swiss-based advisory companies.
Luzerner maintained 115 U.S.-related accounts for insurance carriers, commonly called insurance-wrapped accounts, as to which Luzerner was aware that the policy holder or premium payer was a U.S. person. These accounts titled in the name of an insurance carrier, but are funded with bankable assets transferred to the account by the beneficial owner of the policy. The insurance carriers, at Luzerner’s request, provided Luzerner with the identities of the beneficial owners of these policies. The assets in the account, while titled in the name of the insurance carrier, were managed by the external asset manager for the beneficial owner through a power of attorney given by the insurance carrier.
Nearly all of these insurance-wrapped accounts were managed by a single external asset manager. In an e-mail sent to the head of the private banking department in December 2007, the head of the external asset manager desk at Luzerner described that external asset manager as “[specializing] in aspects of legal asset protection as well as tax optimization and has approx. CHF 750 million [Swiss francs] in assets under management, in particular in life insurances. Its main clients include wealthy U.S. nationals (doctors, lawyers, etc.).” Luzerner knew or had reason to know that U.S. citizens, residents and others obligated to pay U.S. taxes who contributed the assets to the insurance-wrapped accounts sought to conceal their ownership of those and also to evade their U.S. federal income tax obligations.
Since Aug. 1, 2008, Luzerner held a total of 595 U.S.-related accounts, which amounted to approximately $300 million. Luzerner will pay a penalty of $11.031 million.
HBZ primarily serves South Asian commercial businesses and entrepreneurs, and their families. In 1941, Habib Bank Ltd. (HBL), the predecessor to HBZ, was founded in Bombay (now Mumbai), India. In 1967, the founders of HBL founded HBZ as a stand-alone entity in Switzerland. In 1974, Pakistan nationalized HBL and all of its subsidiaries and overseas branches. Following the nationalization of HBL, the founders of HBZ rebuilt a global banking business independent of HBL. HBZ has branches and subsidiaries in Canada, Hong Kong, the Isle of Man, Kenya, Pakistan, South Africa, Switzerland, the United Arab Emirates and the United Kingdom.
The HBZ Swiss Office has local management, a local banking team and a client base with accounts held in Switzerland that is distinct from, and tracked and managed separately from, the HBZ operations in other jurisdictions. The HBZ Swiss Office assisted or otherwise facilitated U.S. clients in establishing and maintaining undeclared accounts in a manner that the HBZ Swiss Office knew or should have known was designed to conceal the U.S. clients’ ownership or beneficial interest in the accounts.
Employees of Habib American Bank, Inc. (HAB), an unrelated bank with common ownership, introduced or referred U.S. persons to the HBZ Swiss Office. HBZ has identified one account opened at the HBZ Swiss Office for a U.S. person as a result of a referral from HAB. HBZ and HAB are owned through separate legal structures for the benefit of members of the same extended family.
In connection with one relationship, the HBZ Swiss Office assisted with creating four Liechtenstein “Anstalts” or entities with U.S. beneficial owners. A Liechtenstein law firm structured and managed these entities. This Liechtenstein law firm served as the nominee, director and signatory authority of these accounts. The HBZ Swiss Office knew or should have known that these entities were created with an intention of masking U.S. ownership. The HBZ Swiss Office further facilitated the transfer of the funds from these accounts to HBZ Finance Limited, Hong Kong.
In connection with closing U.S.-related accounts, the HBZ Swiss Office permitted certain U.S. clients to transfer funds to accounts held at other HBZ branches and subsidiaries, or to other accounts at the HBZ Swiss Office, either knowing or when it should have known that such transfers were motivated by a desire to avoid U.S. tax or information reporting requirements.
Since Aug. 1, 2008, HBZ had 125 U.S.-related accounts, comprising approximately $118.9 million in assets under management. HBZ will pay a penalty of $9.4 million.
Banque Heritage is a private bank headquartered in Geneva. It was founded in 1986 as an asset management firm and obtained its Swiss banking license in 2003. Banque Heritage has a branch in Zurich, a representative office in Lugano, Switzerland, and a fully licensed banking operation in Uruguay. It also had an investment advisory company in Guernsey, which was closed in 2014.
Banque Heritage offered hold mail and opened accounts in the names of offshore structures. Since Aug. 1, 2008, Banque Heritage had 47 U.S.-related accounts with U.S. beneficial owners that were held by entities created in Panama, the British Virgin Islands, Hong Kong, Belize or other foreign countries.
Banque Heritage established banking relationships with U.S. taxpayers who were transferring funds from other Swiss financial institutions that were closing such accounts. In at least seven such instances, comprising at least $10 million, Banque Heritage knew, or had reason to know, that the accounts were or may have been undeclared. Banque Heritage also:
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Transferred the beneficial ownership of some U.S. taxpayers’ accounts to non-U.S. persons’ accounts at Banque Heritage; and
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Facilitated the transfer, to Banque Heritage’s affiliate in Uruguay, of approximately $700,000 held in at least two U.S.-related accounts being closed at Banque Heritage, when it knew or had reason to know that these accounts were undeclared.
In May 2001, Banque Heritage entered into a Qualified Intermediary (QI) Agreement with the IRS and required all clients to sign a declaration confirming whether the client was a U.S. national or U.S. resident. Banque Heritage also asked U.S. nationals and U.S. residents to provide an IRS Form W-9. Prior to May 2009, Banque Heritage’s position was that it could service a U.S. client without reporting the U.S. taxpayer’s interest in the account to the IRS so long as it either prohibited the accountholder from trading in U.S.-based securities or the account was nominally structured in the name of a non-U.S.-based entity accompanied by an IRS Form W-8BEN or a Bank Non-U.S. Status Declaration. In the latter circumstance, U.S. clients, with the assistance of their advisors, would create an entity, such as a Panama corporation or a British Virgin Islands company, and pay a fee to third parties to act as corporate directors. Those third parties, at the direction of the U.S. client, would then open a bank account at Banque Heritage in the name of the entity or transfer a pre-existing Swiss bank account from another Swiss bank.
In cases involving a non-U.S. entity, Banque Heritage was aware that a U.S. client was the true beneficial owner of the account and would receive from the entity’s directors an IRS Form W-8BEN or equivalent bank document that falsely declared that the beneficial owner was not a U.S. taxpayer. Knowing that it was probable that certain U.S. taxpayers were not complying with their U.S. income tax and reporting obligations, Banque Heritage effectively provided assistance to certain U.S. taxpayers in evading their U.S. tax obligations, and permitted three accounts to trade in U.S. securities without reporting account earnings or transmitting any withholding taxes to the IRS, as required by the QI Agreement.
Since Aug. 1, 2008, Banque Heritage had 131 U.S.-related accounts with an aggregate maximum balance of approximately $198 million. Banque Heritage will pay a penalty of $3.846 million.
Hyposwiss Geneva is a private bank based in Geneva that was founded in 1997 as Marcuard Cook & Cie S.A. Hyposwiss Geneva was acquired by Anglo Irish Bank Corporation Ltd. in 2001 and then by St. Galler Kantonalbank AG, a Category 2 bank in the Swiss Bank Program, in early 2008. St. Galler Kantonalbank AG announced in June 2013 that it was divesting Hyposwiss Geneva and that Mirelis InvesTrust S.A. would become the new shareholders of Hyposwiss Geneva at the beginning of 2014.
Hyposwiss Geneva opened, serviced and profited from accounts for U.S. clients who Hyposwiss Geneva knew or had reason to know were not complying with their U.S. income tax obligations. In addition to offering the traditional Swiss banking services of hold mail and accounts with code names or numbers, Hyposwiss Geneva accepted instructions in connection with at least 22 U.S.-related accounts not to invest in U.S. securities and not to disclose the names of U.S. clients to U.S. tax authorities, including the IRS. Hyposwiss Geneva assisted at least one U.S. taxpayer client in concealing his identity from the IRS by titling securities in the name of the U.S. taxpayer’s Hyposwiss Geneva relationship manager as a nominee of the U.S. taxpayer by depositing the securities in the relationship manager’s personal account with another Swiss bank. Hyposwiss Geneva also processed large cash and gold withdrawals totaling approximately $3.4 million for at least nine U.S. taxpayers at or around the time the clients’ accounts were closed, even though Hyposwiss Geneva knew, or had reason to know, the accounts contained undeclared assets.
Since Aug. 1, 2008, Hyposwiss Geneva opened and maintained at least 21 undeclared accounts in the names of structures that were beneficially owned by U.S. taxpayers, while knowing, or having reason to know, that these structures were used by U.S. clients to help conceal their identities from the IRS. One structured account was a U.S. trust, two were Swiss-based operating companies and 21 U.S.-related accounts were held by a non-U.S. structure, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their undeclared accounts from the IRS. The entities were incorporated as follows: 10 companies in the British Virgin Islands; five companies in Panama; one trust in the Cook Islands; and one each in Liberia, St. Vincent & the Grenadines, the Marshall Islands, and the Cayman Islands.
Since Aug. 1, 2008, Hyposwiss Geneva held a total of 91 U.S.-related accounts with approximately $74.9 million in assets under management. Hyposwiss Geneva will pay a penalty of $1.109 million.
In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today's settlements and the steady success of DOJ’s Swiss Bank Program continue to alter the thinking of those seeking to hide their money offshore,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International Division (LB&I). “Through these agreements, we are shining a bright light on those who sought to evade paying what they owe. U.S. taxpayers with undeclared accounts need to report their foreign accounts and pay their income taxes”
“The bank agreements announced today continue to change the paradigm of the offshore banking world and the message sent to that community should be clear,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “The days of secretly hiding funds offshore to avoid paying taxes are over. We are proud of our joint efforts and the resulting success of the program to date. Each additional agreement provides us with highly-detailed data on the accounts, schemes and linkages we need to combat international tax evasion.”
Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and the IRS LB&I Division for their substantial assistance. Ciraolo also thanked Michael N. Wilcove, Henry C. Darmstadter, John E. Sullivan, Thomas G. Voracek and Kimberle E. Dodd, who served as counsel on these matters, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Illinois Man Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
A Bolingbrook, Illinois, man pleaded guilty today to a federal charge that he attempted to travel overseas to join a designated foreign terrorist organization in Syria.
The guilty plea was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division.
Mohammed Hamzah Khan, 20, pleaded guilty to one count of attempting to provide material support to a foreign terrorist organization, identified in a written plea agreement as the Islamic State of Iraq and the Levant (ISIL).
