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20 October 2015
Dixon Man Sentenced to over 3 Years in Prison for Mortgage FraudRead the Press Release
SACRAMENTO, Calif. — Hubert Rotteveel, 52, of Dixon, was sentenced today by Senior United States District William B. Shubb to three years and four months in prison for one count of mail fraud, United States Attorney Benjamin B. Wagner announced.
In September 2014, Rotteveel was found guilty by a federal jury of one count of mail fraud relating to 13 properties in Dixon. According to evidence produced at trial, Rotteveel acted as a real estate salesperson for the 13 properties, with over $7 million in loans authorized for just two buyers in seven months. He inflated the values of the properties and worked with loan officers to provide false information to lenders about the income and liabilities of the buyers to induce the lenders to fund loans for the properties. Rotteveel surreptitiously made the down payments on the homes, instead of the buyers, and got that money (and usually more) back from the lenders at closing. For most of the transactions, when the sales closed, the escrow officer distributed funds to a bank account in the name of Windmill Properties, a company owned by Rotteveel, without disclosing these payments to the lenders. All 13 properties were used as rentals, with Rotteveel collecting the rents through Windmill Properties. He netted over $300,000 through the sales in just seven months, and the lenders lost more than $3 million when all 13 properties underwent foreclosure.
U.S. Attorney Wagner stated: “Hubert Rotteveel used his knowledge of the real estate market in Dixon to defraud lenders of over $7 million, resulting in losses of over $3 million after each of the homes went into default and a foreclosure sale was held. Today’s sentence is one step in the continuing effort to hold real estate professionals responsible for their role in the mortgage meltdown.”
“This prosecution should serve as a warning to those who abuse their position of trust,” said Thomas McMahon, Acting Special Agent in Charge, IRS-Criminal Investigation. “Mr. Rotteveel manipulated the MLS listings for properties, failed to disclose his true role in the transactions and made numerous misrepresentations to lenders. Although this sentence cannot reverse the damage caused by Mr. Rotteveel, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”
This case was the product of an investigation by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Jean M. Hobler and Justin L. Lee prosecuted the case.
Delaware County Woman Charged with Defrauding GovernmentRead the Press Release
Denise Walls Ama, 64, of Haverford, Pennsylvania, was charged today by information with one count of theft of government funds, announced United States Attorney Zane David Memeger. According to the information, the defendant’s mother died in May 2006 yet she continued to receive retirement benefits intended for her mother until January 2015. The defendant’s alleged actions resulted in a loss to the government of approximately $108,306.
If convicted, the defendant faces a maximum possible sentence of 10 years in prison, up to three‑years of supervised release, restitution to the government of $108,306, a fine of up to $250,000, and a $100 special assessment.
The case was investigated by the Social Security Administration Office of Inspector General and is being prosecuted by Special Assistant United States Attorney Christopher E. Parisi.
An information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Crédit Agricole Corporate and Investment Bank Admits to Sanctions Violations, Agrees to Forfeit $312 MillionRead the Press Release
Combined with Payments to Regulators, Bank to Pay $787.3 Million
Crédit Agricole Corporate and Investment Bank (CACIB), a corporate and investment bank owned by Crédit Agricole S.A. and headquartered in Paris, has agreed to forfeit $312 million and enter into a deferred prosecution agreement with the U.S. Attorney’s Office of the District of Columbia for CACIB’s violations of the International Emergency Economic Powers Act (IEEPA) and the Trading With the Enemy Act (TWEA). CACIB employs over 7,000 employees and has a presence in over 30 countries. The bank has also entered into settlement agreements with the Treasury Department’s Office of Foreign Assets Control (OFAC), the Board of Governors of the Federal Reserve System, the New York County District Attorney’s Office and the New York State Department of Financial Services (DFS). In total, CACIB will pay $787.3 million in criminal and civil financial penalties.
The announcement was made by U.S. Attorney Channing D. Phillips of the District of Columbia, Assistant Director Joseph S. Campbell of the FBI’s Criminal Investigative Division, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and District Attorney Cyrus R. Vance Jr. of New York County.
A one-count felony criminal information and a related civil forfeiture complaint were filed today in federal court in the District of Columbia charging CACIB with knowingly and willfully conspiring to defraud the United States and to commit violations of IEEPA and TWEA. CACIB has waived federal indictment, agreed to the filing of the information and civil forfeiture complaint, and has accepted responsibility for its criminal conduct and that of its employees.
CACIB is to pay $156 million to the U.S. Attorney’s Office for the District of Columbia and $156 million to the New York County District Attorney’s Office.
The New York County District Attorney’s Office is also announcing today that CACIB has entered into a separate deferred prosecution agreement, and that, in the corresponding factual statement, CACIB admitted that it violated New York state law by falsifying the records of New York financial institutions.
In addition, the Board of Governors of the Federal Reserve System is announcing that CACIB has agreed to a cease and desist order, to take certain remedial steps to ensure its compliance with U.S. law in its ongoing operations and to pay a civil monetary penalty of $90.3 million. DFS is announcing CACIB has agreed to, among other things, employ a compliance consultant for a period of one year and pay a monetary penalty of $385 million to DFS. The Treasury Department’s OFAC has also levied a fine of approximately $329.5 million, which will be satisfied by the payments to federal and local agencies.
“Sanctions laws are critical to both our national security and foreign policy interests,” said U.S. Attorney Phillips. “CACIB, through its subsidiaries, violated our laws and our interests by conducting business on behalf of entities in Sudan. CACIB’s subsidiaries succeeded in these efforts, in large part, by hiding their conduct from CACIB’s employees in the United States. In this case, the overwhelming majority of the unlawful conduct occurred at a foreign subsidiary that no longer exists. Although CACIB moved quickly to end these unlawful transactions and fully cooperated with investigators, today’s resolution demonstrates that there will be significant consequences for any financial institution that allows its foreign subsidiaries that do not intend to respect U.S. law to, nevertheless, access the U.S. financial system.”
“The financial penalties imposed on Crédit Agricole Corporate and Investment Bank send a powerful message to any financial institution that prioritizes profits over adherence to the law,” said Assistant Director Campbell. “This investigation is another example of our commitment to work closely with our federal and state partners to ensure compliance with U.S. banking laws to promote integrity across financial institutions and to safeguard our national security.”
“Today’s announcement is another significant milestone on an international stage that should send a clear warning to other global financial institutions,” said Chief Weber. “IRS-CI’s work in this investigation, as well as prior sanction cases, has proven the ability of IRS-CI and our partners to expose violations of IEEPA and TWEA sanctions. We will continue to use our financial expertise to uncover these types of violations and hold financial institutions accountable for international criminal violations.”
“With this resolution, as well as eight previous agreements, my office and our partners are sending a clear message that financial institutions must comply with sanctions against rogue nations,” said District Attorney Vance. “Over the course of our investigation, it was revealed that subsidiaries of Crédit Agricole illegally moved hundreds of millions of dollars through the U.S. on behalf of clients in Sudan, Iran, Cuba and Burma. This type of conduct requires the bank be held accountable, and I would like to thank all our partners for their efforts to ensure that our financial system is protected.”
According to documents released publicly today, between August 2003 and September 2008, CACIB subsidiaries in Geneva knowingly and willfully moved approximately $312 million through the U.S. financial system on behalf of sanctioned entities located in Sudan, Burma, Iran and Cuba. Specifically, during this time period, these CACIB subsidiaries employed deceptive practices that concealed the involvement of banks designated as Specially Designated Nationals (SDNs) and other corporate entities in financial transactions that transited through the United States and thereby deprived the United States and CACIB’s New York branch and other U.S. financial institutions of the ability to filter for, and consequently block or reject, sanctioned payments. The bank’s conduct caused approximately $312 million in unlawful transactions to transit through the United States financial systems—although nearly all of the bank’s violations involved Sudanese business organizations. CACIB subsidiaries also unlawfully caused transactions on behalf of clients located in Burma, Iran and Cuba to unlawfully transit through the United States as well.
According to court documents, CACIB’s employees were aware of U.S. sanctions against Sudan and the fact that the sanctions applied to payments the bank sent to the United States. Further, CACIB has acknowledged that compliance personnel within CACIB subsidiaries in Geneva were aware of the U.S. sanctions against Sudan and that these sanctions applied to payments the bank sent through the United States. Despite this knowledge, compliance personnel authorized payments on behalf of the bank’s Sudanese customers.
CACIB has admitted that its employees permitted 11 Sudanese banks to maintain U.S. dollar accounts with CACIB—six of the Sudanese banks were SDNs. CACIB’s subsidiaries relied primarily on non-transparent payment messages, known as cover payments, to mask the unlawful payments that were sent through the United States.
This case was investigated by the IRS-CI and the FBI’s New York Field Office. This case is being prosecuted by Assistant U.S. Attorneys Matt Graves, Maia L. Miller and Zia Faruqui of the District of Columbia, and former Assistant U.S. Attorney Ann Petalas assisted in the investigation.
The New York County District Attorney’s Office also conducted its own investigation in conjunction with the Department of Justice. The Board of Governors of the Federal Reserve Bank of New York, the DFS and the Treasury Department’s OFAC provided assistance with this matter.
Crédit Agricole Corporate and Investment Bank Admits to Sanctions Violations, Agrees to Forfeit $312 MillionRead the Press Release
WASHINGTON- Crédit Agricole Corporate and Investment Bank (CACIB), a corporate and investment bank owned by Crédit Agricole S.A. and headquartered in Paris, France, has agreed to forfeit $312 million and enter into a deferred prosecution agreement with the United States Attorney’s Office for the District of Columbia for CACIB’s violations of the International Emergency Economic Powers Act (IEEPA) and the Trading With the Enemy Act (TWEA). CACIB employs over 7,000 employees and has a presence in over 30 countries. The bank has also entered into settlement agreements with the Treasury Department’s Office of Foreign Assets Control (OFAC), the Board of Governors of the Federal Reserve System, the New York County District Attorney’s Office, and the New York State Department of Financial Services. In total, CACIB will pay $787.3 million in criminal and civil financial penalties.
The announcement was made by U.S. Attorney Channing D. Phillips for the District of Columbia; Joseph S. Campbell, Assistant Director of the FBI’s Criminal Investigative Division; Chief Richard Weber of the Internal Revenue Service Criminal Investigation (IRS-CI), and District Attorney Cyrus R. Vance Jr. of New York County.
A one-count felony criminal information and a related civil forfeiture complaint were filed today in federal court in the District of Columbia charging CACIB with knowingly and willfully conspiring to defraud the United States and to commit violations of IEEPA and TWEA. CACIB has waived federal indictment, agreed to the filing of the information and civil forfeiture complaint, and has accepted responsibility for its criminal conduct and that of its employees.
CACIB is to pay $156 million to the U.S. Attorney’s Office for the District of Columbia and $156 million to the New York County District Attorney’s Office.
The New York County District Attorney’s Office is also announcing today that CACIB has entered into a separate deferred prosecution agreement, and that, in the corresponding factual statement, CACIB admitted that it violated New York State law by falsifying the records of New York financial institutions.
In addition, the Board of Governors of the Federal Reserve System is announcing that CACIB has agreed to a cease and desist order, to take certain remedial steps to ensure its compliance with U.S. law in its ongoing operations, and to pay a civil monetary penalty of $90.3 million. The New York State Department of Financial Services (DFS) is announcing CACIB has agreed to, among other things, employ a compliance consultant for a period of one year, and pay a monetary penalty to DFS of $385 million. The Treasury Department’s Office of Foreign Assets Control has also levied a fine of approximately $329.5 million, which will be satisfied by the payments to federal and local agencies.
“Sanctions laws are critical to both our national security and foreign policy interests,” said U.S. Attorney Phillips. “CACIB, through its subsidiaries, violated our laws and our interests by conducting business on behalf of entities in Sudan. CACIB’s subsidiaries succeeded in these efforts, in large part, by hiding their conduct from CACIB’s employees in the United States. In this case, the overwhelming majority of the unlawful conduct occurred at a foreign subsidiary that no longer exists. Although CACIB moved quickly to end these unlawful transactions and fully cooperated with investigators, today’s resolution demonstrates that there will be significant consequences for any financial institution that allows its foreign subsidiaries that do not intend to respect U.S. law to, nevertheless, access the U.S. financial system.”
“The financial penalties imposed on Crédit Agricole Corporate and Investment Bank send a powerful message to any financial institution that prioritizes profits over adherence to the law,” said Assistant Director Campbell. “This investigation is another example of our commitment to work closely with our federal and state partners to ensure compliance with U.S. banking laws to promote integrity across financial institutions and to safeguard our national security.”
“Today’s announcement is another significant milestone on an international stage that should send a clear warning to other global financial institutions,” said Chief Weber. “IRS-CI’s work in this investigation, as well as prior sanction cases, has proven the ability of IRS-CI and our partners to expose violations of IEEPA and TWEA sanctions. We will continue to use our financial expertise to uncover these types of violations and hold financial institutions accountable for international criminal violations.”
“With this resolution, as well as eight previous agreements, my Office and our partners are sending a clear message that financial institutions must comply with sanctions against rogue nations,” said District Attorney Vance. “Over the course of our investigation, it was revealed that subsidiaries of Crédit Agricole illegally moved hundreds of millions of dollars through the U.S. on behalf of clients in Sudan, Iran, Cuba, and Burma. This type of conduct requires the bank be held accountable, and I would like to thank all our partners for their efforts to ensure that our financial system is protected.”