Khan, a U.S. citizen from southwest suburban Bolingbrook, faces a maximum sentence of 15 years in prison. U.S. District Judge John J. Tharp Jr. of the Northern District of Illinois did not immediately schedule a sentencing hearing. A status hearing was set for Dec. 3, 2015, at 12:30 p.m. EST.
Khan has been detained in federal custody since he was arrested on Oct. 4, 2014, at O’Hare International Airport by members of the Chicago Joint Terrorism Task Force.
According to his plea agreement, beginning no later than approximately February 2014, Khan used the Internet to obtain introductions to ISIL members in Syria and to assist him with traveling there to join the terrorist group. Khan spoke with ISIL members to coordinate the logistics of his admission into ISIL-controlled territory, the plea agreement states.
Khan also admitted in the plea agreement that he knew ISIL had been designated by the United States as a foreign terrorist organization. Upon arriving in Syria, according to the plea agreement, Khan intended to work under the direction and control of ISIL, and be required to take any assignment ISIL gave him.
The case was investigated the FBI and the Chicago Joint Terrorism Task Force. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) and the Illinois State Police also provided significant assistance in the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Matt Hiller, Angel Krull and Sean Driscoll of the Northern District of Illinois, and Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.
Mohammed Hamzah Khan Plea Agreement
Hudson County, New Jersey, Man Admits He Conspired to Provide Material Support to ISILRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man today admitted that he conspired to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division announced.
Alaa Saadeh, 24, of West New York, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiring with others to provide material support to ISIL. He remains detained without bail.
“Alaa Saadeh is the second defendant in this case who has admitted trying to provide material support to a known terrorist organization,” U.S. Attorney Fishman said. “That organization, and others who share its goals, are intent on recruiting people in this country and around the world to join their campaign against our security. The fight against these kinds of groups is going on around the world, but is also being waged here at home. They are intent on threatening the safety of Americans here and abroad, and we and our law enforcement partners are intent on stopping them.”
“Saadeh conspired with his brother and others to travel overseas to join ISIL,” Assistant Attorney General Carlin said. “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“Today in the U.S. District Court of New Jersey Alaa Saadeh admitted he planned to travel to Syria to join ISIL along with others,” FBI Newark Special Agent in Charge Richard M. Frankel said. “Now, thanks to the efforts of Newark FBI’s Joint Terrorism Task Force, Saadeh will go to prison rather than take up arms overseas.”
According to documents filed in this and related cases and statements made in court:
Saadeh admitted that prior to his arrest June 29, 2015, by the FBI Joint Terrorism Task Force (JTTF), he planned to travel overseas to join ISIL along with others. Saadeh discussed the plans to join ISIL with his brother, Nader Saadeh, Samuel Rahamin Topaz, and Munther Omar Saleh, and admitted that at various times each of them indicated that they wanted to join ISIL. Saadeh also admitted he watched ISIL-related videos with Nader Saadeh and Topaz, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.
On May 5, 2015, Saadeh’s brother, Nader Saadeh, departed the United States with plans to travel overseas to join ISIL as part of the conspiracy, according to Alaa Saadeh’s statements in court today. Saadeh admitted assisting his brother with these plans by letting him purchase airline tickets using Saadeh’s credit card and by removing the SIM card from Nader’s smartphone and resetting the smartphone in an effort to avoid detection. Saadeh admitted that Saleh assisted Nader Saadeh by giving him a contact who would facilitate Nader’s travel from Turkey to ISIL in Syria.
Saadeh admitted that after Nader Saadeh left the United States, Saleh and Topaz intended to travel overseas to join ISIL. After becoming aware the FBI was investigating this matter, Saadeh instructed an individual who knew of Nader Saadeh’s support for ISIL to lie to the FBI if the individual was interviewed. Saadeh told this individual to “just play stupid,” “pretend it never happened,” and “keep it honest up to a point.”
Saadeh admitted knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes, and executing individuals who did not obey ISIL’s commands.
The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 15 years in prison and a fine of $250,000. Sentencing is scheduled for Feb. 16, 2016.
Saadeh’s alleged conspirators are being prosecuted and are currently in federal custody. On Sept. 9, 2015, Topaz pleaded guilty before Judge Wigenton to conspiring to provide material support to ISIL. Nader Saadeh has been charged in a criminal complaint with conspiring to provide material support to ISIL, among other charges. Saleh has been indicted on terrorism-related charges brought by the U.S. Attorney’s Office for the Eastern District of New York.
The charges and allegations against Nader Saadeh and Saleh are merely accusations, and they are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman and Assistant Attorney General Carlin credited special agents of the FBI, under the direction of Special Agent in Charge Frankel in Newark, and the JTTF, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the U.S. Attorney’s Office National Security Unit in Newark, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
Defense counsel for Alaa Saadeh: Maria Noto Esq., Matawan, New Jersey
Houston Man Pleads Guilty to Conspiracy to Defraud MedicareRead the Press Release
HOUSTON - A Houston businessman has entered a guilty plea to engaging in a conspiracy to defraud Medicare of more than $6.6 million, announced U.S. Attorney Kenneth Magidson.
At a hearing held today before U.S. District Kenneth Ellison, Robert Manning, 60, admitted he participated in a three-year conspiracy to defraud Medicare by paying kickbacks to Medicare beneficiaries whose Medicare information was then used to file fraudulent claims with Medicare.
During his plea, Manning admitted that beginning in 2008 he was introduced to a Houston medical clinic manager who agreed to pay Manning per head for Medicare beneficiaries brought to the clinic. Manning, in turn, would pay the marketers who brought the beneficiaries, keeping a small portion as his fee. Manning admitted he was paid $125 per Medicare beneficiary allegedly treated at the clinic which was paid on a weekly basis. Manning paid the marketers $100 in cash per beneficiary and kept the remaining $25. On some occasions, Manning would deal directly with a Medicare beneficiary. In those instances, he would pay the beneficiary $100 in cash and again keep the remaining $25. Manning admitted he knew the Medicare billing was fraudulent because he knew that the reason “patients” were going to the clinic was because they were being paid to do so, and not because they needed a specific medical treatment.
According to the factual basis in support of the plea, the clinic billed Medicare $6.6 million for the diagnostic testing allegedly done and was paid $2.9 million.
Judge Ellison has set sentencing for Feb. 16, 2016, at which time Manning faces up to 15 years in federal prison and a possible $500,000 fine. As part of his plea, Manning has also agreed to pay restitution of $2.9 million to Medicare. He was permitted to remain on bond pending that hearing.
The criminal charges are the result of a joint investigation by the Texas Attorney General’s Office - Medicaid Fraud Control Unit, IRS - Criminal Investigation, U.S. Department of Health and Human Services - Office of Inspector General and the FBI. Assistant United States Attorneys Al Balboni and Adrienne Frazior are prosecuting the case.
Government Intervenes in Lawsuits Alleging That Skilled Nursing Chain SavaSeniorCare Provided Medically Unnecessary TherapyRead the Press Release
The government has intervened in three False Claims Act lawsuits and filed a consolidated complaint against SavaSeniorCare LLC and related entities (Sava) alleging that Sava knowingly and routinely submitted false claims to Medicare for rehabilitation therapy services that were not medically reasonable and necessary, the Department of Justice announced today. Sava is one of the nation’s largest healthcare providers, operating approximately 200 skilled nursing facilities (SNFs) in 23 states.
“The provision of Medicare benefits must be dictated by patient need, not by Medicare providers’ efforts to maximize profits by pressuring their employees to provide medically unnecessary services,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will continue to aggressively pursue companies that seek to engage in this kind of fraudulent scheme.”
The government’s complaint alleges that Sava exerted significant pressure on its SNFs to meet unrealistic financial goals that resulted in the provision of medically unreasonable, unnecessary and unskilled services to Medicare patients. Sava allegedly set these aggressive, prospective corporate targets for the highest Medicare reimbursement rates to significantly increase Sava’s revenues without regard for its patients’ actual clinical needs and then pressured its staff to meet those goals. Sava also allegedly delayed discharging patients from its facilities, even though the patients were medically ready to be discharged, in order to increase its Medicare payments.
“Enforcing the False Claims Act and combating healthcare fraud remains a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera of the Middle District of Tennessee. “When healthcare providers subject patients to unnecessary treatment, we will intervene and hold them accountable.”
The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in these cases. Under the Act, a defendant that is found liable is subject to damages equal to three times the government’s loss plus applicable penalties.
The government’s intervention in these matters illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The lawsuits are being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Middle District of Tennessee. Investigative support is being provided by the U.S. Attorneys’ Offices of the Southern District of Texas and the Western District of Texas; the Offices of Inspector General for the Department of Health and Human Services and the Office of Personnel Management and the National Association of Medicaid Fraud Control Units.
The cases are captioned United States ex rel. Hayward v. SavaSeniorCare, LLC, et al., No. 3:11-0821 (M.D. Tenn.); United States ex rel. Scott v. SavaSeniorCare Administrative Services, LLC, 3:15-0404 (M.D. Tenn.); and United States ex rel. Kukoyi v. Sava Senior Care, L.L.C., et al., No. 3:15-1102 (M.D. Tenn.).
The claims asserted in the government’s complaint against Sava are allegations only and there has been no determination of liability.
Government Intervenes in Lawsuits Alleging That Skilled Nursing Chain SavaSeniorCare Provided Medically Unnecessary TherapyRead the Press Release
The government has intervened in three False Claims Act lawsuits and filed a consolidated complaint against SavaSeniorCare, LLC and related entities, (Sava) alleging that Sava knowingly and routinely submitted false claims to Medicare for rehabilitation therapy services that were not medically reasonable and necessary, the Department of Justice announced today.
Sava is one of the nation’s largest healthcare providers, operating approximately 200 skilled nursing facilities (SNFs) in 23 states, including four in Tennessee: Greenhills Health and Rehabilitation Center in Nashville; Lebanon Health and Rehabilitation Center in Lebanon; Newport Health and Rehabilitation Center in Newport; and Norris Health and Rehabilitation Center in Andersonville, Tennessee.
“Enforcing the False Claims Act and combating healthcare fraud remains a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera of the Middle District of Tennessee. “When healthcare providers subject patients to unnecessary treatment, we will intervene and hold them accountable.”
“The provision of Medicare benefits must be dictated by patient need, not by Medicare providers’ efforts to maximize profits by pressuring their employees to provide medically unnecessary services,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will continue to aggressively pursue companies that seek to engage in this kind of fraudulent scheme.”
The government’s complaint alleges that Sava exerted significant pressure on its SNFs to meet unrealistic financial goals that resulted in the provision of medically unreasonable, unnecessary and unskilled services to Medicare patients. Sava allegedly set these aggressive, prospective corporate targets for the highest Medicare reimbursement rates to significantly increase Sava’s revenues without regard for its patients’ actual clinical needs and then pressured its staff to meet those goals. Sava also allegedly delayed discharging patients from its facilities, even though the patients were medically ready to be discharged, in order to increase its Medicare payments.
The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in these cases. Under the Act, a defendant that is found liable is subject to damages equal to three times the government’s loss plus applicable penalties. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The lawsuits are being handled by the Civil Division’s Commercial Litigation Branch and Assistant U.S. Attorney Christopher C. Sabis of the Middle District of Tennessee. Investigative support is being provided by the U.S. Attorneys’ Offices of the Southern District of Texas and the Western District of Texas; the Offices of Inspector General for the Department of Health and Human Services and the Office of Personnel Management and the National Association of Medicaid Fraud Control Units.
The cases are captioned United States ex rel. Hayward v. SavaSeniorCare, LLC, et al., No. 3:11-0821 (M.D. Tenn.); United States ex rel. Scott v. SavaSeniorCare Administrative Services, LLC, 3:15-0404 (M.D. Tenn.); and United States ex rel. Kukoyi v. Sava Senior Care, L.L.C., et al., No. 3:15-1102 (M.D. Tenn.).
The claims asserted in the government’s complaint against Sava are allegations only and there has been no determination of liability.
Four Men Indicted for Marijuana Cultivation Operation at “the Needles” Within Sequoia National ForestRead the Press Release
FRESNO, Calif. — A federal grand jury returned a four-count indictment today against Armando Arnoldo Martinez-Tinoco, 36; his brother, Juan Carlos Martinez-Tinoco, 41; and Luis Enrique Flores, 23, all of Mexico; and Ivan De Jesus Jimenez, 30, of La Puente, California, charging them with a conspiracy to cultivate marijuana on public land, cultivating and possessing marijuana with intent to distribute, and damaging public land and natural resources, United States Attorney Benjamin B. Wagner announced.
According to court documents, on October 17, 2015, law enforcement officers entered the marijuana cultivation site that was near The Needles, a series of massive granite spires atop a ridge in the Sequoia National Forest in Tulare County. The defendants fled the grow site, but were later found in the Kernville and Weldon areas. Agents removed 2,608 marijuana plants from the site and found highly toxic chemicals, fertilizer, and trash strewn throughout. The cultivation activities caused extensive damage to the land and natural resources. Native trees and plants were cut down to make room for the marijuana. Water was diverted from a spring that supports a dwindling breed of indigenous trout, the Kern River Rainbow Trout.
This case is the product of an investigation by the U.S. Forest Service, the U.S. Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the California Department of Fish and Wildlife, the Tulare County Sheriff’s Office, and the Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.
The defendants are scheduled for arraignment on November 2, 2015, in Fresno. If convicted of the drug offenses, the defendants face a maximum statutory penalty of 20 years in prison and a $1 million fine. If convicted of the environmental crime, the defendants face a maximum statutory penalty of 10 years in prison, a $250,000 fine, and restitution. 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.
Fort Thompson Man Acquitted of Robbery and AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that a Fort Thompson, South Dakota, man was acquitted of Robbery, Assault Resulting in Serious Bodily Injury, and Assault by Strangulation and Suffocation as a result of a federal jury trial in Pierre, South Dakota, on October 28, 2015.
Jami Walking Bull, age 35, was indicted by a federal grand jury on August 11, 2015
The charges stemmed from an alleged incident that occurred on May 12, 2015, when Walking Bull allegedly robbed and assaulted a man on the Crow Creek Indian Reservation.
The investigation was conducted by the Bureau of Indian Affairs, Crow Creek Agency and the U.S. Attorney's Office prosecuted the case.
Fort Hall Man Indicted for Meth DistributionRead the Press Release
POCATELLO – Charles Eugene Allhands, 52, of Fort Hall, Idaho, was indicted by a federal grand jury this week on charges of distribution of methamphetamine, U.S. Attorney Wendy J. Olson announced.
The indictment alleges that on March 5, May 20, and June 9, 2015, Allhands distributed methamphetamine in violation of Title 21, United States Code, Section 841(a)(1) and (b(1)(C). Allhands appeared today in United States District Court in Pocatello and entered not guilty pleas to the charges. A jury trial is scheduled before Chief District Judge B. Lynn Winmill on December 7, 2015.
The charge of distribution of methamphetamine is punishable by up to 20 years in prison, a maximum fine of $1,000,000, and at least three years of supervised release.
The case was investigated by the Fort Hall Police Department, the Bingham County Sheriff’s Office, and the Federal Bureau of Investigation.
An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Tate County, Mississippi, Sheriff’s Deputy Pleads Guilty to Unlawful TasingRead the Press Release
Former Tate County, Mississippi, Lieutenant Randy T. Doss pleaded guilty in federal court today to unlawfully tasing an inmate at the Tate County Jail. The tasing, which occurred in 2012, caused J.W., a pre-trial detainee, to fall to the concrete floor and fracture his skull.
On Jan. 27, 2012, a jail-wide search was ordered after an inmate was reportedly assaulted with a razor. When corrections officers entered J.W.’s pod to conduct their search, he and his fellow inmates were ordered to stand facing the wall. At the time of the incident, the victim was standing against a wall with his hands over his head, not posing a physical threat to anyone. Doss tased the victim from 11 feet away. The victim fell backward and hit his head on the concrete floor, necessitating brain surgery. The incident was captured on video.
“The defendant was an experienced law-enforcement officer who abused the authority entrusted to him,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “The right to be free from excessive force is a Constitutional guarantee for all citizens, including those in custody. The U.S. Department of Justice and the Civil Rights Division will vigorously enforce this right.”
“The actions of the defendant are reprehensible and inexcusable,” said U.S. Attorney Felicia C. Adams of the Northern District of Mississippi. “He abused his authority, violated the law and the public trust. While the majority of law enforcement officers are hardworking professionals who risk their lives daily for our safety, the U. S. Attorney's Office is committed to aggressively prosecuting those officers who break the law and violate the public trust.”
“Officers who abuse their power further undermine the public's trust in law enforcement,” said Special Agent in Charge Donald Alway of the FBI’s Jackson Division. “These types of cases are some of the FBI's most important work and help ensure and maintain a healthy democracy."
Doss, 63, had more than 20 years of experience in law enforcement. He had been certified to train other officers on the proper use of force, including how to use a taser.
The defendant was indicted on March 30, 2015, by a grand jury sitting in Oxford, Mississippi. He was charged with a single count of violating the victim’s right not to be deprived of liberty without due process of law. Doss was charged with both using a dangerous weapon – a taser electronic control device – and causing bodily injury to the victim.
The defendant will be sentenced by U.S. District Court Judge Michael P. Mills of the Northern District of Mississippi on Feb. 18, 2016.
This case was investigated by the FBI’s Jackson Division, with the cooperation of the Tate County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Robert Coleman of the Northern District of Mississippi and Trial Attorneys Dana Mulhauser and Andres Palacio of the Civil Rights Division.
Doss Plea Agreement
Former Tate County, Mississippi, Sheriff’s DeputyRead the Press Release
WASHINGTON – Former Tate County, Mississippi, Lieutenant Randy T. Doss pleaded guilty in federal court today to unlawfully tasing an inmate at the Tate County Jail. The tasing, which occurred in 2012, caused J.W., a pre-trial detainee, to fall to the concrete floor and fracture his skull.
On Jan. 27, 2012, a jail-wide search was ordered after an inmate was reportedly assaulted with a razor. When corrections officers entered J.W.’s pod to conduct their search, he and his fellow inmates were ordered to stand facing the wall. At the time of the incident, the victim was standing against a wall with his hands over his head, not posing a physical threat to anyone. Doss tased the victim from 11 feet away. The victim fell backward and hit his head on the concrete floor, necessitating brain surgery. The incident was captured on video.
“The defendant was an experienced law-enforcement officer who abused the authority entrusted to him,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “The right to be free from excessive force is a Constitutional guarantee for all citizens, including those in custody. The U.S. Department of Justice and the Civil Rights Division will vigorously enforce this right.”
“The actions of the defendant are reprehensible and inexcusable,” said U.S. Attorney Felicia C. Adams of the Northern District of Mississippi. “He abused his authority, violated the law and the public trust. While the majority of law enforcement officers are hardworking professionals who risk their lives daily for our safety, the U. S. Attorney's Office is committed to aggressively prosecuting those officers who break the law and violate the public trust.”
“Officers who abuse their power further undermine the public's trust in law enforcement,” said Special Agent in Charge Donald Alway of the FBI’s Jackson Division. “These types of cases are some of the FBI's most important work and help ensure and maintain a healthy democracy."
Doss, 63, had more than 20 years of experience in law enforcement. He had been certified to train other officers on the proper use of force, including how to use a taser.
The defendant was indicted on March 30, 2015, by a grand jury sitting in Oxford, Mississippi. He was charged with a single count of violating the victim’s right not to be deprived of liberty without due process of law. Doss was charged with both using a dangerous weapon – a taser electronic control device – and causing bodily injury to the victim.
The defendant will be sentenced by U.S. District Court Judge Michael P. Mills of the Northern District of Mississippi on Feb. 18, 2016.
This case was investigated by the FBI’s Jackson Division, with the cooperation of the Tate County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Robert Coleman of the Northern District of Mississippi and Trial Attorneys Dana Mulhauser and Andres Palacio of the Civil Rights Division.
Former Roseville Resident Sentenced for Loan Modification and Foreclosure Rescue Scam That Targeted Spanish-Speaking CommunityRead the Press Release
SACRAMENTO, Calif. —Martin Wayne Flanders, 51, formerly of Roseville, was sentenced today by United States District Judge Troy L. Nunley to six years and five months in prison for a scheme that targeted distressed homeowners, United States Attorney Benjamin B. Wagner announced.
In February 2015, Flanders and his wife Ligia Sandoval Spafford (Sandoval), 48, of Roseville, pleaded guilty to mail fraud for their participation in the fraud scheme.