According to documents released publicly today, between August 2003 and September 2008, CACIB subsidiaries in Geneva, Switzerland, knowingly and willfully moved approximately $312 million through the U.S. financial system on behalf of sanctioned entities located in Sudan, Burma, Iran, and Cuba. Specifically, during this time period, these CACIB subsidiaries employed deceptive practices that concealed the involvement of banks designated as Specially Designated Nationals (SDNs) and other corporate entities in financial transactions that transited through the United States and thereby deprived the United States and CACIB’s New York branch and other U.S. financial institutions of the ability to filter for, and consequently block or reject, sanctioned payments. The bank’s conduct caused approximately $312 million in unlawful transactions to transit through the United States financial systems—although nearly all of the bank’s violations involved Sudanese business organizations. CACIB subsidiaries also unlawfully caused transactions on behalf of clients located in Burma, Iran, and Cuba to unlawfully transit through the United States as well.
According to court documents, CACIB’s employees were aware of U.S. sanctions against Sudan and the fact that the sanctions applied to payments the bank sent to the United States. Further, CACIB has acknowledged that compliance personnel within CACIB subsidiaries in Geneva were aware of the U.S. sanctions against Sudan and that these sanctions applied to payments the bank sent through the United States. Despite this knowledge, compliance personnel authorized payments on behalf of the bank’s Sudanese customers.
CACIB has admitted that its employees permitted 11 Sudanese banks to maintain U.S. dollar accounts with CACIB—six of the Sudanese banks were SDNs. CACIB’s subsidiaries relied primarily on non-transparent payment messages, known as cover payments, to mask the unlawful payments that were sent through the United States.
This case was investigated by the IRS-Criminal Investigation and FBI’s New York Field Office. This case is being prosecuted by Assistant U.S. Attorneys Matt Graves, Maia L. Miller, and Zia Faruqui of the U.S. Attorney’s Office for the District of Columbia, and former Assistant U.S. Attorney Ann Petalas assisted in the investigation.
The New York County District Attorney’s Office also conducted its own investigation in conjunction with the Department of Justice. The Board of Governors of the Federal Reserve Bank of New York, the New York State Department of Financial Services and the Treasury Department’s Office of Foreign Assets Control provided assistance with this matter.
California-Based Heroin Distributor Sentenced to More Than 10 Years in Prison on Drug Trafficking ChargesRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today Alberto Gasca, 31, of Los Angeles, California, to serve 128 months in prison and five years of supervised release on drug trafficking charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Gasca pleaded guilty in February 2015 to conspiracy to possess with intent to distribute heroin.
U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office.
According to filed court documents and today’s sentencing hearing, beginning in 2012, Gasca was a major drug distributor based in California, responsible for smuggling bulk drug shipments from Mexico. Court records show that Gasca used an extensive transportation network of couriers to traffic the heroin and other drugs, including methamphetamine, from Los Angeles to distribution cells throughout the United States, including the Charlotte area. According to court documents, Gasca’s couriers typically transported the heroin hidden in false compartments of large rolling suitcases. Law enforcement arrested Gasca in September 2014 in California. According to court records, at the time of his arrest, law enforcement seized from Gasca’s residence $108,000 in cash, drug scales, plastic packaging, kilogram wrappers, two kilograms of heroin, more than five ounces of methamphetamine and a ledger. Gasca’s prosecution is part of an ongoing investigation into drug trafficking of heroin from Mexico. Over the course of the investigation, law enforcement seized approximately 50 pounds of heroin, and approximately $170,000 identified as drug proceeds.
Six other conspirators have been sentenced to date in connection with this investigation. Hector Manuel Castaneda Gastelo and Yolanda Gonzalez were each sentenced to 20 years in prison; Marcelino Rivera Vorquez was sentenced to 7.5 years in prison; Fernando Hernandez was sentenced to 7.25 years in prison; and Benjamin Villanueva Estrada was sentenced to 6.5 years in prison. Another conspirator, Omar Kamirez Lizama is awaiting sentencing.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Gasca is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The case was investigated by the DEA in Charlotte.In making today’s announcement, U.S. Attorney Rose thanked the Ontario, California Police Department and the DEA’s Office in Los Angeles for their assistance with this investigation. Assistant U.S. Attorney Elizabeth Greene of the U.S. Attorney’s Office in Charlotte is handling the prosecution.
California Man Pleads Guilty to Federal Methamphetamine Trafficking Charge in New MexicoRead the Press Release
ALBUQUERQUE – Kevin Hawkins, 50, of San Bernardino, Calif., pleaded guilty today in federal court in Albuquerque, N.M., to a methamphetamine trafficking charge. Under the terms of his plea agreement, Hawkins will be sentenced to 60 months in prison followed by a term of supervised release to be determined by the court.
Hawkins was arrested on Sept. 23, 2015, at the Amtrak Train Station in Albuquerque after DEA agents found approximately 300 grams of methamphetamine inside Hawkins’ shoes.
During today’s hearing, Hawkins pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute. Hawkins admitted transporting 300 grams of methamphetamine on Sept. 23, 2015, while traveling through Albuquerque on the Amtrak Train. Hawkins further admitted that he intended to transfer the methamphetamine to another person at his destination.
Hawkins remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Interdiction Unit of the DEA’s Albuquerque office which focuses on disrupting the flow of narcotics, weapons, and the proceeds of illegal activities as they are smuggled into or through New Mexico in passenger buses, passenger trains, commercial vehicles and automobiles. Assistant U.S. Attorney Jacob Wishard is prosecuting the case.
Butte County Man Sentenced to 15 Years in Prison for Child Pornography OffenseRead the Press Release
SACRAMENTO, Calif. —Keith Joseph Banning, 59, of Magalia, was sentenced today to 15 years in prison for receiving and distributing child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, an undercover investigation revealed that in June through August of 2012, an Internet user at Banning’s home address was using a peer-to-peer file-sharing network to share pictures and videos depicting the sexual exploitation of children, including a number of videos involving children under the age of 10. A search warrant executed at Banning’s home revealed that his computers contained hundreds of videos depicting the sexual abuse of children, and that at various times many of those videos were made available to others over the Internet through a file-sharing network. Banning was caught in another state living under a false name, and had rebuilt his collection of child pornography while living on the run.
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney Matthew G. Morris prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet safety.
19 October 2015
Wilkins Twp. Woman Sentenced to 7 Years in Prison for Distributing Prescription Pain PillsRead the Press Release
PITTSBURGH – An Allegheny County resident has been sentenced in federal court to seven years in prison to be followed by three years of supervised release, on her 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 Brandy Marie Bara, a/k/a Brandy Marie White, 34, of Turtle Creek, PA.
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. Bara was the primary distributor of the pills. Bara agreed that she was responsible for illegally distributing between approximately 15,000 and 50,000 oxycodone 30 mg. pills in the Pittsburgh area.
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 Bara.
United States Enters into Consent Judgment with New York City to Ensure That Individuals in the City’s Homeless Family Shelter System Who Are Deaf or Hard of Hearing Receive Necessary Aids and ServicesRead the Press Release
Robert L. Capers, United States Attorney for the Eastern District of New York, today announced the filing of a Complaint and Consent Judgment in United States v. City of New York, Civil Action No. CV-15-5986 to settle violations of the Americans with Disabilities Act, 42 U.S.C. §§ 12134-34 (the ADA), in the City’s homeless shelter system.
In its complaint, the United States alleges that the City of New York denied sign language interpreters and other auxiliary aids and services to deaf and hard of hearing individuals in its homeless shelter system. The complaint alleges that workers at DHS’ homeless family shelter intake facility often attempted to communicate through the use of handwritten notes or by relying on family members to provide sign language interpretation. In one case, workers at the City’s family shelter intake facility relied on the four year-old daughter of RK[1], a deaf single mother, to interpret. The complaint also alleges that the failure to provide necessary auxiliary aids and services, including visual doorbells and fire alarms, endangered the lives of hearing-impaired individuals and denied them the services provided to other shelter residents, such as job and housing placement assistance.
Under the terms of the settlement, the City has agreed to take appropriate steps to ensure effective communication with applicants for family shelter who are deaf or hard of hearing, including providing qualified sign language interpretation services. The City has also agreed to retrofit at least 10 dwelling units for families with children, six units for adult families, 200 beds for single men, and 100 beds for single women with accessible features, including visual alarms and doorbells. Employees within the homeless shelter system who interact regularly with residents or applicants for shelter will receive training in effective communication. The City will pay RK $2,500.00.
“The ADA requires the City to communicate effectively and provide auxiliary aids and services to the deaf or hard of hearing,” stated U.S. Attorney Capers. “This settlement ensures that vulnerable residents in the City’s homeless shelter system receive appropriate City services.”
The United States’ action was filed contemporaneously with settlement of Ihetu et al. v. City of New York et al., Civil Action No. CV-13-01732 (MKB/VMS), in which a mother who is deaf and her three children alleged similar ADA violations against the City and homeless family shelter operators.
The United States’ claims were litigated by Assistant United States Attorneys Kelly Horan Florio and Michael J. Goldberger.
[1] RK is identified by initials only to protect her confidentiality.
U.S. Attorney’s Office and California Office of Emergency Services Join Representatives of the Greater-Fresno Muslim Community in Effort to Strengthen Ties and Equip Communities to Counter Radicalization to ViolenceRead the Press Release
SACRAMENTO, Calif. — On Saturday, October 17, the United States Attorney’s Office, in partnership with the California Office of Emergency Services, held a Community Resilience Exercise (CREX) at the central library at California State University, Fresno. The day-long event, involving about 50 participants, brought together representatives of law enforcement and other government agencies with representatives of Muslim communities in the Fresno and Madera areas.
Law enforcement participants included the U.S. Attorney, Fresno Office Chief Mark E. Cullers, Assistant Director David Fukutomi of CalOES, Fresno Sheriff Margaret Mims, Fresno Police Chief Jerry Dyer, Fresno State Police Chief David Huerta, and others including school resource officers, FBI agents, and mental health professionals from the Fresno County Department of Behavioral Health. Muslim community representatives included religious leaders from several congregations such as Masjid Fresno, Masjid Madera, Badr Islamic Center, Masjid Al-Aqabah, and Islamic Cultural Center of Fresno; business, academic and civil leaders; representatives of the Muslim Society of Central California; and students.
ISIS and other violent extremist organizations are adept at using modern communication channels to recruit and radicalize young people. The CREX is a scenario‑based exercise, facilitated by professionals from the National Counterterrorism Center, designed to strengthen relationships between Muslim communities and government and to help both community leaders and local law enforcement focus on local resources and strategies to protect young people and their communities from these groups.
“We in law enforcement must work hand-in-hand with people of all faiths in order to effectively protect children and our communities. No one is more concerned about these issues than people in the communities that are targeted for recruitment by extremists,” said U.S. Attorney Wagner. “Our exercise this weekend is just one example of how various Muslim communities throughout our district are committed to helping address this problem. I am honored to work with them in carrying out this very important work.”
Cal OES Assistant Director David Fukutomi stated: “The Governor’s Office of Emergency Services (Cal OES) is proud to be a co-sponsor of this important effort. We appreciate the participation of the local community leaders as we seek to build lasting relationships that will have lasting benefit to our families and communities.”
Over 250 U.S. citizens or residents have traveled or attempted to travel to Syria and Iraq since early 2014 to join militant groups, mostly ISIS. Many of them are minors, including young girls. Approximately 28 have been arrested by federal authorities while attempting to travel overseas to join extremist groups.
U.S. Attorney's Office Invites Schools to Participate in the National Student Pledge Against Gun ViolenceRead the Press Release
SAVANNAH, GA – United States Attorney Edward Tarver announced that on Wednesday, October 21, 2015, students in public schools throughout the Southern District of Georgia will join with students from across the nation to participate in the first annual Student Pledge Against Gun Violence Day.
Elementary, middle and high school students will be given the opportunity to voluntarily sign pledges. Older students will vow that they will never take a gun to school, will never resolve a dispute with a gun and will use their influence to prevent friends from using guns to cause harm to others. Elementary students will make a simpler commitment, pledging that if they see a gun they will not touch it, they will assume that any gun they see might be loaded and they will make smart choices to keep themselves safe.
The Student Pledge Against Gun Violence is a national initiative that honors the role that young people, through their own decisions, can play in reducing gun violence. Held in conjunction with the Day of National Concern about Young People and Gun Violence, the initiative provides a means for teachers and community leaders to speak to young people about gun violence. Over 10 million students nationwide have signed the pledge since its inception in 1996.
U.S. Attorney Tarver stated, “This United States Attorney’s Office is pleased to join in this important initiative. Through the pledge, we hope to provide our local schools with an opportunity to start a discussion with their students about the dangerous and often deadly toll that gun violence has on their generation. Prevention begins with the knowledge that each individual has the power to make the right choices to put an end to senseless violence.”
In addition to providing the pledges to school leaders and students in the 43 counties that make up Georgia’s Southern District, the U.S. Attorney’s Office will also coordinate with community leaders and local, state and federal law enforcement agencies to provide speakers at several schools to talk to students about what they can do to reduce gun violence in their communities.
If your school is interested in participating in the Student Pledge Against Gun Violence Day, please contact Katie Guardino at [email protected] or 912-652-4422.
Two Pennsylvania men sentenced for heroin traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Qaaim Clark, 34, and Reginald Maurice Teasley, Jr., 38, both of Philadelphia, Pennsylvania, were sentenced today in federal court for heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Clark was sentenced today to 51 months in prison. An investigation by the West Virginia State Police Bureau of Criminal Investigation, the Federal Bureau of Investigation, and the Mon Metro Drug and Violent Crime Task Force revealed that Clark was involved in a drug distribution operation in which heroin and prescription painkillers were transported across state lines from Philadelphia, Pennsylvania to Morgantown, West Virginia for redistribution and sale. Specifically, Clark sold heroin in April 2014 in Monongalia County, West Virginia near West Virginia University. He pled guilty in June 2015 to one count of “Distribution of Heroin within 1,000 feet of a Protected Location.”