According to court documents, between 2008 and 2010, Flanders charged clients advance fees in exchange for a number of financial services, including loan modifications, mortgage loan audits, credit repair, debt relief, bankruptcy filings, and a program to sell homes to “investors” with a rent-to-own option. Flanders and Sandoval marketed these services to economically distressed homeowners with particular emphasis on those who were Spanish speakers. During a radio program aired twice weekly by a Bay Area Spanish‑language Christian radio station, Radio Luz, Sandoval promoted the services she and Flanders offered. Flanders also advertised on a Spanish-language television station, Univision, and in Spanish-language magazines. About 98 percent of the defendants’ clients were of Hispanic descent, some of whom spoke little to no English. Sandoval speaks Spanish, Flanders does not.
Flanders and Sandoval made numerous false statements to investors as to the success of the programs being offered or refunds that would be available if the programs were not successful. “Ghost offers” – i.e., fictitious offers to purchase the victim’s property through short sale – and “skeleton bankruptcies” – i.e., sham bankruptcy petitions that were quickly dismissed by the bankruptcy court – were also used by Flanders or Sandoval to try to stall the foreclosure process. At least 25 to 30 individuals paid for services and did not receive them or did not receive refunds when the programs failed to deliver as promised. The total loss to the victims is at least $125,000. Some homeowners who were not able to obtain relief were foreclosed upon by their lenders.
“By targeting people in financial distress with limited English proficiency, Flanders sought to enrich himself on the backs of those who could least afford it,” said United States Attorney Wagner. “We are gratified by the sentence imposed by the Court, and we will continue to focus our efforts on the prosecution of such predatory fraud schemes.”
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Todd A. Pickles and Shelley Weger are prosecuting the case.
Flanders has been detained since his arrest in October 2012. Sandoval is currently out of custody. Sandoval is scheduled to be sentenced by Judge Nunley on March 3, 2016. She faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will 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.
Former Las Vegas Couple Sentenced to Prison for Defrauding over 400 Vulnerable Homeowners in $3.8 Million Mortgage ScamRead the Press Release
ALEXANDRIA, Va. – Kristen Michelle Ayala, aka Amber Lynch, aka Olivia Benet, aka Grace Williams, 30, and Joshua Manuel Sanchez, aka Nelson Cruz, aka Chris Ward, aka Daniel Mora, 34, both formerly of Las Vegas, were sentenced today for conspiracy to commit wire fraud for their role in a $3.8 million dollar mortgage modification scam.
Ayala was sentenced to 135 months in prison, while Sanchez was sentenced to 151 months in prison. Both defendants were also sentenced to three years of supervised release and ordered to pay full restitution to the victims of their crime.
“This nefarious crime, rooted in dishonesty and greed, ruined the lives of the victims while simultaneously enriching the lives of Ayala and Sanchez,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Their deceitful actions targeted extremely vulnerable individuals, causing trauma and stress in their lives which led to divorce, severe health issues, and extreme despair to children, parents, combat veterans, and people who were already struggling to make it. I want to thank our prosecutors and the investigative team at SIGTARP for their outstanding work on this case.”
In a statement of facts filed with the plea agreement, from in and around October 2012 through September 2014, Ayala, Sanchez, and others, executed a scheme that deliberately targeted extremely vulnerable individuals who were in dire financial straits, desperate and literally on the verge of losing their homes. Ayala and Sanchez developed fraudulent documents, telephone scripts, and aliases in an effort to defraud the victim homeowners. Their scheme lulled victim homeowners into believing that the defendants were part of the legitimate U.S. Government “Home Affordable Modification Program” (HAMP) by using the Department of Treasury’s seal and other government markings. During the execution of the ruse, Ayala and Sanchez used documents containing fraudulent government seals, made statements regarding modification of the victims’ mortgages through the HAMP program, and the victims’ mortgage payments to their own accounts rather than to the victims’ lenders. The scheme defrauded more than 400 victims and caused losses of over $3.8 million dollars and resulted in many victims losing their homes, despite the victims’ efforts to modify their mortgages and continue to make payments on their loans.
"SIGTARP special agents initiation and investigation of this TARP fraud scheme resulted in the arrest and convictions of Joshua Sanchez and Kristen Ayala for stealing money from over 400 desperate homeowners seeking to modify their mortgage by posing as US government representatives for TARP's housing program HAMP” " said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP). "Sanchez and Ayala targeted struggling homeowners, used business names such as “Neighborhood Counseling Services of America” and “Residential Community Outreach Services”, and told victims to send three alleged trial modification payments to them, even going so far as using the Treasury Seal on some of the mortgage payment coupons to convince the homeowners that their scheme was legitimate. Sadly, they scammed hundreds of homeowners into believing they were getting help. They made no homeowner’ payments to mortgage lenders and instead stole over $3.8 million from homeowners who were trying to do the right thing to modify their mortgages causing many to lose their homes and devastating their lives. SIGTARP commends U.S. Attorney Boente and the prosecution team for standing united with SIGTARP against crimes related to TARP.”
Ayala and Sanchez were indicted by a federal grand jury on May 1, 2015, and pleaded guilty on Aug. 3, 2015.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP), made the announcement after sentencing by U.S. District Judge James C. Cacheris.
This case was investigated by SIGTARP. Assistant U.S. Attorneys Zach Terwilliger and James P. Gillis 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-147.
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Former Burlington Coat Factory Employee Admits Tax Evasion on Income Generated from Shell Recruitment CompanyRead the Press Release
CAMDEN, N.J. - A Mt. Laurel, New Jersey, woman today admitted evading taxes on income she generated by using her position as a Burlington Coat Factory vice president to approve payments to her shell recruitment company, U.S. Attorney Paul J. Fishman announced.
Barbara Ames, 53, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging her with one count of tax evasion.
According to documents filed in this case and statements made in court:
In 2007, Barbara Ames was hired by Burlington Coat Factory as Vice President of Talent Acquisition. Ames was responsible for recruiting and hiring all executive management positions within Burlington Coat Factory, including store management, corporate management and field management. As part of her job duties, Ames was responsible for working with vendors and suppliers associated with her position. Burlington Coat Factory used outside companies, or “headhunters,” to identify and recruit qualified applicants for open positions. Ames had sole authority to approve payments to headhunters working on behalf of Burlington Coat Factory.
In 2008, Ames established L. Castillo LLC using her mother’s name and Social Security number. Ames admitted that between 2008 and 2012, she performed headhunting services under the name of L. Castillo on behalf of Burlington Coat Factory. Afterwards, Ames generated invoices from L. Castillo and submitted those invoices to Burlington Coat Factory for payment.
Ames admitted she used her authority at Burlington Coat Factory to approve the L. Castillo invoices. From Aug. 4, 2008 through Nov. 2, 2012, Ames caused Burlington Coat Factory to issue approximately 46 checks, totaling $466,290, to pay L. Castillo invoices. Ames later used these funds for personal expenditures.
Ames admitted that, from 2009 through 2012, she failed to include her income from L. Castillo, which caused a tax loss of $143,877.
The charge to which Ames pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 1, 2016.
U.S. Attorney Fishman credited special agents of the IRS, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel: John O. Poindexter III Esq., Moorestown
Florida Man Pleads Guilty to Fraud Charge Involving Tax SchemeRead the Press Release
St. Louis, MO – ALEXSANDR RABIKOV, a native of Belarus and permanent resident of the United States living in the Ft. Lauderdale, Florida area, pled guilty to charges involving a conspiracy to file false tax returns, which called for refunds, in the name of individuals, which he collected and deposited into accounts he controlled.
According to court documents, the conspiracy hacked into the computer system of a financial institution in the St. Louis area and obtained personal identifying information of individuals employed by that financial institution, including names, social security account information, addresses and wage information. This information was used to prepare false tax returns. All of the false tax returns had refunds due, which he collected and deposited into accounts that Rabikov controlled, either personally or through a network of other individuals throughout Florida, including his girlfriend and co-defendant YULIA BELOMYTTSEVA. Belomyttseva, a Russian national, also pleaded guilty to being part of the conspiracy.
"These defendants thought they figured out a clever scheme to thwart the IRS and steal from American taxpayers," said Andrew M. Thornton, Acting Special Agent in Charge of IRS-Criminal Investigation. "The IRS has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system."
Rabikov pled guilty to one felony count of conspiracy to file fraudulent federal income tax returns before United States District Judge Catherine D. Perry. Sentencing for both Rabikov and Belomyttseva has been set for January 26, 2016. Rabikov and Belomyttseva remain in federal custody, where they have been since their arrest earlier this year.
Rabikov now faces a maximum penalty of five years in prison and/or fines 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 was investigated by IRS-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
Five Individuals Indicted on Federal Drug Charges in Spirit Lake ConspiracyRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced on Oct. 29, 2015, that five individuals from Devils Lake and Fort Totten, North Dakota, face charges of Conspiracy to Possess with Intent to Distribute and Distribution of a Controlled Substance:
Nestor Lopez Jr., 26, Devils Lake
Theresa Rose Lopez, 29, Devils Lake
Winterhawk Leonard Oldrock, 37, Fort Totten
Janet Joyce Oldrock, 34, Fort Totten
Fernando Lopez, 19, Devils Lake
The Indictment alleges that beginning around April 1, 2015, the above individuals knowingly and intentionally possessed with intent to distribute and distributed methamphetamine, a Schedule II controlled substance, in Devils Lake as well as within the Spirit Lake Reservation located in North Dakota.
This case was investigated by the Bureau of Indian Affairs - Fort Totten, the Lake Region Narcotics Task Force, and the North Dakota Bureau of Criminal Investigation.
Assistant U. S. Attorney Brett Shasky is prosecuting the case.
An indictment is merely an accusation and the defendants are presumed innocent unless proven guilty.
Federal Jury Convicts Shoshone Man of Producing Child PornographyRead the Press Release
BOISE – A federal jury in the District of Idaho returned guilty verdicts today against William Roger Wilkinson, 54, on charges that he sexually exploited an eight-year-old child on three occasions by using her to produce sexually explicit images, U.S. Attorney Wendy Olson announced. The jury also found Wilkinson guilty of possessing child pornography and accessing child pornography with intent to view.
According to the evidence presented at trial, the investigation began in May 2013 after an eight-year-old child disclosed that Wilkinson had taken sexually explicit pictures of her. Lincoln County Sheriff’s deputies arrested Wilkinson in May 2013, and searched his home in Shoshone, Idaho. During the investigation, Wilkinson was released on bond, but a warrant was issued for his arrest after the investigation revealed child pornography on a desktop computer taken from his residence. Wilkinson fled his place of work in Twin Falls, Idaho, when deputies attempted to arrest him on November 2, 2013. The United States Marshal’s Service Fugitive Task Force in Salt Lake City, Utah, arrested Wilkinson on November 12, 2013. The FBI obtained a warrant to search the truck Wilkinson had driven to Utah and found a laptop computer and other evidence.
A forensic examiner from the FBI’s Intermountain West Regional Computer Forensics Lab located images on both the desktop computer and the laptop computer depicting Wilkinson and the eight-year-old child engaging in sexually explicit conduct. That evidence showed that on November 3, 2012, on December 9, 2012, and on March 3, 2013, Wilkinson knowingly used, persuaded, or coerced an eight-year-old child to take part in sexually explicit conduct and produced visual depictions of that conduct. Data imbedded in the digital photos showed that they were taken at Wilkinson’s home in Shoshone, Idaho. The evidence further showed that Wilkinson searched for, and viewed, websites containing child pornography on his desktop computer.
“This defendant engaged in horrific conduct with a young child, all for his own sexual gratification,” said Olson. “The jury’s verdict sends the clear message that Idaho citizens will strongly protect our most vulnerable members, children. I commend the outstanding work of Assistant United States Attorneys Justin Whatcott and Josh Hurwitt, FBI Special Agent Mary Martin and the other FBI agents and Lincoln County deputies for their work on this case.”
Sentencing is set for February 8, 2016. Each of the three counts of sexual exploitation of a minor is punishable by at least 15 and up to 30 years imprisonment, a fine of up to $250,000.00, and at least five years up to lifetime of supervised release. The charges of possession of child pornography, and access with intent to view child pornography, each are punishable by up to 20 years imprisonment, a fine of up to $250,000.00, and at least five years up to lifetime of supervised release.
As a result of the convictions, the United States will seek to forfeit $179,000, which represents Wilkinson’s interest in his former home and real property where the child pornography was produced. Proceeds from the forfeiture will be used to provide restitution to the eight-year-old child.
The case was investigated by agents from the Federal Bureau of Investigation in Idaho and Utah, and deputies from the Lincoln County, Idaho, Sheriff’s Department and the United States Marshals Service.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Farmington Woman Sentenced to Prison for Committing Wire Fraud to Facilitate Scheme to Defraud Insurance CompaniesRead the Press Release
ALBUQUERQUE – Michelle Smith, 33, of Farmington, N.M., was sentenced this morning in federal court in Albuquerque, N.M., to 18 months in prison followed by three years of supervised release for committing wire fraud in furtherance of a scheme to defraud insurance companies. Smith also was ordered to pay restitution in the amount of $324,239.00, which represents a portion of the profit she derived from her criminal activity.
Smith was charged in Feb. 2014, in an indictment that included 14 counts of wire fraud and four counts of aggravated identity theft. The charges arose out of Smith’s scheme to defraud Allstate Workplace Division and American Heritage Life Insurance (Allstate) of approximately $324,239.00 in advance commissions by submitting fraudulent policy enrollments. At the time of the offenses charged in the indictment, Smith was employed by Wells Insurance Agencies (Wells), exclusive brokers for Allstate with offices in Farmington, as an insurance agent to sell Allstate insurance policies.
According to the indictment, Allstate paid its brokers a commission for each Allstate insurance policy the broker sold. When Allstate received a new policy enrollment, Allstate paid the broker an advance commission amounting to a percentage of six months’ work of premiums on the policy. If the enrollee canceled the policy or fails to pay premiums for six months, the broker was required to return the advance commission to Allstate. When Smith was employed by Wells, Wells paid Smith 70% of the advance commissions she generated by submitting Allstate insurance policy enrollments.
The indictment alleged that from Aug. 2009 through May 2010, Smith devised and engaged in a scheme to defraud Allstate and Wells by submitting fraudulent policy enrollments and obtaining advance commissions to which she was not entitled. During the ten month period, Smith submitted enrollments in the names of approximately 150 different enrollees for a total of approximately 505 Allstate insurance policy enrollments. The enrollment forms transmitted electronically to Allstate by Smith were in the names of individuals who had not purchased insurance from Allstate and had forged signatures.
On April 23, 2015, Smith pled guilty to Count 13, a wire fraud charge, of the Indictment and admitted that between Nov. 2009 and April 2010, she devised a scheme to fraudulently obtain advance commission payments from Allstate and Wells. She further admitted facilitating the scheme by submitting 505 insurance policy enrollments to Allstate, all of which were fraudulent because none of the persons listed on the enrollment forms had agreed to purchase insurance policies from Allstate. Smith acknowledged that as a result of her fraudulent scheme, Allstate issued approximately $324,239.00 in advance commission payments and that she personally received at least $128,371.00 of those payments.
This case was investigated by the Farmington office of the FBI and was prosecuted by Assistant U.S. Attorney Jeremy Peña.
Farmer Sentenced for Poisoning Bald EaglesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Kirk Canfield, 54, of Wilson, NY, who was convicted of a violation of violation of the Bald and Gold Eagle Protection Act, was sentenced to six months probation and a $1,000 criminal fine by U.S. Magistrate Judge Hugh B. Scott. The defendant was also ordered to pay $3,000 in restitution to the New York State Department of Environmental Conservation, Bald Eagle Program.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that the defendant operated a produce farm in the Town of Wilson. In August 2014, Canfield placed a meat pile that had been mixed with Golden Malrin fly bait at the edge of a cornfield on his farm in an attempt to kill coyotes. The fly bait contained Methomyl, which is an insecticide that is not to be used in a manner in which animals can eat it.
Three juvenile bald eagles died after eating the contaminated meat pile, and on August 22, 2014, the three dead bald eagles were found and photographed in the immediate vicinity of the contaminated meat pile by an individual riding an ATV. Subsequently, Canfield removed the three dead bald eagles from the field and removed the contaminated meat pile. By placing the contaminated meat pile on his field, the defendant acted with wanton disregard for the consequences of his act.
As part of the sentence in this case, Canfield has been ordered to pay restitution to the New York State Department of Environmental Conservation (NYS-DEC), Bald Eagle Program. The program is responsible for returning bald eagles to New York State and establishing a successful agenda to restore and protect New York State’s bald eagles. In the early 1900’s, New York State was home to more than 70 nesting pairs of bald eagles, and was a wintering ground for several hundred more. However, by 1960, New York State had only one known active bald eagle nest remaining. Beginning in 1976, and continuing until 1988, the NYS-DEC Bald Eagle Program collected 198 nestling bald eagles from other parts of the United States, brought them to New York State, and then hand-reared them to independence. Today, there are more than 170 nesting pairs of bald eagles in the state.
The sentencing is the result of an investigation by Special Agents of the U.S. Fish & Wildlife Service, under the direction of Special Agent in Charge Honora Gordon and Environmental Conservation Officers with the New York State Department of Environmental Conservation, under the direction of Captain Frank Lauricella.Elm City Man Sentenced to 17 Years for Drug Trafficking & Weapon OffensesRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, Chief United States District Judge James C. Dever III sentenced TERRANCE LAMAR CARR, a/k/a Lil Bud, 23, of Elm City, North Carolina to 204 months imprisonment, followed by 5 years of supervised release.
CARR was named in a three-count Indictment filed on March 24, 2015 charging him with conspiracy to distribute and possess with the intent to distribute 280 grams or more of cocaine base (crack); possession with the intent to distribute a quantity of marijuana and a quantity of cocaine base (crack); and possession of a firearm in furtherance of a drug trafficking crime.
On June 2, 2015, CARR pleaded guilty to conspiracy to distribute and possess with the intent to distribute 280 grams or more of cocaine base (crack) and possession of a firearm in furtherance of a drug trafficking crime.
CARR was associated with a narcotics distribution organization led by Tavaris Delino Battle, previously sentenced to life imprisonment. According to the investigation, CARR was involved with drug trafficking in Wilson, Edgecombe, and Nash counties from 2008 until his federal arrest on March 27, 2015. Throughout the investigation, a number of controlled purchases from CARR were conducted. Additionally, a number of traffic stops were affected on CARR during the investigation, which resulted in the seizure of controlled substances and large quantities of U.S. currency. Based on the investigation, CARR is accountable for the distribution of over 730 grams of cocaine base (crack). CARR also possessed and distributed powder cocaine and marijuana throughout the conspiracy. CARR possessed a firearm, which had a scratched serial number, in furtherance of his drug trafficking activities.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, Rocky Mount Police Department, Sharpsburg Police Department, Edgecombe County Sheriff’s Office, Nash County Sheriff’s Office, Wilson County Sheriff’s Office, and Wilson Police Department. Assistant United States Attorney Dena J. King represented the government.
Dunstable Real Estate Attorney Convicted in Mortgage Fraud ConspiracyRead the Press Release
BOSTON – A real estate attorney pleaded guilty today to participating in a far-reaching scheme to defraud banks and mortgage companies as part of a conspiracy involving sham “short” sales of numerous residential properties in the Merrimack Valley of Massachusetts.
Hyacinth Bellerose, 50, of Dunstable, Mass., pleaded guilty to one count of conspiracy to commit bank fraud. U.S. District Court Judge Rya W. Zobel scheduled sentencing for Feb. 4, 2016.
Bellerose colluded with others – including a Methuen loan officer and a Haverhill real estate agent who were not identified in the charging document – to defraud various banks through the use of bogus short sales of homes in Haverhill, Lawrence and Methuen. A short sale is a sale of real estate for less than the value of any mortgage debt on the property. Short sales are an alternative to foreclosure that typically occur only with the consent of the mortgage lender, and that generally result in the lender absorbing a loss on the loan and releasing the borrower from the unpaid balance. By nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt. In this case, Bellerose colluded with others to feign a short sale and thereby defraud banks of the full value of the mortgage.
The conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath. Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater,” with their homes worth less than the mortgage debt they owed. As part of the scheme, Bellerose and her co-conspirators submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales – and thereby to release the purported sellers from their unpaid mortgage debts – while simultaneously inducing the purported buyers’ banks to provide financing for the deals. In fact, the purported sellers simply stayed in the homes with their debt substantially reduced while Bellerose and others made money from the transactions fees associated with the fake sales. In some cases, the conspirators then re-sold the properties in genuine arms-length transactions for a profit.