Teasley was sentenced today to 46 months in prison after he was discovered in possession of heroin in October 2014 in Harrison County, West Virginia. He pled guilty in May 2015 to one count of “Possession with Intent to Distribute Heroin” following an investigation by the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative.
Assistant U.S. Attorney Zelda Wesley prosecuted Clark and Assistant U.S. Attorney Andrew Cogar and former Assistant U.S. Attorney Shawn Morgan prosecuted Teasley on behalf of the government.
U.S. District Judge Irene M. Keeley presided.
Two Former Swisher Hygiene, Inc. Executives Indicted on Securities Fraud and Obstruction of Justice ChargesRead the Press Release
Charlotte, N.C. – A federal grand jury has indicted two former executives of Swisher Hygiene Inc. (Swisher) on securities fraud and obstruction of justice charges, announced U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. Joining in today’s announcement is Special Agent in Charge John A. Strong of the FBI’s Charlotte Division.
Swisher’s former chief financial officer, Michael Kipp, 61, of Charlotte, and certified public accountant and Swisher’s former director of external reporting, Joanne Viard, 36, of Santa Rosa Beach, Florida, have been charged in connection with a securities fraud conspiracy allegedly carried out at Swisher throughout fiscal year 2011 and a subsequent obstruction of justice scheme in 2012. The federal indictment was returned late afternoon and Kipp and Viard are scheduled to make their initial appearances in federal court on Tuesday, Oct. 20, 2015.
“My office has a long record of holding corporate executives accountable for their criminal conduct,” said U.S. Attorney Rose. “Today’s charges continue to make clear that regardless of title or position, my office will prosecute corporate executives who engage in financial fraud schemes that defraud the investing public and undermine the integrity of our financial markets. We will work diligently to uncover such fraud, no matter how pernicious the cover-up.”
“As alleged in the indictment, these corporate executives were entrusted to fairly and accurately report the earnings of their employer; instead, they manipulated and falsified the numbers putting the hard earned money of shareholders at risk and undermining the laws in place to protect our financial markets,” said Special Agent in Charge Strong. “The FBI will root out corporate fraud wherever it exists and ensure those who engage in such practices are held accountable.”
Today’s charges follow the Oct.7, 2015, announcement that Swisher had entered into a deferred prosecution agreement with the United States, in which Swisher accepted and acknowledged responsibility for the conduct of its former employees and agreed to pay a $2 million penalty. Formal charges were also filed on Oct. 7, 2015, against Swisher’s former senior-level accounting employee, John Pierrard, who is scheduled to enter his guilty plea on Tuesday, Oct. 20, 2015, for his role in the alleged accounting fraud conspiracy.
According to allegations contained in the indictment and documents filed in related cases:
Throughout fiscal year 2011, Kipp, Viard and their conspirators engaged in an accounting fraud scheme to ensure that Swisher’s reported earnings had met or exceeded executive management’s forecasts, and to conceal the existence of the fraud from Swisher’s auditors, Wells Fargo, the investing public and others. Some of the fraudulent methods Kipp, Viard and their conspirators used to manipulate Swisher’s books and records to fraudulently increase the company’s income included reducing expenses by moving them from the company’s profit and loss statement to its balance sheet as well as engaging in what is commonly referred to as “cookie jar” accounting.
The accounting fraud scheme began to unravel when Swisher’s then-controller pushed back on making a fraudulent entry during the year end close. The controller wrote in an email, “I’ll run it by BDO [Swisher’s auditors] so we’re on the same page,” to which Kipp responded, “You’ll run it by me since I’m the chief accounting officer. I’m out of patience with this.” The controller persisted in his refusal to book the fraudulent entry and Kipp fired him. Swisher’s audit committee learned of the controller’s allegations and promptly commissioned an independent internal investigation. After the allegations of fraud were reported, Kipp and Viard almost immediately began to engage in misleading conduct to conceal the accounting fraud conspiracy and to obstruct justice by lying to the investigators hired by the audit committee.
Approximately 11 months following the announcement of the investigation, Swisher filed restated financial reports for the first three quarters of 2011 and filed its Form 10-K for the 2011 year. The restatement reflected, among other things, that Swisher had substantially overstated its earnings and significantly understated its losses during the relevant time period.
The indictment charges Kipp and Viard each with one count of conspiracy to commit securities fraud, to falsify books, records and accounts of Swisher, and to make misleading statements to Swisher’s auditors and accountants; one count of securities fraud; one count of wire fraud; and one count of obstruction of justice. Kipp is also charged with one count of bank fraud. The conspiracy charge carries a maximum prison term of five years. The securities fraud, wire fraud and obstruction offenses each carry a maximum prison term of 20 years. The bank fraud charge carries a maximum prison term of 30 years.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Rose praised the FBI for its outstanding work in leading the ongoing investigation that resulted in the filing of these charges. Rose also thanked the U.S. Securities and Exchange Commission for their assistance in the investigation.
Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are assigned to this case.
Two Former Swisher Hygiene Inc. Executives Indicted on Securities Fraud and Obstruction of Justice ChargesRead the Press Release
Former Senior Level Corporate Employee to Plead Guilty to Securities Fraud Conspiracy
A federal grand jury in Charlotte, North Carolina, has indicted two former executives of Swisher Hygiene Inc. (Swisher) on securities fraud and obstruction of justice charges, announced U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. Joining in today’s announcement is Special Agent in Charge John A. Strong of the FBI’s Charlotte Division.
Swisher’s former chief financial officer, Michael Kipp, 61, of Charlotte, and certified public accountant and Swisher’s former director of external reporting, Joanne Viard, 36, of Santa Rosa Beach, Florida, have been charged in connection with a securities fraud conspiracy allegedly carried out at Swisher throughout fiscal year 2011 and a subsequent obstruction of justice scheme in 2012. The federal indictment was returned late afternoon and Kipp and Viard are scheduled to make their initial appearances in federal court on Tuesday, Oct. 20, 2015.
“My office has a long record of holding corporate executives accountable for their criminal conduct,” said U.S. Attorney Rose. “Today’s charges continue to make clear that regardless of title or position, my office will prosecute corporate executives who engage in financial fraud schemes that defraud the investing public and undermine the integrity of our financial markets. We will work diligently to uncover such fraud, no matter how pernicious the cover-up.”
“As alleged in the indictment, these corporate executives were entrusted to fairly and accurately report the earnings of their employer; instead, they manipulated and falsified the numbers putting the hard earned money of shareholders at risk and undermining the laws in place to protect our financial markets,” said Special Agent in Charge Strong. “The FBI will root out corporate fraud wherever it exists and ensure those who engage in such practices are held accountable.”
Today’s charges follow the Oct.7, 2015, announcement that Swisher had entered into a deferred prosecution agreement with the United States, in which Swisher accepted and acknowledged responsibility for the conduct of its former employees and agreed to pay a $2 million penalty. Formal charges were also filed on Oct. 7, 2015, against Swisher’s former senior-level accounting employee, John Pierrard, who is scheduled to enter his guilty plea on Tuesday, Oct. 20, 2015, for his role in the alleged accounting fraud conspiracy.
According to allegations contained in the indictment and documents filed in related cases:
Throughout fiscal year 2011, Kipp, Viard and their conspirators engaged in an accounting fraud scheme to ensure that Swisher’s reported earnings had met or exceeded executive management’s forecasts, and to conceal the existence of the fraud from Swisher’s auditors, Wells Fargo, the investing public and others. Some of the fraudulent methods Kipp, Viard and their conspirators used to manipulate Swisher’s books and records to fraudulently increase the company’s income included reducing expenses by moving them from the company’s profit and loss statement to its balance sheet as well as engaging in what is commonly referred to as “cookie jar” accounting.
The accounting fraud scheme began to unravel when Swisher’s then-controller pushed back on making a fraudulent entry during the year end close. The controller wrote in an email, “I’ll run it by BDO [Swisher’s auditors] so we’re on the same page,” to which Kipp responded, “You’ll run it by me since I’m the chief accounting officer. I’m out of patience with this.” The controller persisted in his refusal to book the fraudulent entry and Kipp fired him. Swisher’s audit committee learned of the controller’s allegations and promptly commissioned an independent internal investigation. After the allegations of fraud were reported, Kipp and Viard almost immediately began to engage in misleading conduct to conceal the accounting fraud conspiracy and to obstruct justice by lying to the investigators hired by the audit committee.
Approximately 11 months following the announcement of the investigation, Swisher filed restated financial reports for the first three quarters of 2011 and filed its Form 10-K for the 2011 year. The restatement reflected, among other things, that Swisher had substantially overstated its earnings and significantly understated its losses during the relevant time period.
The indictment charges Kipp and Viard each with one count of conspiracy to commit securities fraud, to falsify books, records and accounts of Swisher, and to make misleading statements to Swisher’s auditors and accountants; one count of securities fraud; one count of wire fraud; and one count of obstruction of justice. Kipp is also charged with one count of bank fraud. The conspiracy charge carries a maximum prison term of five years. The securities fraud, wire fraud and obstruction offenses each carry a maximum prison term of 20 years. The bank fraud charge carries a maximum prison term of 30 years.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Rose praised the FBI for its outstanding work in leading the ongoing investigation that resulted in the filing of these charges. Rose also thanked the U.S. Securities and Exchange Commission for their assistance in the investigation.
Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are assigned to this case.
Three Men Sentenced Today for Drug Trafficking in Kern CountyRead the Press Release
FRESNO, Calif. — Today, United States District Judge Lawrence J. O'Neill sentenced three defendants in two cases for trafficking methamphetamine, United States Attorney Benjamin B. Wagner announced.
In the first case, Jose Mojarro Cruz, aka Shyboy, 28, of Bakersfield was sentenced to 15 years and nine months in prison for conspiring to distribute and possess with intent to distribute methamphetamine and heroin. He pleaded guilty on April 21, 2015. Co-defendant Arnoldo Delgado Garcia (Delgado), aka Fabricio Rene Delgado-Perea, 35, a Mexican national, was sentenced to 11 years and four months in prison. On May 11, 2015, he pleaded guilty to conspiring to distribute and possess with intent to distribute methamphetamine and heroin.
According to court documents, from May 2013 through January 2014, the defendants regularly distributed methamphetamine and heroin to various drug dealers and users in Kern County. The defendants admitted to distributing between 15 and 45 kilograms of methamphetamine and over 1,000 grams of heroin. Co-defendant Erik Gesus Rivera, 28, of Bakersfield, pleaded guilty to possession with intent to distribute methamphetamine, and on September 21, 2015, was sentenced to two years in prison.
This case was the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Drug Enforcement Administration, Kern County Sheriff’s Office, and the Southern Tri-County High Intensity Drug Trafficking Area Task Force. Assistant United States Attorney Brian K. Delaney prosecuted the case.
In the second case, Judge O’Neill sentenced Juan Lascano Jr., 32, of Bakersfield, to 10 years in prison. On July 27, 2015, Lascano pleaded guilty to distribution of methamphetamine.
According to court documents, Lascano and his co-defendants conspired to distribute pound-quantities of methamphetamine in the Bakersfield area. On September 21, 2015, co-defendant Guillermo Magallanes, 36, of Bakersfield, pleaded guilty to conspiracy to distribute methamphetamine, and co-defendant Pasqual Gonzales Magallanes, 44, of Bakersfield, pleaded guilty to distribution of methamphetamine.
Sentencing for the two co-defendants is scheduled for December 14, 2015. Guillermo Magallanes faces a maximum statutory penalty of life in prison and a $5 million fine, and Pasqual Gonzales Magallanes faces a maximum statutory penalty of 40 years in prison and a $2 million fine. The actual sentences, 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.
In addition to the criminal charges, the United States is seeking the forfeiture of $31, 242, a 2014 Lexus IS250 F Sport, and a 2012 Acura TL sedan as proceeds of the illegal drug trafficking activity.
This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Kern County Sheriff’s Office, and the Bakersfield Police Department. Assistant United States Attorney Brian K. Delaney is prosecuting the case.
Three Hampton Roads Men Sentenced for Armed Robberies in Norfolk and Virginia BeachRead the Press Release
NORFOLK, Va. – Edgar Brito, 21, of Virginia Beach, was sentenced today to 128 months in prison for the armed robbery of approximately $100,000 in cell phones from numerous businesses throughout Hampton Roads. Co-conspirator Daren Artis, 20, of Chesapeake, was sentenced to 128 months in prison on Sept. 17, 2015, and co-conspirator Alexander Horst, 23, of Virginia Beach, was sentenced to 110 months in prison on Sept. 21, 2015.
According to the statement of facts filed with the plea agreement, the men committed a string of armed robberies of stores that sold cellular phones, including Radio Shack on Colley Avenue in Norfolk on Dec. 2, 2014; T-Mobile on Tidewater Drive in Norfolk on Dec. 7, 2014; and a T-Mobile store on Phoenix Drive in Virginia Beach on Jan. 1, 2015. During these robberies, the men entered the stores wearing masks and demanded employees at gunpoint to provide cash from the registers and cell phones.
As the three men fled from the Virginia Beach robbery they dropped one of their duffle bags, which contained stolen cell phones and a Greyhound bus ticket bearing Brito’s name. Detectives from the Virginia Beach Police Department arrested Brito and he confessed to the armed robbery. Nearly 40 cellular phones, a .357 handgun, and cash from the Virginia Beach armed robbery were recovered from the defendants.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after the sentence was imposed by U.S. District Judge Mark S. Davis.