As part of the conspiracy:
- The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties, when in fact, the transactions were not arms-length, and the sellers retained control of (and frequently continued to live in) the properties after the sale. In some cases, the purported third-party buyers were actually the spouses, parents or children of the purported sellers.
- The conspirators submitted phony earnings statements in support of numerous loan applications that they submitted to banks on behalf of purported buyers, in order to obtain financing for the purported sales.
- The conspirators submitted phony HUD-1 Settlement Statements to banks, as well as to the Federal Housing Administration, that did not accurately reflect the disbursement of funds in the transactions. (A HUD-1 Settlement Statement is a standard form, developed by the U.S. Department of Housing and Urban Development, that is used to document the flow of funds in real estate transactions. HUD-1 Settlement Statements are required for all transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.)
For example, in one transaction, the unnamed loan officer and the loan officer’s spouse signed two purchase and sale agreements, dated five days apart, in which they purported to agree to the sale of their Methuen home to a third party. In the first agreement, they purported to sell the property for $299,000. In the second, they purported to sell the property for $289,000.
The first agreement was provided to Chase Home Finance LLC, a subsidiary of J.P. Morgan Chase Bank, N.A., which held the first mortgage on the home, and also affirmed that they were unrelated and that there was no agreement that would allow the sellers to remain in the property after the sale. In fact, the purported buyer was the mother of one of the purported sellers, who intended to remain in the property after the purported sale.
To facilitate the transaction, the conspirators submitted to Bank of America a loan application on behalf of the purported buyer that falsely represented her employment status, and was accompanied by phony earnings statements. The conspirators also submitted to Bank of America the second purchase and sale agreement, reflecting the higher purported sale price of $299,000.
In connection with the purported sale, Bellerose prepared two HUD-1 Settlement Statements. One Settlement Statement was provided to Chase as the short-selling bank, and reflected a purported sale price of $289,000, and a purported buyer deposit of $15,216. The other Settlement Statement, which was provided to Bank of America and the FHA, reflected a purported sale price of $299,000, and a purported buyer deposit of $14,916. In fact, the purported buyer did not make any down payment toward the sale, which was financed entirely by the mortgage loan from Bank of America.
The charge of conspiracy to commit bank fraud provides for a sentence of no greater than 30 years in prison, three years of supervised release and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development , Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, the Special Inspector General for the Troubled Asset Relief Program, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Ortiz’s Economic Crimes Unit.
Dulce Man Sentenced to Prison for Failing to Update His Sex Offender RegistrationRead the Press Release
ALBUQUERQUE – McQuade Quintana, 29, of Dulce, N.M., was sentenced today in federal court in Albuquerque, N.M., to 22 months in prison followed by three years of supervised release for violating the Sex Offender Registration and Notification Act (SORNA). Quintana will also be required to register as a sex offender following his term of incarceration. The sentence was announced by U.S. Attorney Damon P. Martinez and U.S. Marshall Conrad E. Candelaria.
SORNA, also known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register in each jurisdiction where the offender resides, where the offender is employed, or where the offender is a student, and that the sex offender maintain current registrations.
Quintana was arrested on Nov. 25, 2014, on a criminal complaint charging him with violating SORNA by failing to update his sex offender registration. On Dec. 16, 2014, Quintana was indicted for failing to update his registration between Oct. 10, 2014 and Nov. 25, 2014, in Bernalillo County, N.M.
According to court filings, Quintana was convicted of aggravated sexual abuse of a child in Jan. 2006. On Sept 30, 2010, Quintana registered as a sex offender in Bernalillo County and agreed to notify the sheriff of the county to which he moved if he relocated outside of the county. Quintana last registered as a sex offender on March 16, 2011, in Rio Arriba County, and subsequently failed to notify the New Mexico Department of Public Safety or the Bernalillo County Sheriff’s Office that he had moved or to update his sex offender registration as required by SORNA.
On June 18, 2015, Quintana pled guilty to a felony information and admitted that between Oct. 10, 2014 and Nov. 25, 2014, he failed to register as a sex offender in Bernalillo County. Quintana also admitted that on Sept. 5, 2014, he was approved to reside at a residential reentry program in Albuquerque by the U.S. Probation Office and that he left the program without permission on Oct. 10, 2014.
This case was investigated by the U.S. Marshals Service and was prosecuted by Assistant U.S. Attorney Kyle T. Nayback 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.
Defendant Sentenced on Multiple Federal Charges in Connection with Purchase and Export of Luxury Vehicles to ChinaRead the Press Release
Acting United States Attorney Gregory J. Haanstad of the United States Attorney’s Office for the Eastern District of Wisconsin announced that, on October 27, 2015, Defendant Mao Peng (age: 26) of Shorewood, Wisconsin, was sentenced to 27 months in federal prison and ordered to pay $517,265.72 in restitution by United States District Court Judge J.P. Stadtmueller.
Peng had previously been charged by criminal information with, and had pleaded guilty to, three federal felony offenses: conspiracy to engage in wire fraud, conspiracy to engage in identity theft, and conspiracy to misuse of the United States’ Automated Export System to further criminal activity.
According to the information and plea agreement, Peng had conspired to defraud the State of Wisconsin of state and local sales tax revenue in connection with the purchase of luxury vehicles, which Peng and his company Longen Trading intended to export to China, by fraudulently using Native American straw buyers to make those purchases in a tax-exempt manner. Specifically, Peng and Longen Trading used straw buyers in connection with the purchase of approximately 154 luxury vehicle purchase transactions, having a total purchase price of approximately $9,132,106.94, and thereby evaded Longen Trading’s payment of a total of approximately $515,964.04 in state and local sales taxes that Longen Trading was legally obligated to pay in connection with the purchase of those vehicles.
According to the information and a plea agreement, Peng and Longen Trading also conspired to cause luxury vehicles to be purchased for export, via identity theft, that is, by using means of identification that belonged to a past or prospective straw buyer, without that person’s permission to purchase the vehicle using his or her identity. Specifically, between in or about June 2012 and June 2014, Peng and Longen Trading conspired with others to purchase approximately 71 luxury vehicles, having a total purchase price of approximately $4,212,945.06, using a means of identification belonging to another person, without that person’s knowledge or permission.
According to the information and a plea agreement, between approximately June 2012 and June 2014, Peng and Longen Trading also conspired with others to use the Department of Commerce’s Automated Export System (“AES”) to further these illegal activities, in violation of 13 U.S.C. § 305(a)(2).
As a part of his plea agreement, Peng also agreed to the civil forfeiture of approximately $1.2 million in funds seized from various bank accounts he controlled as well as 29 new luxury vehicles, including new Porsche, Mercedes Benz, and BMW vehicles.
Following the sentencing, Acting United States Attorney Gregory J. Haanstad stated: “As this case reflects, the United States Attorney’s Office and the United States Department of Justice are committed to aggressively combatting both identity theft and tax evasion, in whatever form that tax evasion conduct might take. We are also committed to taking the profit out of crime and to obtaining just financial outcomes in our criminal cases through the judicious use of both asset forfeiture and restitution remedies.”
Haanstad commended the investigative work that the United States Secret Service and United States Department of Commerce, Bureau of Industry & Security, Office of Export Enforcement conducted in this matter, along with the investigative assistance provided by the following state and local law enforcement agencies: the Wisconsin Department of Criminal Investigations, the Wisconsin Department of Transportation Investigations, the Milwaukee Police Department, the Oneida Police Department, the Menomonee Police Department, the Stockbridge-Munsee Police Department, the Kenosha Police Department, the Wauwatosa Police Department, the Waukesha Police Department, the Glendale Police Department, the Green Bay Police Department, the Milwaukee Secret Service Financial Crimes Task Force, and the Native American Drug and Gun Initiative Task Force.
Dan Clutch, Special Agent in Charge of the U.S. Department of Commerce, Bureau of Industry & Security, Office of Export Enforcement, Chicago Field Office, stated: “This sentencing sends a strong message to those who criminally misuse the Automated Export System to further illegal activity. This case is the result of outstanding collaborative investigative work between federal, state, local, and tribal law enforcement agencies.”
This case was prosecuted by Assistant United States Attorney Scott J. Campbell.
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Defendant Gets 84 Months in Federal Prison for Using Personal Identifiers of Deceased Individuals to File Fraudulent Tax ReturnsRead the Press Release
SALT LAKE CITY – Moussa Sleiman Bitar, aka Justizego, age 36, a naturalized U.S. citizen who is also a citizen of Lebanon, will serve 84 months in federal prison after pleading guilty to wire fraud, aggravated identity theft, and false claims as a part of a scheme to use the personal identifiers of deceased individuals to file fraudulent tax returns.
U.S. District Court Judge David Nuffer also ordered Bitar to pay $843,561 in restitution and placed him on supervised release for 60 months following his prison sentence. The case against Bitar, investigated by special agents of IRS Criminal Investigation, the FBI, the U.S. Marshal’s Service, and the West Valley City Police Department, was unsealed at sentencing in U.S. District Court in Salt Lake City last week.
Bitar admitted that from about January 2013 until about July 2013, he obtained the names, addresses, social security numbers, and other personal identifiers of deceased individuals and used the information to file false and fraudulent tax returns. Based on these fraudulent tax returns, the IRS sent refunds to bank accounts under Bitar’s control and the control of other individuals working with him. Once the funds arrived, Bitar would withdraw the funds or have others working with him withdraw the funds or transfer the funds to him. Funds were moved through banks in Utah. Prosecutors believe Bitar operated the scheme from Lebanon and other countries using individuals in Utah and other locations.
According to court documents, on Jan. 22, 2013, Bitar transmitted an email with attachments containing personal identifiers of deceased individuals to be used to file a fraudulent tax return, including personal identifiers of L.T., a deceased individual. On about April 4, 2013, he caused a fraudulent 1040 tax return, in the name of L.T., to be filed with the IRS claiming a tax return in the amount of $1,004, which he received. The scheme was in violation of federal wire fraud, aggravated identity theft, and false claims laws.
“This significant federal prison sentence is appropriate for the egregious conduct committed by Mr. Bitar. Using the personal identifiers of deceased individuals to steal money from American taxpayers is graphic example of the continued willingness of identity thieves to do whatever they can to obtain money or property that doesn’t belong to them,” U.S. Attorney John W. Huber said today. “We recognize the outstanding work of the law enforcement agencies involved in this complex investigation.”
"Investigating refund fraud and identity theft is a priority for IRS Criminal Investigation," said John G. Collins, Special Agent in Charge of IRS Criminal Investigation in Utah. "Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers and their families, especially those who have lost loved ones. This sentence should serve as a strong warning to those who are considering similar conduct. Law enforcement is serious about investigating these crimes and holding those who defraud the government accountable."
Bitar was charged in a federal indictment returned in June 18, 2014. He was arrested in the Canary Islands on June 26, 2014, on a request from the United States for a provisional arrest. A superseding indictment was returned on July 2, 2014. Bitar was turned over to U.S. Marshals custody after extradition proceedings, which he waived, and he was transported to the United States.
As a part of the plea agreement reached with Bitar in Utah, the U.S. Attorney’s Office for the District of Colorado will move to dismiss its indictment against Bitar as well as a supervised release violation. The U.S. Attorney’s Office in the Eastern District of Michigan also has agreed not to seek an indictment against Bitar for a similar fraud scheme, however, Bitar was ordered to pay restitution for claims made in Michigan.
Date Rape Drug Distributor Pleads GuiltyRead the Press Release
Montgomery, Alabama - Stephen K. Howard, 64 of Auburn, Alabama, pleaded guilty today to three counts of possession with intent to distribute a controlled substance analogue (1-4 butanediol) and one count of possession of methamphetamine, announced George L. Beck, Jr., United States Attorney for the Middle District of Alabama. When ingested, 1-4 butanediol has the same effect on the body as gamma-hydroxybutric acid (GHB), commonly known as the “date rape” drug.
Evidence uncovered during the investigation indicated that Howard unlawfully used his position as a lab technician at Auburn University to order the butanediol, or date rape drug, from the manufacturer. Howard then sold the date rape drug to an undercover officer on two occasions and stored large amounts of the drug in his Auburn residence. Howard denies that he personally distributed any butanediol to Auburn University students.
"Those who take advantage of young girls by doping them unconscious are disgusting and repulsive,” stated U.S. Attorney George L. Beck, Jr. “Rape by force or mental incapacity is a serious crime that warrants harsh prosecution. Those who make or sell drugs used to rape by mental incapacity are equally as guilty."
Auburn Police Captain Will Mathews praised the efforts of the coordination of local, state, and federal law enforcement agencies to bring this case to conclusion. “This was a case in which a person was poisoning our community with illicit chemicals. The Auburn Police Division solicited assistance from ALEA, FBI, DEA, and the U.S. Attorney’s Office to bring this criminal to answer for his crime. It was very successful.”
“State Bureau of Investigation Narcotics Agents worked closely with our federal and local partners during the course of this investigation,” said Secretary of Law Enforcement Spencer Collier. “We will continue to collaborate with these law enforcement agencies as we combat the unlawful production and distribution of illegal drugs in Alabama.”
“Those who profit from the victimization of innocent people should take notice of this case and know that law enforcement will not tolerate or sit idly while they engage in cowardly conduct and predatory behavior,” stated Robert F. Lasky, Special Agent in Charge of FBI, Mobile Field Division.
“The cooperation experienced in this case was extraordinary and shows what can be accomplished through teamwork,” stated Assistant Special Agent in Charge, Clay Morris. “This teamwork took a seller of a date rape drug, a predator, off the street. We at DEA are committed to continuing the efforts to keep our streets safe from this type predator.”
For the date rape drug, Howard could be imprisoned for up to 20 years, receive a fine of $1,000,000, and serve a term of supervised release at least 3 years. For the methamphetamine, Howard could face imprisonment of up to 1 year and a minimum fine of $1,000.00.
This case is being investigated by the Auburn Police Department, the Alabama Law Enforcement Agency, the Federal Bureau of Investigation and the Drug Enforcement Administration. This case is being prosecuted by Assistant United States Attorneys Verne Speirs and Jonathan Ross.
Convicted Sex Offender Charged with Distribution and Possession of Child PornographyRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that a federal grand jury has returned an indictment charging ANTHONY T. KURTZ, age 40, of Livingston, Louisiana, with distribution of child pornography, possession of child pornography, and forfeiture.
According to the Indictment, KURTZ possessed child pornography which contained images of pre-pubescent minors and minors who were under 12 years of age. Both the child pornography that KURTZ distributed and possessed had been transported using means and facility of interstate and foreign commerce. The indictment further alleges that offenses were committed after KURTZ had previously been convicted of sexual assault and indecent assault in the State of Pennsylvania.
U.S. Attorney Walt Green stated: “Children victimized during the production of child pornography are re-victimized every time these images are distributed and viewed on the internet. This office will continue to protect society’s most vulnerable citizens by vigorously prosecuting any individuals who distribute and possess images of children being sexually abused.”
“Individuals who distribute child pornography further injure innocent victims each time these illegal images are distributed more widely online,” said Raymond R. Parmer Jr., Special Agent-in-Charge of the U.S. Department of Homeland Security, Homeland Security Investigations (HIS) New Orleans. “Child sex abuse is one of the most serious crimes HSI investigates due to the lasting psychological and physical damage it can inflict on victims, and as such it will continue to be one of the agency’s highest priorities.”
This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana, the U.S. Department of Homeland Security, Homeland Security Investigations, and the Louisiana Attorney General’s Office – Cyber Crime Unit.
This matter is being prosecuted by Assistant U.S. Attorney Ryan R. Crosswell.
NOTE: An indictment is an accusation by the Grand Jury. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Chelsea Man Sentenced for Fraud and Aggravated Identity TheftRead the Press Release
BOSTON – A Chelsea resident was sentenced today in U.S. District Court in Boston in connection with stealing the identity of an American armed services veteran.
Noe Arturo Castillo, 43, of Chelsea, was sentenced today by U.S. District Court Judge William G. Young to 24 months in prison and ordered to pay $21,082 to the federal government. In July 2015, Castillo pleaded guilty to aggravated identity theft, wire fraud, passport fraud, theft of public money, and misuse of a Social Security number.
Castillo, who is presently a legal permanent resident of the United States but originally from Guatemala, unlawfully entered the United States in 1994, at which time he obtained a driver’s license and Social Security card in the identity of an American citizen who served in the armed forces. In 2005, Castillo applied for a U.S. passport in the victim’s identity. Castillo then secured a job using the victim’s identity and had his paycheck directly deposited into a bank account using the victim’s identity. Castillo was later terminated from the job and began collecting unemployment benefits in the victim’s identity, to which he was not entitled.
United States Attorney Carmen M. Ortiz; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; Cheryl Garcia, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The case was investigated by the Homeland Security Investigations Document and Benefit Fraud Task Force. The case was prosecuted by Assistant U.S. Attorney Carlos A. López and Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Criminal Division.
Cheektowaga Man Pleads Guilty to ExtortionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Eric Battistoni, 72, of Cheektowaga, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to conspiring to use and using extortionate means to collect an extension of credit. The charges each carry a maximum penalty of 20 years in prison and a $250,000 fine.Assistant U.S. Attorney Anthony M. Bruce, who is handling the case, stated that Battistoni was hired by his co-defendant, Thi Nguyen, to help Nguyen collect a $24,000 bookmaking debt. The debt belonged to an individual who placed bets with Nguyen during the 2012 NFL season. During the course of several meetings with Nguyen’s bookmaking customer in April and May of 2013, Battistoni threatened to harm the customer if the customer failed to make timely payments on the $24,000 debt.
Nguyen has been convicted and will be sentenced on December 4, 2015.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Adam S. Cohen and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid.
Sentencing is scheduled for February 16, 2106 at 1:00 pm before Judge Arcara
Charleston man sentenced by Federal court for distribution of heroinRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Matthew Watts, II, 31, of Charleston, West Virginia, was sentenced in federal court in Charleston to three years of supervised probation for distribution of heroin. As a condition of the probation, Watts is required to serve eight months on home confinement, perform 400 hours of public service, and participate in an AA program.
Watts pleaded guilty to distributing heroin on July 30, 2015, in federal court in Charleston. Watts admitted that on September 17, 2014, he sold heroin to a confidential informant working with law enforcement authorities. The drug deal took place in Charleston at the 7-Eleven parking lot located on Washington Street, West.
The investigation was conducted by the Kanawha County Sheriff’s Department. Assistant United States Attorney Timothy D. Boggess handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Carrollton, Texas, Man Sentenced to 84 Months in Federal Prison on Child Porn ConvictionRead the Press Release
DALLAS — A Carrollton, Texas, man, Jordan Michael Porter, 29, was sentenced this week by U.S. District Judge Sam A. Lindsay to 84 months in federal prison, following his guilty plea in February 2015 to one count of receipt of child pornography, announced U.S. Attorney John Parker of the Northern District of Texas.
Porter has been in custody since his arrest in July 2014 on a related federal indictment.
According to documents filed in the case, the investigation began when a parent found a photo of their 15-year-old minor female child kissing what looked to be a much older man. When questioned by the parent, the minor admitted she had met then 28-year-old Porter online a few weeks earlier. The parent notified the Garland Police Department.
The investigation revealed that the minor female had communicated with Porter via text, email and phone calls. They had video-chatted and had met on previous occasions and engaged in sexual activity.
An undercover officer took over the minor’s online account and in subsequent chats with Porter, they agreed to meet, at the usual place, on July 2, 2014. Porter was arrested when he arrived at the location.
Porter admitted he knew the girl was age 15. He admitted she sent lewd and lascivious photos of her partially clothed in a bathrobe, and that on three of the four occasions they met, they had engaged in sexual activity.
The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI and the Garland Police Department investigated. Assistant U.S. Attorney Camille Sparks prosecuted the case.
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Carlsbad Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Gary Nicholas Allen, 30, of Carlsbad, N.M., pleaded guilty today in federal court in Las Cruces, N.M., to a methamphetamine trafficking charge under a plea agreement with the U.S. Attorney’s Office.
Allen was arrested on June 23, 2015, on a criminal complaint alleging that he possessed methamphetamine with intent to distribute in Eddy County, N.M., on April 8, 2015. According to the complaint, Pecos Valley Drug Task Force agents executed a search warrant at a residence in Carlsbad where they seized $3,284.00 in cash, approximately 40 gross grams of methamphetamine, a loaded semi-automatic firearm, and drug paraphernalia.
Allen was subsequently indicted on Sept. 16, 2015, and charged with possession of methamphetamine with intent to distribute on April 8, 2015, in Eddy County.