This case was investigated by the FBI’s Norfolk Field Office, and the Norfolk and Virginia Beach Police Departments. U.S. Attorney William D. Muhr and Virginia Assistant Attorney General and Special Assistant U.S. Attorney John F. Butler 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. 2:15-cr-46.
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Thomas Martinez Arraigned on Federal Carjacking and Firearms ChargesRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez, Kari E. Brandenburg, Special Agent in Charge Thomas G. Atteberry of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Chief Gorden Eden, Jr., of the Albuquerque Police Department (APD) announced that Thomas Martinez, 26, of Albuquerque, N.M., was arraigned this morning on an indictment charging him with violating the federal carjacking and firearms laws.
During today’s proceeding, Martinez entered a not guilty plea to a four-count indictment that was filed on Aug. 11, 2015, and charged him with two counts of carjacking and two counts of brandishing and discharging a firearm during a carjacking. According to court filings, Martinez committed all four crimes on July 22, 2015, in Bernalillo County, N.M., as he allegedly attempted to evade APD officers who were seeking to arrest him on a warrant arising out of an unrelated state court case.
According a criminal complaint filed on July 23, 2015, Martinez allegedly committed the first carjacking as he attempted to flee from officers conducting surveillance in the vicinity of a hotel in northeast Albuquerque. Martinez allegedly ran to a Chevrolet sedan occupied by a driver and three children as the driver was entering a ramp onto Interstate 40. Martinez allegedly brandished a firearm at the driver, pushed the driver into the passenger seat of the Chevrolet, and used the Chevrolet to continue his flight from the officers. The children were able to get out of the vehicle before Martinez drove away with the driver. An APD officer who was attempting to prevent the carjacking allegedly was dragged by the Chevrolet as Martinez drove away. As Martinez continued his flight, the driver of the Chevrolet began to fight with Martinez in an effort to get him to stop the vehicle. Martinez allegedly responded by discharging a firearm in an attempt to shoot the driver. When Martinez slowed down, the driver was able to jump out of the Chevrolet.
The complaint further alleges that Martinez continued his flight in the Chevrolet and abandoned the vehicle in a neighborhood in southeast Albuquerque. There Martinez allegedly forced his way into a Cadillac sedan occupied by an older man seated in the front passenger seat of the vehicle. As Martinez began to drive away, another man confronted Martinez, got into the Cadillac, and began fighting with Martinez. During the fight, Martinez allegedly attempted to discharge his gun at the man. Shortly thereafter, the man was able to disarm Martinez, and Martinez was arrested by APD officers on state charges.
Martinez remained in state custody on related state charges until he was transferred to federal custody to face the charges in the federal indictment.
If convicted, Martinez faces a statutory maximum penalty of 15 years in federal prison on each of the carjacking charges. If convicted on the first charge of brandishing and discharging a firearm, Martinez faces a statutory mandatory minimum of ten years in prison. If convicted on the second brandishing and discharging count, he faces a mandatory minimum of 25 years in federal prison. The sentences imposed on the firearms charges, 35 years, must be served consecutive to any sentence imposed on the carjacking charges. Charges in indictments are merely accusations. Defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the ATF office in Albuquerque and APD with assistance from the 2nd Judicial District Attorney’s Office. Assistant U.S. Attorney Paul Mysliwiec is prosecuting the case 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. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, under this initiative.
Sierra Danielle Messer Indicted on Federal Child Pornography ChargesRead the Press Release
KNOXVILLE, Tenn. - A federal grand jury has returned a two-count indictment charging Sierra Danielle Messer, 21, of Newport, Tenn., with knowingly distributing and possessing child pornography involving prepubescent minors. This illegal conduct is alleged to have taken place in June and September 2015.
Messer was arrested on Oct. 8, 2015, in Newport, Tenn., by members of the Knoxville Police Department’s Internet Crimes Against Children Task Force (ICAC), with assistance from the City of Newport Police Department. Following the arrest, an initial appearance was held in U.S. District Court in Knoxville before the Honorable H. Bruce Guyton., U.S. Magistrate Judge, at which the indictment was unsealed and she was apprised of the charges. Messer pleaded not guilty. A detention hearing was conducted on Oct. 15, 2015, the result of which is pending.
Details of the charges are outlined in the indictment which is filed as a public record in the U.S. District Court for the Eastern District of Tennessee at Knoxville.
Members of the public are reminded that these are only charges and that every person is presumed innocent until his or her guilt has been proven beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Sex Offender Detained for Allegedly Violating SORNARead the Press Release
PROVIDENCE, R.I. – Byron Deweldon, 45, of Warwick, has been ordered detained in federal custody on a criminal complaint charging him with failing to register as a sex offender, in violation of the Sex Offender Registration and Notification Act (SORNA).
It is alleged in court documents that Deweldon failed to notify the Warwick Police Department or others of an address change after leaving his Warwick home on September 19, 2015, and traveling to locations in California, Florida, Maryland, Connecticut, Maine and Pennsylvania, all of which have Sex Offender registry statutes. Deweldon has a valid, non-expiring requirement that he register as a sex offender.
Deweldon’s arrest and detention is announced by United States Attorney Peter F. Neronha, U.S. Marshal Jamie A. Hainsworth and Warwick Police Chief Colonel Stephen M. McCartney.
According to court records, Deweldon was convicted in May 1995, in Rhode Island Superior Court, on three counts of second degree molestation; in May 1995, in Massachusetts, of indecent assault and battery on a child under the age of 14; in Rhode Island state court in April 2004, of third degree sexual assault; and in 2008, Deweldon was civilly committed by the Commonwealth of Massachusetts as a danger to the public. He was released on December 18, 2014, and moved into a family member’s home in Warwick.
Deweldon was arrested upon his return to Rhode Island last week by members of the U.S. Marshal’s SORNA Task Force, the U.S. Marshals and the Warwick Police Department.
SORNA provides a comprehensive set of federal standards for sex offender registration and notification in the United States through the nationwide network of sex offender registration and notification programs. Additionally, SORNA requires registered sex offenders to register and keep their registration current in each jurisdiction in which they reside, work, or go to school, and to make periodic in-person appearances to verify and update their registration information.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Severn Man Sentenced to over 11 Years in Prison for Possessing Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Albert A. Firlie, age 67, of Severn, Maryland, today to 135 months in prison followed by supervised release for life for possessing child pornography. Judge Bredar enhanced Firlie’s sentence based upon a 1991 child abuse conviction in Howard County, Maryland involving the sexual abuse of a prepubescent girl. Judge Bredar also ordered that upon his release from prison, Firlie must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Anne Arundel County Police Chief Tim Altomare.
According to Firlie’s plea agreement, beginning no later than October 2003, Firlie obtained child pornography from the internet. In November 2007 and April 2009, he created email accounts with a username that combined his first name with the first name of the victim in his child sex abuse case. Firlie used the internet to try to locate the victim and her family as recently as June 2014.
From December 12, 2008 to December 26, 2014, Firlie uploaded approximately 120 videos depicting minors engaged in sexually explicit conduct, using a website that provided users with remote “cloud” storage for media files. On September 13, 2014, Firlie attempted to upload 51 videos depicting minors engaged in sexually explicit conduct to another email address, using a different website that also provided users with the remote storage. That website detected the use of its cloud services for the storage of child pornography and reported the matter to the National Center for Missing and Exploited Children, who in turn reported the matter to the U.S. Postal Inspection Service.
On February 3, 2015, investigators executed a search warrant at Firlie’s residence recovered a large number of computers and other digital storage media which contained over 600 images, including over 120 videos depicting minors engaged in sexually explicit conduct. The images included prepubescent minors and sadistic or masochistic conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Inspection Service, HSI-Baltimore, Maryland State Police and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Zachary A. Myers, who prosecuted the case.
Rochester Man Sentenced on Drug Trafficking and Gun Possession ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Jose Guerra Caraballo, 43 of Rochester, NY, who was convicted of possession of cocaine with intent to distribute and possession of a firearm in the furtherance of a drug trafficking crime, was sentenced to 15 years in prison Chief U.S. District Judge Frank P. Geraci, Jr. The defendant was also ordered to forfeit two firearms and numerous rounds of ammunition seized at the time of his arrest.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that between November 2014 and January 2015, law enforcement officers investigated Caraballo and his brother, Jose Miguel Guerra. Controlled purchases of cocaine were arranged and completed between Caraballo and another person.On January 21, 2015, a person met Caraballo and Guerra to purchase cocaine, heroin and a firearm. The person was shown the firearm and told that they had to go get cocaine.
Caraballo and Guerra were surveilled leaving the area and then observed entering 264 Clifford Avenue in Rochester. They were subsequently arrested by members of the Rochester Police Department. During the search of the vehicle Caraballo and Guerra were in, officers recovered a ROHM. 38 Special revolver, 12 live rounds of .38 Special ammunition, approximately 12.5 grams of heroin, 33 grams of cocaine, marijuana and new/unused glassine bags.
Later that day, officers executed search warrants at 15 Bardin Street, a residence leased by Guerra, and 264 Clifford Avenue, locations identified during the investigation. Law enforcement recovered various items including, a firearm, ammunition, cash, drugs and drug paraphernalia.
During a post-arrest statement, Guerra told officers he and Caraballo picked up cocaine from a location, later identified to be 264 Clifford Avenue that day. Guerra was convicted of carrying a firearm during and in relation to a drug trafficking.
Today’s sentencing is the culmination of an investigation on the part of Rochester Police Department, under the direction of Chief Michael Ciminelli and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.Randolph County Resident Pleads Guilty to Methamphetamine OffenseRead the Press Release
On October 14, 2015, Randall A. Miller, 25, of Percy, pled guilty to one-count of conspiracy to distribute methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Evidence at the plea hearing established that Miller was involved with others in the distribution of Ice/methamphetamine. The offense occurred between 2013 and June 2015, in Perry, Jackson, and Randolph Counties. During his plea, Miller admitted that he was responsible for the distribution of more than 1.5 kilograms of Ice/methamphetamine. The methamphetamine offense carries a maximum penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Percy Police Department, Steeleville Police Department, Mascoutah Police Department, Illinois State Police Methamphetamine Response Team, DuQuoin Police Department, Pinckneyville Police Department, and Drug Enforcement Administration. The Randolph and Perry County State’s Attorney’s Offices also assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Randolph County Resident Pleads GuiltyRead the Press Release
On October 15, 2015, Jessie J. Sheridan, 34, of Steeleville, pled guilty to a one-count indictment charging conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Evidence at the plea hearing established that Sheridan was involved with others in the manufacture of methamphetamine. The offense occurred between 2013 and June 2014, in Jackson, Randolph, and Perry Counties. The methamphetamine offense carries a maximum penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine. Sheridan is currently being held without bond pending his January 16, 2016, sentencing hearing.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Randolph County Sheriff’s Office and Perry County Drug Task Force.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Owner of Pennsylvania Diet Supplement Business Sentenced to 30 Months Imprisonment for Selling Misbranded Drugs as Weight Loss Products over the InternetRead the Press Release
The U.S. Attorney’s Office of the Middle District of Pennsylvania announced today that Cheryl Floyd, age 52, of Harrisburg, Pennsylvania, owner of Floyd Nutrition LLC, was sentenced to 30 months in federal prison by U.S. District Court Judge Sylvia H. Rambo of the Middle District of Pennsylvania today in Harrisburg for introducing misbranded drugs into interstate commerce and money laundering. Judge Rambo also ordered Floyd to pay $10,000 in fines and $7,530 in restitution.
According to summaries presented to the court by Assistant U.S. Attorney Christy H. Fawcett of the Middle District of Pennsylvania in connection with the guilty plea and the sentencing hearing, Floyd, also known as Cheryl Floyd Brown, was the owner and operator of an internet-based business known as Floyd Nutrition LLC, based at her Harrisburg residence and with warehouse facilities in the Harrisburg area.
The items offered for sale between 2010 and 2014 were purported all-natural dietary supplements sold as weight loss products. They contained the drugs sibutramine and phenolphphthalein which are not listed as ingredients in the product labels.
According to the U.S. Food and Drug Administration (FDA), sibutramine was the active pharmaceutical ingredient in Meridia, a prescription weight loss drug removed from the market in 2010 following studies that showed increased instances of heart attack and stroke in the studied population. Phenolphphthalein was an over-the-county drug until 1999, when the FDA reclassified it as not generally safe because it posed a carcinogenic risk.
As a result of the health risks, the FDA detained shipments of the products coming from China intended for Floyd’s business. In July 2014, search warrants executed at locations used by Floyd’s business resulted in seizure of a large quantity of the products. The products were sold over the internet by Floyd under names such as Slim Trim U, ZXT Slim Bee Pollen, Magic Slim, ZXT Bee Pollen, ZXT Gold Infinity, Lean Body Extreme, Bnew Beauty and Body and Natural Body Solutions.
“Manufacturing and selling products marketed as ‘all-natural’ dietary supplements put U.S. consumers at risk of serious injury or death when they actually contain dangerous pharmaceutical ingredients,” said Director George M. Karavetsos of the FDA Office of Criminal Investigations. “We will continue working with our law enforcement partners to protect consumers from public health risks and fraud.”
“I would first like to commend the United States Attorney’s office and the FDA Office of Criminal Investigations for their fine work on this investigation,” said Special Agent in Charge Akeia Conner of Internal Revenue Service-Criminal Investigation (IRS-CI). “Today’s sentence, along with the seizure of over $1,000,000 in assets, sends a clear message to those considering similar conduct. The Internal Revenue Service-Criminal Investigation stands committed to providing the financial expertise in these investigations and uncovering the flow of money which is the lifeblood of any drug enterprise.”
Floyd pleaded guilty in May 2015 pursuant to a plea agreement that included an agreement to forfeit five properties in Harrisburg owned by the defendant, a 2014 Chevy truck and nine bank accounts. Three of the properties forfeited thus far have netted $1,016,943. Floyd is to surrender to the Federal Bureau of Prisons on Nov. 16, 2015.
This case was investigated by the FDA Office of Criminal Investigations, IRS-CI and the Dauphin County Drug Task Force, and was prosecuted by Assistant U.S. Attorney Fawcett.
Owner of Harrisburg Diet Supplement Business Sentenced to 30 Months Imprisonment for Selling Misbranded Drugs as Weight Loss Products over the InternetRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Cheryl Floyd, age 52, Harrisburg, owner of Floyd Nutrition LLC, was sentenced to 30 months in federal prison by United States District Court Judge Sylvia H. Rambo today in Harrisburg for introducing misbranded drugs into interstate commerce and money laundering. Judge Rambo also ordered Floyd to pay $10,000 in fines and $7,530 in restitution.
According to summaries presented to the court by Assistant U.S. Attorney Christy H. Fawcett in connection with the guilty plea and the sentencing hearing, Floyd, also known as Cheryl Floyd Brown, was the owner and operator of an internet-based business known as Floyd Nutrition LLC, based at her Harrisburg residence and with warehouse facilities in the Harrisburg area.
The items offered for sale between 2010 and 2014 were purported all-natural dietary supplements sold as weight loss products. They contained the drugs sibutramine and phenolphthalein which are not listed as ingredients in the product labels.
According to U.S. Food and Drug Administration (FDA) sibutramine was the active pharmaceutical ingredient in Meridia, a prescription weight loss drug removed from the market in 2010 following studies that showed increased instances of heart attack and stroke in the studied population. Phenolphthalein was an over-the-county drug until 1999 when FDA reclassified it as not generally safe because it posed a carcinogenic risk.
As a result of the health risks, the FDA detained shipments of the products coming from China intended for Floyd’s business. In July 2014, search warrants executed at locations used by Floyd’s business resulted in seizure of a large quantity of the products. The products were sold over the internet by Floyd under names such as Slim Trim U, ZXT Slim Bee Pollen, Magic Slim, ZXT Bee Pollen, ZXT Gold Infinity, Lean Body Extreme, Bnew Beauty and Body and Natural Body Solutions.
“Manufacturing and selling products marketed as ‘all-natural’ dietary supplements put U.S. consumers at risk of serious injury or death when they actually contain dangerous pharmaceutical ingredients,” said George M. Karavetsos, Director, FDA Office of Criminal Investigations. “We will continue working with our law enforcement partners to protect consumers from public health risks and fraud.”
Akeia Conner, Internal Revenue Service, Special Agent in Charge, said “I would first like to commend the United States Attorney’s office and the FDA Office of Criminal Investigations for their fine work on this investigation. Today’s sentence along with the seizure of over $1,000,000 in assets sends a clear message to those considering similar conduct. The Internal Revenue Service, Criminal Investigation stands committed to providing the financial expertise in these investigations and uncovering the flow of money which is the lifeblood of any drug enterprise.”
Floyd pled guilty in May 2015 pursuant to a plea agreement that included an agreement to forfeit five properties in Harrisburg owned by the defendant, a 2014 Chevy truck, and nine bank accounts. Three of the properties forfeited thus far have netted $1,016,943. Floyd is to surrender to the Federal Bureau of Prisons on November 16, 2015.
This case was investigated by the FDA Office of Criminal Investigations, Internal Revenue Service Criminal Investigations, and the Dauphin County Drug Task Force and prosecuted by Assistant U.S. Attorney Christy H. Fawcett.
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New York Man Sentenced to 19 Years Imprisonment for Robberies of Fast Food RestaurantsRead the Press Release
HARRISBURG - The United States Attorney's Office for the Middle District of Pennsylvania announced today that Maurice Lebron Davis, age 40, of Brooklyn, New York was sentenced to 19 years in federal prison by U.S. District Court Judge John E. Jones III today, as a result of his April 2015 conviction of eight counts of robbery or attempted robbery following a four day jury trial in Harrisburg.
According to United States Attorney Peter Smith, Davis was charged in an Indictment by a grand jury in February 2013. Davis robbed or attempted to rob fast food restaurants located in Cumberland, Dauphin and York counties between December 2011 and February 2012. For some of the robberies, Davis broke the drive-thru window and crawled inside, waiting for employees to arrive. For others, Davis accosted employees in the parking lot and forced them to let him into the restaurants. He would then demand they give him money, before fleeing the scene.
These cases were investigated by the Federal Bureau of Investigation, Pennsylvania State Police, and the police departments of Upper Allen, Middlesex, Carroll, Swatara, Lower Allen and Silver Spring Townships, and the Harrisburg Police Department. The case was prosecuted by Assistant United States Attorney Meredith A. Taylor.
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New Britain Man Pleads Guilty to Federal Escape ChargeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMES SCOTT, 37, formerly of New Britain, pleaded guilty today before U.S. District Judge Alvin W. Thompson in Hartford to one count of escape from federal custody.
According to court documents and statements made in court, on February 20, 2009, SCOTT received a federal sentence of 121 months of imprisonment for conspiring to distribute, and distributing, crack cocaine. On June 30, 2015, he was transferred from a federal prison to the Watkinson House Residential Reentry Center in Hartford to complete his sentence. At the time of his transfer to the Watkinson House RRC, SCOTT had a projected release date of December 26, 2015.
On August 14, 2015, SCOTT signed out from the Watkinson House RRC to conduct a job search, but did not return. He was apprehended on October 5, 2015, in Hartford by the U.S. Marshals Service and returned to custody.
Judge Thompson has scheduled sentencing for January 13, 2016, at which time SCOTT faces a maximum term of imprisonment of five years.
This matter was investigated by the U.S. Marshals Service and the Hartford Police Department, and is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Millennium Laboratories to Pay $256 Million to Resolve False Billing and Kickback ClaimsRead the Press Release
BOSTON – Millennium Health, formerly Millennium Laboratories, has agreed to pay $256 million to resolve allegations that it billed Medicare, Medicaid, and other federal health care programs for medically unnecessary drug testing and genetic testing, and provided kickbacks to physicians to induce business. Today’s announcement reflects two False Claims Act settlements between Millennium and the Department of Justice and an administrative settlement agreement between Millennium and the Department of Health and Human Services. Millennium, headquartered in San Diego, Calif., is one of the largest urine drug testing laboratories in the United States.
As part of today’s announced settlements, Millennium has agreed to pay $227 million to resolve False Claims Act allegations that it systematically billed federal health care programs for excessive and unnecessary drug testing from Jan. 1, 2008 through May 20, 2015. (A copy of the United States’ complaint, with exhibits, is available here.) The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being customized for individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs. Millennium’s use of the so-called “custom profile” led to the over-billing of federal health care programs which limit payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury. The United States also alleged that Millennium violated the Stark Law and Anti-Kickback Statute by providing physicians with free drug test cups on the express condition that the physicians return the specimens to Millennium for hundreds of dollars’ worth of additional testing.
Millennium has also agreed to pay $10 million to resolve allegations that it submitted false claims to federal health care programs for medically unnecessary genetic testing that was performed on a routine and preemptive basis, without an individualized assessment of need, from Jan. 1, 2012 through May 20, 2015. Routine genetic testing is not medically reasonable and necessary, and therefore does not qualify for Medicare reimbursement.
“Millennium promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs,” said Carmen M. Ortiz, United States Attorney for the District of Massachusetts. “A laboratory which knowingly conducts medically unnecessary testing operates unlawfully and squanders our precious federal health care resources.”
“The Department of Justice is committed to ensuring that laboratory testing, including drug testing, is ordered based on each patient’s medical needs and not for physician or laboratory profit,” said Benjamin Mizer, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “Millennium’s promotion of excessive, non-patient specific test ordering—and its test cup giveaways to physicians to increase that ordering—resulted in significant unnecessary costs being imposed upon our nation’s health care programs.”
“When corporations, such as Millennium, bill Medicare for medically unnecessary tests, they threaten the financial integrity of public healthcare programs,” said Special Agent in Charge Harold H. Shaw of the Boston Division of the Federal Bureau of Investigation. “The FBI hopes this settlement will send a strong message that fraudulent practices by medical labs will not be tolerated.”
In connection with False Claims Act settlements, Millennium has entered into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General.
“This company has taken the first step toward demonstrating a commitment to compliance by agreeing to make significant changes to its board of directors,” said Inspector General Daniel R. Levinson of HHS-OIG. “Most of the board will be comprised of new independent members. Under the five-year CIA, OIG will monitor the company’s compliance efforts under this new leadership.”
Today’s announcement also includes a $19 million settlement between Millennium and the Centers for Medicare and Medicaid Services (CMS) to resolve administrative actions regarding Millennium’s claims to Medicare for certain drug test billing codes. These claims were the subject of claim denials and an overpayment action initiated by CMS and its contractors.
The False Claims Act settlements resolve allegations originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The United States filed its False Claims Act complaint on the urine drug testing allegations after intervening in consolidated complaints filed under the qui tam, or whistleblower provisions of the False Claims Act by Mark McGuire, Ryan Uehling, and Omni Healthcare Inc. The genetic testing allegations were also filed in a qui tam complaint filed by Omni Healthcare Inc. In connection with today’s announced settlements, whistleblowers will receive fifteen percent of the federal recovery from the urine drug testing False Claims Act settlement and sixteen and one half percent of the federal recovery from the genetic testing False Claims Act settlement.
The investigation was conducted by the Federal Bureau of Investigation; the Department of Health and Human Services, Office of Inspector General; CMS; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel and Management, Office of Inspector General; and the United States Postal Inspection Service. The cases were handled by Assistant U.S. Attorneys George Henderson, Abraham George, and Sonya Rao of Ortiz’s Civil Division and Trial Attorneys Douglas Rosenthal and Augustine Ripa of the Justice Department’s Civil Division, Commercial Litigation Branch.
Millennium Health Agrees to Pay $256 Million to Resolve Allegations of Unnecessary Drug and Genetic Testing and Illegal Remuneration to PhysiciansRead the Press Release
Millennium Health, formerly Millennium Laboratories, has agreed to pay $256 million to resolve alleged violations of the False Claims Act for billing Medicare, Medicaid and other federal health care programs for medically unnecessary urine drug and genetic testing and for providing free items to physicians who agreed to refer expensive laboratory testing business to Millennium, the Justice Department announced today. Millennium, headquartered in San Diego, is one of the largest urine drug testing laboratories in the United States and conducts business nationwide.
“The Department of Justice is committed to ensuring that laboratory tests, including drug and genetic tests, are ordered based on each patient’s medical needs and not just to increase physician and laboratory profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will not tolerate practices such as the ordering of excessive, non-patient specific tests and the provision of inducements to physicians that lead to unnecessary costs being imposed upon our nation’s health care programs.”
As part of today’s announced settlements, Millennium has agreed to pay $227 million to resolve False Claims Act allegations, detailed in a complaint filed by the United States, that Millennium systematically billed federal health care programs for excessive and unnecessary urine drug testing from Jan. 1, 2008, through May 20, 2015. The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being tailored to individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs. This practice violated federal healthcare program rules limiting payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury. The United States also alleged that Millennium’s provision of free point of care urine drug test cups to physicians—expressly conditioned on the physicians’ agreement to return the urine specimens to Millennium for hundreds of dollars’ worth of additional testing—violated the Stark Law and the Anti-Kickback Statute. The Stark Law and the Anti-Kickback Statute generally prohibit laboratories from giving physicians anything of value in exchange for referrals of tests.
Millennium has also agreed to pay $10 million to resolve False Claims Act allegations that it submitted false claims to federal health care programs from Jan. 1, 2012, through May 20, 2015, for genetic testing that was performed routinely and without an individualized assessment of need.
“Millennium allegedly promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts. “A laboratory that promotes and knowingly conducts medically unnecessary drug testing operates unlawfully and squanders our precious federal health care resources.”
In connection with the False Claims Act settlements, Millennium has also entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG). In addition, Millennium will pay $19.2 million to the Centers for Medicare and Medicaid Services (CMS) to resolve certain administrative actions related to Millennium’s urine drug test billing practices.
“This company has taken the first step toward demonstrating a commitment to compliance by agreeing to make significant changes to its board of directors,” said Inspector General Daniel R. Levinson of HHS-OIG. “Most of the board will be comprised of new independent members. Under the five-year CIA, OIG will monitor the company’s compliance efforts under this new leadership.”
“CMS is committed to exercising quick and effective oversight to protect Medicare beneficiaries and the Medicare Trust Fund,” said Acting Administrator Andy Slavitt for CMS. “The resolution of this case is the result of the important partnership between CMS and the Department of Justice.”
The False Claims Act allegations resolved were originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. Under the act, the United States can elect to intervene in an action filed by a whistleblower, as it did, in part, with respect to several of the qui tam actions regarding urine drug testing allegations. The whistleblowers will receive $30.35 million from the False Claims Act recovery for the urine drug testing claims and $1.48 million from the False Claims Act recovery for the genetic testing claims.
The government’s pursuit of the claims resolved by the settlements illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $25.3 billion through False Claims Act cases, with more than $16.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was conducted by the Civil Division’s Commercial Litigation branch, the U.S. Attorney’s Office of the District of Massachusetts, HHS-OIG and HHS’ Office of the General Counsel, CMS, the Office of Personnel and Management Office of Inspector General, the U.S. Postal Service Office of Inspector General, the Department of Veterans Affairs and the FBI.