During today’s proceedings, Allen pled guilty to the indictment and admitted that on April 8, 2015, he possessed approximately 33 grams of methamphetamine which he planned to distribute to others. Allen further admitted that a loaded semi-automatic firearm was also found in his residence.
At sentencing, Allen faces a statutory maximum of 20 years in federal prison followed by not less than three years of supervised release. He remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the DEA and the Pecos Valley Drug Task Force. Assistant U.S. Attorney Mark A. Saltman of the U.S. Attorney’s Las Cruces Branch Office is prosecuting this case.
The Pecos Valley Drug Task Force is comprised of officers from the Eddy County Sheriff’s Office, Carlsbad Police Department and Artesia Police Department and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Carlisle Man Federally Indicted for Bank Robberies and Firearms ViolationsRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Jeffrey Turns, age 32, of Carlisle, Pennsylvania was indicted yesterday by a federal grand jury in Harrisburg, Pennsylvania. The indictment charges Turns with bank robbery and use of a firearm during a crime of violence.
According to United States Attorney Peter Smith, the Indictment alleges that Turns robbed two banks in August 2015, one in Mechanicsburg, PA and one in Dillsburg, PA, using a firearm. Turns was apprehended after the second bank robbery through a cooperative effort by the Upper Allen Township, Camp Hill and Lower Allen Township Police Departments, and the Pennsylvania State Police. When taken into custody, Turns was allegedly fleeing in a stolen car with one firearm in his waistband, and nine additional stolen firearms in the back of the car.
This case is being investigated by the Federal Bureau of Investigation, the Mechanicsburg and Carroll Township Police Departments and is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Buffalo Man Convicted of Conspiracy to Distribute Crack CocaineRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Tommy Eugene Clark, aka Boo, 28, of Buffalo NY, who was convicted of conspiracy to possess with intent to distribute and to distribute crack cocaine, was sentenced to 58 months in prison by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney Mary Catherine Baumgarten, who handled the case, stated that the charge stems from an investigation into the trafficking of cocaine base and cocaine from the Cleveland, Ohio area into Western New York, and the distribution of those drugs in North Tonawanda, Niagara Falls, Lockport, and Buffalo.
Co-defendants Nathaniel Clark and Raysean Clark have been convicted and are awaiting sentencing. Co-defendant Kayla Combs was sentenced to 30 months in prison.
The sentencing is the culmination of an investigation on the part of Task Force Agents and Special Agents of the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division, in conjunction with the Niagara County Sheriff's Department and Niagara County Drug Task Force, under the direction of Sheriff James Voutour, and the North Tonawanda Police Department, under the direction of Chief William Hall.
Brockton Armed Career Criminal Receives 15 Years in Federal Firearms CaseRead the Press Release
BOSTON – A Brockton man was sentenced in U.S. District Court in Boston yesterday in connection with his possession of a firearm and ammunition.
Foster L. Starks, Jr., 54, was sentenced by U.S. District Court Judge Leo T. Sorokin to 15 years in prison and three years of supervised release. The sentence imposed was largely a product of Starks’s lengthy criminal history. Beginning in 1989, Starks has been convicted of nine armed robberies, two unarmed robberies, one armed robbery while masked, and two armed robberies with intent to rob. Based on this history, Starks qualified as an armed career criminal and therefore is subject to a minimum mandatory sentence of 15 years in prison.
In September 2015, Starks was convicted of being a felon in possession of a firearm and ammunition following a week-long jury trial. Trial evidence revealed that on May 24, 2009, at 11:05 p.m., Starks was stopped by a Massachusetts State Police Trooper for a marked lanes violation while driving on Route 24 North in Raynham. Starks was arrested after the Trooper discovered that he was driving with a suspended license. While performing a search of the car, the Trooper found a shopping bag on the front passenger seat containing a .45 caliber handgun loaded with seven bullets. The shopping bag also contained two boxes of additional ammunition and four bottles containing prescription medications. Starks’s prior convictions prohibited him from possessing a firearm or ammunition.
United States Attorney Carmen M. Ortiz and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement. The case was prosecuted by Assistant United States Attorneys David G. Tobin and Jordi de Llano of Ortiz’s Major Crimes Unit.
Bozeman Man Sentenced in Missoula to Seven Years in Prison for Receipt of Child PornRead the Press Release
MISSOULA – Anthony Dane Roberty, 54, of Bozeman, Montana, was sentenced today to 84 months incarceration followed by 15 years supervised release, for receipt of child pornography. Chief U.S. District Court Judge Dana Christensen sentenced Roberty following a July 16, 2015, hearing held before U.S. Magistrate Jeremiah Lynch, in which Roberty pleaded guilty to the offense. The sentence will run concurrently with state sentences Roberty is serving for felony DUI.
In an Offer of Proof filed by Montana Assistant U.S. Attorney Cyndee Peterson, the government stated that if the case had proceeded to trial, the government would have proven that in March 2014, an FBI agent downloaded files depicting child pornography as part of an online investigation to identify individuals trafficking in child pornography using BitTorrent. The IP address for the downloaded files was connected to Roberty’s residence. The agent obtained a search warrant and conducted a search of Roberty’s residence in September of 2014. Roberty was interviewed on the day of the search and admitted he used BitTorrent and that agents would find child pornography on his computer and an external hard drive.
A computer and portable hard drive seized from Roberty’s residence were found to contain child pornography. A forensic examiner determined that the computer contained BitTorrent client software and had been used to send and receive files using BitTorrent. The examiner discovered numerous graphics depicting children engaged in sexually explicit conduct, including sexual conduct between children and adults. The examiner also found video files that depicted child pornography. The files were created between February and April of 2014.
“Once again, our partnerships with state and federal law enforcement agencies have given us the resources to track down consumers and distributors of child porn,” said Montana U.S. Attorney Mike Cotter. “By working together under the Department’s Project Safe Childhood Initiative, we help keep children from being victimized by these types of predatory criminals.” David A. Thompson, Special Agent in Charge of Homeland Security Investigations in Denver stated: “this significant prison sentence reflects the serious criminal nature of child exploitation, and the resulting permanent trauma inflicted on its young and helpless victims. Our HSI special agents are trained to identify, investigate and pursue prosecution against these child predators, and rescue their victims – and we take that responsibility very seriously.”
This case was initiated under the Department of Justice’s Project Safe Childhood initiative, which was launched in 2006 to combat the proliferation of technology-facilitated crimes involving the sexual exploitation of children. Through a network of federal, state and local law enforcement agencies and advocacy organizations, Project Safe Childhood attempts to protect children by investigating and prosecuting offenders involved in child sexual exploitation. It is implemented through partnerships including the Montana Internet Crimes Against Children (ICAC) Task Force. The ICAC Task Force Program was created to assist state and local law enforcement agencies by enhancing their investigative response to technology facilitated crimes against children. Investigative agencies involved in the case included the FBI, Homeland Security Investigations, the Montana Division of Criminal Investigation and the Bozeman Police Department. Assistant United States Attorney Cyndee Peterson prosecuted this case.
Bolingbrook Man Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
CHICAGO — A Bolingbrook man pleaded guilty today to a federal charge that he attempted to travel overseas to join a foreign terrorist organization in Syria.
MOHAMMED HAMZAH KHAN, 20, pleaded guilty to one count of attempting to provide material support to a foreign terrorist organization. The organization is identified in a written plea agreement as the Islamic State of Iraq and the Levant (“ISIL”).
Khan, a U.S. citizen from southwest suburban Bolingbrook, faces a maximum sentence of 15 years in prison. U.S. District Judge John J. Tharp Jr. did not immediately schedule a sentencing hearing. A status hearing was set for Dec. 3, 2015, at 11:30 a.m.
Khan has been detained in federal custody since he was arrested on Oct. 4, 2014, at O’Hare International Airport by members of the Chicago Joint Terrorism Task Force.
Beginning no later than approximately February 2014, Khan used the Internet to obtain introductions to ISIL members in Syria and to assist him with traveling there to join the terrorist group, according to the plea agreement. Khan spoke with ISIL members to coordinate the logistics of his admission into ISIL-controlled territory, the plea agreement states.
Khan admitted in the plea agreement that he knew ISIL had been designated by the United States as a foreign terrorist organization. Upon arriving in Syria, according to the plea agreement, Khan intended to work under the direction and control of ISIL, and be required to take any assignment ISIL gave him.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John P. Carlin, Assistant Attorney General for National Security; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The Joint Terrorism Task Force is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), and the Illinois State Police also provided significant assistance in the investigation.
The government is represented by Assistant United States Attorneys Matt Hiller, Angel Krull and Sean Driscoll; and U.S. Department of Justice Trial Attorney Michael Dittoe of the National Security Division.
Plea Agreement
Behavioral Health Services Provider Agrees to Pay $1 Million for Allegedly Submitting False Claims to Federal Health Care ProgramsRead the Press Release
NEWARK, N.J. – Vericare Management Inc., a behavioral health services provider, agreed today to pay more than $1 million to resolve allegations that it violated the False Claims Act by falsely billing federal health care programs for services that were not medically necessary, U.S. Attorney Paul J. Fishman announced.
Vericare, which is headquartered in San Diego, California, provides psychiatric and psychological services focused on geriatric patients in long-term care and skilled nursing facilities in New Jersey, California, and Texas, among other states.
According to the contentions of the United States contained in the settlement agreement:
From Jan. 1, 2012, through Dec. 31, 2014, Vericare sought and obtained “standing orders” or other agreements with 128 facilities under which Vericare’s clinicians performed evaluations on all new admissions to the facility. These evaluations were conducted regardless of whether a physician provided a patient-specific order indicating that such an evaluation was medically necessary. Vericare improperly submitted claims to the United States pursuant to these standing orders or other agreements for diagnostic interviews, evaluations, and examinations.
These allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.
The settlement also resolves allegations that Vericare incorrectly submitted claims to Medicare for certain nursing facility evaluation and management services which were not supported by the patient’s medical record. This component of the settlement resulted from Vericare’s self-disclosure of this issue to the U.S. Attorney’s Office. As a result of Vericare’s decision to self-disclose this issue, the company was required to pay significantly less than the treble damages and penalties that the United States may seek under the False Claims Act.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s settlement.
The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $640 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The qui tam case is captioned United States ex rel. Bart Rossi v. Vericare, Civil Action No. 13-6884 (D.N.J.).
Defense counsel for Vericare:
Michael Kendall Esq., Boston, Massachusetts
Counsel for relator:
Lisa M. Fittipaldi Esq., Warren, New Jersey