The cases that will be dismissed as part of the settlements are captioned United States ex rel. McGuire v. Millennium Laboratories, Inc., No. 12-cv-10132 (D. Mass.), United States ex rel. Uehling v. Millennium Laboratories, Inc. et al., No. 12-cv-10631 (D. Mass.), United States ex rel. Omni Healthcare Inc. v. Millennium Laboratories, Inc., No. 13-cv-10825 (D. Mass.), United States, et al., ex rel. Estate of Robert Cunningham v. Millennium Laboratories of California, Inc., No. 09-cv-12209 (D. Mass.); United States, et al., ex rel. Wendy Johnson v. Millennium Laboratories, Inc., No. 12-cv-12387 (D. Mass.), United States ex rel. Allstate Insurance Co. and Lawrence K. Spitz, M.D. v. Millennium Laboratories, Inc., No. 14-cv-14276 (D. Mass.), United States ex rel. Amadeo Pesce, Ph.D. v. Millennium Health, No. 15-cv-10821 (D. Mass.), and United States ex rel. Omni Healthcare Inc. v. Millennium Laboratories, Inc., No. 14-cv-13052 (D. Mass.).
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Michigan Man Sentenced to 13 Years in Prison for Fraud and Aggravated Identity Theft by Using Fake Charitable OrganizationsRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Michigan man was sentenced in Federal Court in Anchorage for making numerous false statements, identity theft and engaging in a scheme to operate fake charitable organizations.
Alan Michael Bartlett, 46, of Owosso, Michigan, was sentenced by Chief United States District Judge Ralph R. Beistline to 13 years in prison and five years of supervised release for two counts of mail fraud, 20 counts of bank fraud, five counts of wire fraud, five counts of false statements to the U.S. Postal Service, and five counts of aggravated identity theft. Bartlett was convicted by a jury on July 27, 2015.
According to Assistant U.S. Attorney Retta Randall, who prosecuted the case, and the evidence presented at trial, Bartlett had established two businesses, United States Disabled Veterans, LLC, and United States Handicapped-Disadvantaged Services, LLC, whose alleged mission was “to help provide real jobs for disabled & disadvantaged Americans.” The companies claimed to sell products for donations, the orders for which would “provide jobs for the handicapped.” There were no “jobs,” and the donations received did not go to veterans or the disabled and disadvantaged. Instead, these companies were used by Bartlett between December 2009 and December 2012, in a scheme to defraud individuals and financial institutions in Alaska and elsewhere, and obtain additional monies belonging to individual donors.
The evidence at trial showed that Bartlett solicited donations through telemarketing calls and through the mailing of brochures from his companies. Upon the receipt of small donations by check, Bartlett created counterfeit demand drafts using information printed on the solicited checks, including the financial institution name, financial institution routing number, and associated customer account number. He then negotiated the counterfeit demand drafts via fraudulent electronic payment transactions for his personal financial gain and benefit - investing in his E*Trade accounts, paying credit card bills, paying for Verizon Wireless telephone service, and paying on his defaulted student loan with the United States Department of Education. He also submitted forged power of attorney forms with falsified notary seals to the financial institutions in an effort to get transactions that had been reversed by the financial institution for fraud, credited back to him.
Bartlett used personal identifying information obtained from people who sent donations thinking they were giving to charitable organizations, to submit false change of address requests to the United
States Postal Service. He forged the signatures on the change of address requests and listed the street address of his residence in Owosso, MI, as the forwarding address. As a result, he received investment and financial information which should have gone directly to donors/victims.
Using the fabricated persona of a municipal law enforcement detective, Bartlett contacted one victim by telephone to dissuade the victim from reporting or providing additional information about Bartlett’s scheme to law enforcement.
Bartlett learned about the telemarketing business and obtained donor call lists when employed by telemarketing companies in Arizona in 2008; those companies were shut down in 2009 by the Federal Trade Commission for making false representations that they were charities and that donations/purchases would go to help handicapped or disabled people
Prior to imposing sentence, Judge Beistline stated that Bartlett was “truly a danger to the community.” Bartlett preyed on “the innocent, the elderly, and the ill, and showed no remorse.” Bartlett had attempted to obtain the pension benefits of an elderly man with Alzheimer’s and to access a bank account of another with dementia.
Ms. Loeffler commends the U.S. Postal Inspection Service for the investigation of this case. Anthony Galetti, Inspector in Charge of the U.S. Postal Inspection Service stated, “Today’s sentencing shows that any criminals who use the U.S. Mail to commit fraud will be caught and prosecuted. All of our fraud cases are important; however, instances like this case when the fraudster chose victims who are elderly are a priority for Postal Inspectors.”
Mexican National Sentenced to Ten Years for Child PornographyRead the Press Release
Luis Armando Moreno-Ayala, 35, a national of Mexico, was sentenced in federal court Monday, October 19, 2015, in Omaha, Nebraska, for receiving child pornography. The Honorable Laurie Smith Camp, Chief United States District Court Judge, sentenced Moreno-Ayala to a ten-year term of imprisonment. There is no parole in the federal system. After his release from prison, Moreno-Ayala will begin a five-year term of supervised release and most likely will be deported from the United States. Moreno-Ayala was further ordered to pay restitution in the sum of $3,000.
Moreno-Ayala was previously deported from the United States. On September 30, 2013, officers with the FBI Cyber Crimes Task Force were investigating individuals sharing child pornography over the internet. The investigation resulted in a search warrant at a Sarpy County home where Moreno-Ayala rented a room. Forensic analysis of Moreno-Ayala’s hard drives revealed more than 900 videos and 1,200 images of child pornography. These images included toddlers and preteens engaged in sexual acts to include bondage.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Federal Bureau of Investigation and the Sarpy County Sheriff’s Office.
Mexican National Guilty of Sierra Marijuana Cultivation OperationRead the Press Release
FRESNO, Calif. — Ezequiel Armas-Ortiz (Armas), 49, of Michoacán, Mexico, pleaded guilty today to conspiracy and to manufacturing and possessing with intent to distribute marijuana in connection with a large-scale cultivation operation in the Brush Creek drainage in the Sequoia National Forest in Tulare County, United States Attorney Benjamin B. Wagner announced.
According to court documents, Armas and two other men charged with him were responsible for watering 2,719 marijuana plants at the grow site. The marijuana cultivation activities caused extensive damage to the land and natural resources. Trees and plants, newly generated following the 2002 McNally Fire, were cut down to make room for the marijuana. Water was diverted from a nearby stream that supports trout. Armas also agreed to make restitution to the U.S. Forest Service for the damage caused by his wrongful conduct.
Armas is scheduled for sentencing on January 19, 2016. He faces a maximum statutory penalty of 20 years in prison and a $1 million fine. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables. Armas is also subject to deportation to Mexico after serving any term of imprisonment imposed.
This case is the product of an investigation by the U.S. Forest Service, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the California National Guard, the California Department of Fish and Wildlife, and Tulare County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.
Methamphetamine distribution conspiracy dismantled in Southwestern IndianaRead the Press Release
Terre Haute –United States Attorney Josh J. Minkler today announced charges against seven individuals involved in a methamphetamine conspiracy reaching from Indianapolis to Lawrenceville, Illinois.
“Methamphetamine has been a scourge on our Central Indiana communities for too long,” said Minkler. “Those who choose to violate the law by selling illegal drugs will be held strictly accountable and face the hammer of federal prosecution.”
Those indicted for conspiracy to distribute methamphetamine include:
Julius I. Weldon, a/k/a Joc, 41, Indianapolis, In.
Shevockus L. Swing, a/k/a Vock, a/k/a Little Homie, 27, Vincennes, In.
Jason Davis, a/k/a, Big Homie, 32 Bruceville, In.
James T. Western, a/k/a Country, 46, Lawrenceville, Il.
Donta Henderson, 35, Vincennes, In.
Justin Swain, 36, Lawrenceville, Il.
Tammy Gillespie, 34, Lawrenceville, Il.
According to the indictment, Julius Weldon was the source of supply, receiving his methamphetamine from Arizona. The packages of methamphetamine were delivered by UPS and FedEx to Weldon’s home in Indianapolis. Weldon distributed his drugs to Swing, Davis, and Western. Western would then distribute to Swain and Gillespie for redistribution in the Lawrenceville, Illinois area. Henderson was a drug runner for Weldon to other locations in central Indiana.
This case was investigated by the Drug Enforcement Administration, Indiana State Police, Illinois State Police, Daviess County Sheriff’s Department, Knox County Sheriff’s Department and the Lawrence County Illinois Prosecutor’s Office.
Weldon remains a fugitive but the other defendants had their initial appearance in federal court in Terre Haute on Friday, October, 16, 2015, and were all detained. Their detention hearing is scheduled for October 21, 2015, at the Terre Haute Federal Courthouse.
According to Chief of the Drug and Violent Crime Unit Bradly A. Blackington, who is prosecuting this case for the government, all could face up to twenty years in prison if convicted.
An indictment is only a charge and not evidence of guilt. A defendant is presumed innocent and entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Leader in Credit Card Fraud Scheme Sentenced to over 8 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Christopher V. Johnson, age 24, formerly of New York, today to 102 months in prison, followed by five years of supervised release, for bank fraud conspiracy and aggravated identity theft. Judge Bredar also entered an order requiring Johnson to pay restitution of $155,515.33.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; U.S. Marshal Johnny Hughes; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Fairfax County, Virginia, Police Chief Edwin C. Roessler, Jr.; Easton Police Department Chief David A. Spencer; Anne Arundel County Police Chief Tim Altomare; and Talbot County State’s Attorney Scott G. Patterson.
According to Johnson’s plea agreement, from at least the winter of 2012 through July 2014, Johnson conspired with Wanisha D. Coates, Lakriesha Coates, Domenique Miller, Sheardwood Michel, Shamika Earle and others to create counterfeit credit cards, using stolen or otherwise compromised credit and debit card numbers belonging to others. They encoded the stolen account information onto credit and stored value cards which were then used to obtain money and credit from banks and credit unions. These proceeds were used to buy consumer products, including designer shoes by Gucci, Louis Vuitton and Christian Louboutin, and designer clothes from Neiman Marcus.
On November 2, 2012, Johnson and Wanisha and Lakriesha Coates used altered credit cards to make fraudulent purchases at a Target in Fairfax, Virginia. Johnson was arrested and convicted in Fairfax County, Virginia for credit card fraud. Wanisha Coates was also arrested and charged in Fairfax County, but failed to appear for her court hearing. A bench warrant was issued for her arrest.
On April 2, 2013, Johnson and Wanisha Coates were stopped by a Maryland State Trooper for a traffic violation in Centreville, Maryland. The Trooper smelled burnt marijuana and searched the vehicle, seizing several gift cards, credit cards and “ReloadIt” stored value cards that were altered and rewritten with compromised account information.
On January 11, 2014 Easton Police officers arrested Johnson and Miller after they tried to buy multiple gift cards at a Staples store in Easton. A number of credit cards fraudulently re-encoded with stolen or compromised account information were seized, along with a small amount of marijuana. Miller advised police that his girlfriend was staying at an Easton motel. Officers arrived at the motel room and were overwhelmed by the odor of raw and burnt marijuana as they entered. Present inside the room were the girlfriend and Wanisha Coates. Coates identified herself as “Wanda C. Redd,” who is in fact her mother. Officers seized 44 credit or stored value cards, many of which had been fraudulently altered. Johnson had used one of the fraudulently altered cards to make over $200 in purchases at a drug store in Easton. Of the 108 cards seized from Johnson, Miller and Coates on January 11, approximately 88 were found to be rewritten with stolen credit card/bank card account information. Many of the cards had been altered so that the last four digits appearing on the front of the card matched the last four digits of the stolen account number rewritten on the magnetic strip of the card.
Johnson was released from custody in Talbot County on January 12, 2014. That same day, someone logged-in to Johnson’s account and unsuccessfully attempted to remotely erase the date on Johnson’s iPhone, which was in the custody of law enforcement.
On March 13, 2014, Anne Arundel County Police responded to a call from a man at a motel in Linthicum, Maryland, later identified as Johnson, who said he had been cut in the face with a knife by Wanisha Coates. Police found Johnson and Coates outside of their motel room attempting to leave. Police seized approximately 27 credit and gift cards, some visibly altered, and a device for reading, erasing and writing data on magnetic strips of credit cards. At least 13 of the seized credit cards and gift cards had been reencoded with account information that did not match the numbers appearing on the front of the cards.
Between June 30 and July 7, 2014, Johnson, Michel and another conspirator made numerous purchases in New Jersey using fraudulently reencoded credit and stored value cards. On July 14, 2014, Johnson was driving in Lyndhurst, New Jersey, when a police officer attempted to pull him over. When the officer got out of his patrol car, Johnson pulled away and police gave chase. After Johnson struck a small tree, police ordered him out of the vehicle, but Johnson accelerated in reverse, sideswiping a police vehicle and drove for several blocks before bailing out of the car. Johnson ran through several back yards before being arrested by officers. Johnson was charged and officers seized marijuana, a tablet computer, two cell phones, a receipt for a $624 wire transfer, and numerous credit and gift cards, at least one of which was visibly tampered with. Johnson’s New Jersey state charges are still pending.
On July 23, 2014 the U.S. Marshals Service Regional Fugitive Task Force located Coates, who had fled from federal pretrial supervision in June 2014, at a motel in Belleville, New Jersey. Task force officers arrived at the motel room, which smelled strongly of burnt marijuana, and arrested Coates. Officers seized marijuana, a credit card embossing device, electronics, and approximately 100-150 stored value cards or credit cards, some of which had been fraudulently re-encoded with stolen credit card information.
On March 10, 2015, while Johnson was an inmate at the Chesapeake Detention Facility in Baltimore, he made several calls to Earle. Johnson was being held there pending his initial appearance and arraignment on his federal charges. During the calls, which were recorded, Johnson asked Earle if she was with Michel, and if she would get him money orders for his commissary account. During the call, Johnson told Earle to purchase the money orders with gift cards obtained using stolen credit card account information. Earle advised that she already had three $100 money orders purchased with fraudulently obtained gift cards. Johnson asked Earle to try to get another gift card purchased with stolen credit card information, in order to get him another money order. In a later call, Johnson asked Earle to get him money orders for $85 because they cleared into his commissary account faster. Earle confirmed that Michel was with her and they would get additional money orders for Johnson.
Earle and Michel were arrested on March 12, 2015, after engaging in numerous fraudulent transactions using cards encoded with stolen credit card information at a department store in Towson, Maryland. At the time of their arrest, Michel possessed 26 fraudulently reencoded cards and Earle possessed 15 fraudulently reencoded cards. Earle also had four money orders in Johnson’s name – three for $100 and one for $85. The money orders had all been purchased with prepaid debit cards that had been purchased using stolen credit card information.
The loss attributable to Johnson during the course of the conspiracy is between $120,000 and $200,000, and involves more than 250 victims.
Co-conspirator Sheardwood H. Michel, age 26, of St. Albans, New York, and Shamika C. Earle, age 25, of Deer Park, New York, pleaded guilty to their roles in the scheme and are scheduled to be sentenced on October 26 and 27, respectively.
Wanisha D. Coates, age 26, and Lakriesha Coates, age 25, both of Baltimore, Domenique R. Miller, age 21, of Newnan, Georgia, previously pleaded guilty to their participation in the scheme and were sentenced to four years in prison, a year and a day in prison, and time served, respectively.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the HSI Baltimore, U.S. Secret Service, U.S. Marshals Service, Easton Police Department, Maryland State Police, Anne Arundel County Police Department, Fairfax (Virginia) County Police Department, Talbot County State’s Attorney’s Office and the U.S. Marshals Service Regional Fugitive Task Force for their work in the investigation and related prosecution. Mr. Rosenstein praised the Fairfax County (Virginia) Commonwealth’s Attorney’s Office and Lyndhurst (New Jersey) Police Department for their assistance in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorney Zachary A. Myers, who prosecuted the case.
Larry Thomas Williams Sentenced to 140 Months on Large Scale Marijuana Conspiracy ConvictionRead the Press Release
GREENEVILLE, Tenn. – On Oct. 19, 2015, Larry Thomas Williams, 67, of Mendota, Va., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 140 months in federal prison for his role in an extensive marijuana distribution conspiracy centered in the Eastern District of Tennessee and Western District of Virginia, with sources of supply in and around the Los Angeles, Cal., area.
According to the plea agreement on file with the U.S. District Court, Williams admitted to selling ounce quantities of marijuana in May and June 2007, to an individual working on behalf of law enforcement in Russell County, Va. He admitted to conspiring to distribute marijuana for many years in the Eastern District of Tennessee. In a recorded July 2013 meeting in Bristol, Va., Williams told an individual working with law enforcement that he had hauled marijuana for the last 17 years and that he was interested in purchasing up to 50 pounds of marijuana at a time. He discussed, with this same individual, the best times of the day to transport marijuana and the fact that Tennessee was making it hard on smugglers. Williams also admitted to dealing in marijuana with one particular co-conspirator for 10 years, to which he owed a drug debt. However, since that individual was now deceased, he considered the debt to be severance pay. He further admitted to knowing the location of 256 pounds of marijuana that has been missing since this co-conspirator passed away.
Law enforcement agencies participating in the investigation which led to the indictment and subsequent conviction of Larry Thomas Williams include the Tennessee Bureau of Investigation, IRS Criminal Investigation Division, Second District Judicial Drug Task Force, Kingsport Police Department and Russell County, Virginia Sheriff’s Office. Assistant U.S. Attorney Wayne Taylor represented the United States.
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Jury Convicts Four in Pill Mill Operation Run by Plano AnesthesiologistRead the Press Release
DALLAS — Following a nine-day jury trial before Chief U.S. District Judge Jorge A. Solis, a federal jury has convicted a physician and three co-conspirators on felony offenses stemming from their operation of a pill mill and drug distribution conspiracy they ran in Dallas from January 2012 to early December 2013. The announcement was made this morning by U.S. Attorney John Parker of the Northern District of Texas.
Licensed anesthesiologist Theodore E. Okechuku, 59, of Plano, Texas; Emmanuel C. Iwuoha, 52, of Allen, Texas; Elechi N. Oti, 50, of Augusta, Georgia; and Kelvin L. Rutledge, 43, of Dallas; were each convicted late Friday on one count of conspiracy to unlawfully distribute a controlled substance. Okechuku was convicted of using, carrying and brandishing a firearm in relation to a drug trafficking crime. Okechuku was also convicted on conspiracy to use, carry, and brandish a firearm during and in relation to a drug trafficking crime.
Three co-conspirators, all from Dallas, pleaded guilty before trial. Ignatius O. Ezenagu, 57; David L. Reed, 44; and Jerry K. Reed, 45; each pleaded guilty to one count of conspiracy to unlawfully distribute a controlled substance. Ezenagu also pleaded guilty conspiracy to brandish a firearm in relation to a drug trafficking crime
The drug trafficking conspiracy count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. The firearm conspiracy count carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine, and each substantive firearm offense carries a maximum statutory penalty of life in federal prison and a $250,000 fine. Sentencing is set for January 26, 2016.
The government presented evidence at trial that Okechuku owned and operated, with the assistance of coconspirator Ezenagu, Medical Rehabilitation Clinic (MRC). MRC was initially located at 9304 Forest Lane in Dallas, and then later, the defendants moved MRC to 9205 Skillman Street in Dallas.
MRC operated as a “pill mill,” in that it functioned as a place to unlawfully obtain controlled substances, such as hydrocodone, and not as a medical facility. Okechuku and business manager Ezenagu charged cash only for office visits in exchange for unlawful hydrocodone prescriptions.
The coconspirator drug dealers, including David Reed and his brother Jerry Reed, along with Rutledge, recruited “patients,” often from homeless shelters, and drove them in groups to MRC. On a daily basis, these dealers brought multiple patients at a time to MRC. They would escort the patients into the clinic and coordinate their office visits with Ezenagu.
Often, dealers filled out patient information for the recruits they brought to the clinic. Dealers paid cash for the office visits of their patients, and handed the money to their patients before they entered the clinic, gave it to them in MRC’s waiting room, or paid the employees directly. MRC had a caged cash room where people would pay for the office visit with money provided by the dealers, by handing the money through an opening in the bars to a clinic employee. Large amounts of cash, often more than $5,000, passed through the clinic’s drug trafficking business on a daily basis.
Okechuku and Ezenagu conspired to employ armed security guards to protect the business, its employees, and the dealers. These armed security guards displayed and brandished various firearms on their waists for all to see in order to deter violence by the “patients” and to protect the illicit drug money from robbery.
Okechuku rarely saw patients, but delegated that task to licensed physician assistant and coconspirator Oti or to Emmanuel Iwuoha, who held no medical or nursing license in Texas, but acted as a doctor, using Okechuku’s signature and DEA prescription authority. In fact, at MRC, Okechuku, Oti, and Iwuoha were referred to as “Doctor,” regardless of medical license.
Oti, Iwuoha, and at times, Okechuku, would do little to no physical examination and prescribe controlled substances, including hydrocodone, a Schedule III controlled substance at the time. Patient visits were short and they would normally leave with a 30-day prescription (120 pills) or more of hydrocodone, along with other prescriptions. Okechuku, Oti, and Iwuoha diagnosed the majority of the patients with back pain, regardless of their true condition. Hydrocodone was prescribed regardless of a patient’s need, or lack thereof.
Once the patients received the prescriptions at MRC, the coconspirator dealers would drive the groups of patients to various pharmacies to get the prescriptions filled. The dealers would also furnish the money to pay for the narcotics. Sometimes, the dealers did not need the patients to pick up the prescriptions as some pharmacies gave the hydrocodone directly to the dealers. After the prescriptions were filled, the patients gave the pills to the dealers, who then sold the pills on the street for a profit.
The FBI, Dallas Police Department and Mesquite Police Department investigated. Assistant U.S. Attorneys Kate Pfeifle and Russ Fusco, and Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay prosecuted.
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Jury Convicts Catskill Man and Coxsackie Woman of Benefits FraudRead the Press Release
ALBANY, NEW YORK – A jury on Friday voted to convict John W. Caltabiano, Jr., age 48, of Catskill, and Colleen J. McCarten, age 43, of Coxsackie, of conspiracy to commit mail fraud, five counts of mail fraud, and theft of government property, announced United States Attorney Richard S. Hartunian and Edward J. Ryan, Special Agent-In-Charge of the Social Security Administration (SSA) Office of the Inspector General.
The jury reached a verdict on October 16, after a two-week trial. Caltabiano and McCarten face up to 20 years in prison on each of the conspiracy and mail fraud counts, and a maximum of 10 years of imprisonment on the theft of government property count. United States District Judge Mae A. D’Agostino is scheduled to sentence them on February 18, 2016.
Between April 2008 and October 2010, Caltabiano and McCarten conspired to steal Social Security Disability and Workers’ Compensation benefits by falsely presenting Caltabiano as completely blind to the SSA, the New York State Workers’ Compensation Board and Travelers Insurance. Surveillance videos showed Caltabiano driving, shopping and otherwise moving about without assistance.
“The jury’s verdict holds the defendants accountable for pretending that one of them was completely blind in order to increase his Social Security Administration and workers’ compensation benefits,” stated U.S. Attorney Richard S. Hartunian. “My office will continue to work with the Social Security Administration’s Office of the Inspector General to ensure that such deceit does not pay.”
“We applaud the jury’s verdict and the successful efforts of the U.S. Attorney’s Office and the Social Security Administration’s Office of General Counsel in bringing this case to justice,” stated Edward J. Ryan, Special Agent-In-Charge of the SSA Office of the Inspector General. “As guardians of the public trust, our office will continue to investigate SSA beneficiaries who feign their medical conditions and submit false documentation to the SSA. Our successful criminal prosecutions protect the SSA trust funds for those who truly deserve disability benefits.”
This case was investigated by the Social Security Administration Office of the Inspector General and the New York State Workers’ Compensation Board, and is being prosecuted by Assistant U.S. Attorney Jeffrey C. Coffman and Special Assistant U.S. Attorney Jason W. White.
Investment Advisor Charged with Bilking Clients Out of Nearly $2 MillionRead the Press Release
PHILADELPHIA - Michael Donnelly, 47, of Lecanto, Florida was charged today by information in an investment scheme that bilked his friends and clients of nearly $2 million, announced United States Attorney Zane David Memeger. Donnelly is charged with one count of wire fraud and with one count of securities fraud.
Donnelly was an investment advisor and registered representative who served as president of Donnelly, Steen & Company, doing business as Coastal Investment Advisors, Inc., Coastal Equities, Inc., and Donnelly Advisors Group, which he also owned. According to the information, between November 2007 and August of 2014, Donnelly persuaded about a dozen investors, many of whom were senior citizens, to allow him to invest their money in securities or certificates of deposit. It is alleged that instead of investing his clients’ money, Donnelly appropriated the investment funds for his own use.
The information further alleges that Donnelly provided at least one client with brokerage account statements belonging to another client who held dozens of large cap stocks in an effort to conceal that he had appropriated the monies for his own use. When an investing couple asked Donnelly for their funds, he allegedly persuaded another investor to partially liquidate an annuity under the guise that there was an opportunity to buy out another investor. He then allegedly intended to use those funds to pay the investing couple rather than buying out an investment held by another client.
In a parallel action, the Securities and Exchange Commission today announced a civil settlement with Donnelly relating to the same conduct.
If convicted the defendant faces a maximum possible sentence of 40 years in prison, not more than three years of supervised release, a $5.25 million fine and a $200 special assessment.
The case was investigated by the FBI with assistance from the Securities and Exchange Commission Division of Enforcement. It is being prosecuted by Assistant U.S. Attorney Linwood C. Wright, Jr.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Illinois Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
Lonnie C. Mathenia, a 50-year old, Granite City, Illinois, man was sentenced on October 16, 2015, in federal district court in East St. Louis, Illinois, for Failure to Register as a Sex Offender, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Mathenia was sentenced to 15 months in prison; 5 years’ supervised release, and ordered to pay a $100 special assessment.
After Mathenia registered as a sex offender in Granite City, Illinois, on May 6, 2014, a compliance check was conducted on June 3, 2014, by Granite City, Illinois, Police Department officers to verify Mathenia’s listed address. Law enforcement officials learned that Mathenia had been stopped and arrested for hitchhiking in Shawnee County, Kansas, on June 17, 2014, arrested for trespassing in Cheyenne County, Colorado, on July 28, 2015, and arrested for trespassing in Conway, Arkansas, on September 24, 2015. During this time, Mathenia neither registered as a sex offender in any of these jurisdictions nor updated his registration in the State of Illinois, as required under the Sex Offender Registration and Notification Act (SORNA). Mathenia was convicted of Possession of Child Pornography in 2014 in Madison County, Illinois.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The case was investigated by the United States Marshals Service and the Granite City Police Department. The case was prosecuted by Assistant United States Attorneys Angela Scott and Daniel T. Kapsak.
Harrisburg Man Sentenced to 12 Years Imprisonment for Distribution of Heroin and CocaineRead the Press Release
HARRISBURG - The United States Attorney's Office for the Middle District of Pennsylvania announced today that Nicholas Rivera, age 41, of Harrisburg, Pennsylvania was sentenced to 12 years in federal prison today by United States District Court Chief Judge Christopher C. Conner, in Harrisburg for drug trafficking.
According to United States Attorney Peter Smith, Rivera pleaded guilty to a superseding information in June 2015 that charged him with distribution and possession with intent to distribute a controlled substance. The charges against Rivera were a result of Rivera selling heroin and cocaine to an undercover trooper in Harrisburg on five separate occasions from March 2014 through May 2014. Following Rivera’s arrest, the Pennsylvania State Police executed a search warrant on Rivera’s residence on Crescent Street in Harrisburg, PA and recovered approximately $8,000 hidden in a floor vent, along with other evidence of drug trafficking.
This case was investigated by the Drug Enforcement Administration, the Pennsylvania State Police and the Dauphin County Drug Task Force. This case was prosecuted by Assistant United States Attorney Meredith A. Taylor.
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Guyanese Woman Pleads Guilty to Trafficking in Counterfeit Credit Cards and Aggravated Identity TheftRead the Press Release
ALBANY, NEW YORK – Georgette Jackman, age 37, a citizen of Guyana, pleaded guilty on October 16 to conspiracy to commit access device fraud, aggravated identity theft, and trafficking in counterfeit access devices, announced United States Attorney Richard S. Hartunian and Todd Laster, Special Agent in Charge of the Buffalo Field Office of the U.S. Secret Service.
Jackman was detained pending sentencing, which is scheduled for February 18, 2016 in Albany before United States District Judge Mae A. D’Agostino. She faces up to 15 years of imprisonment on the conspiracy and trafficking charges, and a mandatory two years of imprisonment on the aggravated identity theft charge, which must be served consecutive to any other sentence of imprisonment. Jackman also faces deportation from the United States following the completion of her punishment.
As part of her guilty plea, Jackman admitted that from February 2012 through January 2013, she and co-conspirators Jamese Williams and Terry Nicholas travelled together by car on a regular basis to stores throughout New York, Massachusetts, New Hampshire, Vermont and Connecticut, including approximately 47 Price Chopper grocery stores. During these trips Jackman provided Williams and Nicholas with hundreds of counterfeit credit cards bearing stolen account numbers and embossed names that did not correspond to the actual account holders. Williams and Nicholas used these cards to purchase $435,465 worth of gift cards, which they gave to Jackman.
This case was investigated by the Secret Service and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Glastonbury Man Pleads Guilty to Structuring Financial TransactionsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAVID E. RAYMOND, 74, of Glastonbury, pleaded guilty today before U.S. District Judge Janet Bond Arterton in New Haven to structuring financial transactions.
Federal law requires all financial institutions to file a Currency Transaction Report (CTR) for currency transactions that exceed $10,000. To evade the filing of a CTR, individuals will often structure their currency transactions so that no single transaction exceeds $10,000. Structuring involves the repeated depositing or withdrawal of amounts of cash less than the $10,000 limit, or the splitting of a cash transaction that exceeds $10,000 into smaller cash transactions in an effort to avoid the reporting requirements. Even if the deposited funds are derived from a legitimate means, financial transactions conducted in this manner are still in violation of federal criminal law.
According to court documents and statements made in court, RAYMOND purchased rock and roll memorabilia for a doctor who owned a medical practice. RAYMOND’s friend, Andrea Dobrozensky, was the office manager for the medical practice and also paid the doctor’s personal expenses. For purchases of items for the doctor in amounts greater than $10,000, RAYMOND requested that any checks payable to him be made in amounts under $10,000 so as to avoid filling out a form. Dobrozensky wrote multiple checks, ranging in amounts from $4,000 to $9,900, payable to RAYMOND, many on the same date.
Between August 2009 and May 2012, RAYMOND received 20 checks totaling $146,500 from the medical practice’s business bank accounts. The checks were negotiated for cash at local bank branches where RAYMOND had personal accounts.
With respect to related conduct, on November 27, 2012, RAYMOND and Dobrozensky traveled to a branch of Farmington Bank in Avon where RAYMOND told Dobrozensky to write checks in amounts below $10,000. Dobrozensky wrote two checks, one to herself for $9,900 and one to RAYMOND for $9,900. Dobrozensky then cashed the check payable to her and received $9,900 in cash, and RAYMOND cashed the check payable to him and received $9,900 in cash. Later, RAYMOND provided the $9,900 to Dobrozensky.
The charge of unlawfully structuring financial transactions carries a maximum term of imprisonment of five years and a fine up to $250,000. Judge Arterton scheduled sentencing for January 15, 2016.
RAYMOND has agreed to forfeit $10,000 related to his structuring activity.
RAYMOND is released on a $200,000 bond.
On October 13, 2015, Dobrozensky pleaded guilty to tax and structuring charges. She awaits sentencing.
This matter has been investigated by the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation and Hartford Police Department. The case is being prosecuted by Assistant U.S. Attorneys John H. Durham and Peter S. Jongbloed.
Fresno Man Sentenced to over 10 Years in Prison for Sex Trafficking of a MinorRead the Press Release
FRESNO, Calif. — United States District Court Judge Lawrence J. O’Neill sentenced Tryvell Powell, 34, of Fresno, today to 10 years and 10 months in prison for sex trafficking of a minor, United States Attorney Benjamin B. Wagner announced.
According to court documents, Powell communicated with a 16-year-old girl on Facebook and persuaded her to leave Modesto where she was living and travel to Fresno. She then engaged in sex acts with strangers at Powell’s request for his monetary benefit. A relative of the girl reported seeing pictures of the teen in an online advertisement for prostitution. Fresno detectives used the advertisements to contact the girl and arrested Powell.
This case was the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant United States Attorney Michael Frye prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Fort Worth Man Sentenced to 300 Months in Federal Prison on Crack Cocaine ConvictionRead the Press Release
FORT WORTH, Texas — Jeremy Warner, a Fort Worth man who pleaded guilty in July to one count of possession of cocaine base (crack cocaine) with the intent to distribute, was sentenced today by U.S. District Judge Reed C. O’Connor to 300 months in federal prison, announced U.S. Attorney John Parker of the Northern District of Texas.
Warner, 33, has been in custody since his arrest in May 2015 on a related federal criminal complaint.
According to the complaint filed in the case, when officers with the Fort Worth Police Department executed a search warrant at Warner’s residence on Illinois Avenue in Fort Worth in May 2015, Warner ran down the hallway and attempted to barricade himself in the master bathroom. After taking Warner into custody, officers began a systematic search of the residence. During the search, officers located a clear baggie containing approximately 95 grams of crack cocaine in plain view on the kitchen counter beside a digital scale. During a search of the master bathroom cabinets, officers located two large clear bags, one of which contained approximately 699 grams of crack cocaine and the second clear bag contained approximately 807 grams of powder cocaine. During the search of a hallway closet, officers located approximately $11,000.
Warner knowingly possessed the cocaine base with the intent to distribute it.
The Fort Worth Police Department and the Drug Enforcement Administration investigated the case. Assistant U.S. Attorney Shawn Smith prosecuted.
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Former Woodbury Police Chief Sentenced for Theft of Federal Grant FundsRead the Press Release
Kevin Mooneyham, 47, former Chief of Police for the City of Woodbury, Tennessee, was sentenced today by Chief U.S. District Judge Kevin H. Sharp to serve eight months in federal prison for theft of federal program funds, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Mooneyham was also ordered to serve one year of supervised release and to pay restitution in the amount of $42,171.29. Mooneyham was indicted on April 22, 2015, and pleaded guilty on June 29, 2015.
In sentencing Mooneyham, Judge Sharp noted that there was an abuse of the public position that Mooneyham held which could not be ignored and should be reflected in the sentence imposed.
Mooneyham admitted during the plea hearing that from January 2013 through February 2015, while acting in his official capacity as the Woodbury Police Chief, he submitted fraudulent timesheets for more than $28,000 in overtime hours that he had not in fact worked. The funds used to pay the false overtime hours claimed by Mooneyham were derived from federal grants provided by the National Highway Traffic Safety Administration through the Governor’s Highway Safety Office, specifically for the purpose of enhanced DUI enforcement efforts.
Mooneyham also admitted that he misrepresented to other officers of the Woodbury Police Department that federally-funded overtime was not available, despite the fact that he had been submitting and continued to submit timesheets for such overtime on his own behalf. He also disclosed that he had misrepresented to a Town of Woodbury official that he had received a large percentage of federally-funded overtime pay because no other officers of the Woodbury Police Department were willing to perform the overtime patrols. In fact, several Woodbury Police officers had expressed an interest in performing such overtime patrols.
The case was investigated by the Tennessee Bureau of Investigation. Assistant U.S. Attorney Bill Abely prosecuted the case.
Former Wilmington Housing Authority Employee Pleads Guilty to $179,000 EmbezzlementRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Damien Piper, age 34, of Wilmington, Delaware, pled guilty today to violations of 18 U.S.C. § 666 (Theft of Public Funds). Piper, who will be sentenced on February 2, 2016, by the Honorable Gregory M. Sleet, United States District Judge for the District of Delaware, faces a maximum sentence of ten years in prison, a fine of $250,000, and 3 years of supervised release.
According to statements made at the plea hearing and documents filed in court, the defendant was an Assistant Site Manager for the Wilmington Housing Authority’s Crestview Apartments. In February 2012, he began converting residents’ rental payments to his personal use. Residents often paid their rent by money order. Piper received and altered the money orders, making them payable to himself. Piper deposited the money orders into bank accounts he owned and controlled, and he cashed some of the money orders at check cashing businesses.
From February 10, 2012, and continuing up to and including October 7, 2014, Piper took more than 700 money orders that were designated for the Housing Authority, and he obtained at least $179,000. Piper altered the Housing Authority’s computerized records to conceal the converted payments as “adjustments.” These altered Housing Authority records indicated that less rent was due from the residents. In fact, Piper collected the full amount of rent from the residents and kept the “adjustment” amount for himself.”
U.S. Attorney Oberly commented: “I personally want to thank everyone involved who made this prosecution possible. Those who think they can commit crimes like this will be prosecuted and punished accordingly.”
This case is the result of an investigation conducted by the U.S. Department of Housing & Urban Development, Office of Inspector General, and the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Lauren Paxton.
Former Treasurer Admits to Stealing Money from Charlotte Area Non-Profit Employer and Pleads Guilty to ChargesRead the Press Release
CHARLOTTE, N.C. – The former Treasurer of a Charlotte area non-profit organization appeared in court today and admitted to stealing more than $344,262 from his employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Floyd Kevan Weaver, 53, of Rock Hill, S.C. pleaded guilty to one count of uttering counterfeit and forged securities before U.S. Magistrate Judge David C. Keesler.
U.S. Attorney Rose is joined in making today’s announcement by Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service.
According to filed court documents and today’s court proceedings, from 2000 to 2013, Weaver was employed by a non-profit organization located in Charlotte. As the non-profit’s elected Treasurer, Weaver was responsible for the organization’s financial affairs and acted as custodian of its funds. Weaver admitted in court today that from 2008 to 2013, he engaged in a scheme to defraud his employer by fraudulently diverting the organization’s funds for his personal benefit.
According to court records, Weaver executed the scheme by forging the name of one of the non-profit’s officers on the organization’s bank checks and depositing those checks into his own bank account. To conceal the fraud, Weaver mischaracterized the stolen funds as travel expenses, mileage reimbursement, office supplies and postage. Weaver admitted that he forged approximately 116 checks totaling more than $326,545. Weaver also admitted to using the non-profit’s debit card to steal more than $17,717 for his personal use. Court documents show that Weaver used the stolen money to purchase jewelry and a car, among other things.
Weaver was released on bond following his guilty plea. The charge carries a maximum prison term of 10 years and a $250,000 fine. As part of his plea agreement, Weaver has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendant has not been set yet.
The investigation was handled by the USPIS. The prosecution for the government is being handled by Assistant United States Attorney Jenny Sugar of the U.S. Attorney’s Office in Charlotte.
Former Silk Road Task Force Agent Sentenced to 78 Months in Prison for Extortion, Money Laundering, and ObstructionRead the Press Release
SAN FRANCISCO – Carl M. Force was sentenced to 78 months in prison today for extortion, money laundering, and obstruction of justice announced Acting U.S. Attorney Brian J. Stretch, Assistant Attorney General Leslie R. Caldwell, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Department of Justice Office of the Inspector General’s Washington, D.C. Field Office and Special Agent in Charge James E. Ward of the Department of Homeland Security’s Office of the Inspector General. The sentence follows a guilty plea in which Force admitted to using his position as an undercover agent with the Drug Enforcement Administration to steal digital currency during a federal investigation.
Force, 46, of Baltimore, had been a Special Agent with the DEA for 15 years. Between 2012 and 2014, he was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road. Force was the lead undercover agent in communication with Ross Ulbricht, a/k/a “Dread Pirate Roberts,” who ran the Silk Road from the Northern District of California. On July 1, 2015, Force pleaded guilty to charges that he used his position during that investigation to steal money during the investigation and then took steps to cover up his wrongdoing.
“The prosecution and conviction of Mr. Force illustrates that the public and law enforcement alike are subject to the same rules,” said Acting U.S. Attorney Brian J. Stretch. “The vast majority of the men and women in this country who are entrusted to enforce the law to do so honorably, skillfully, and in a manner that instills confidence and trust in government. Mr. Force has dishonored that majority and has today received a just punishment for his criminal conduct.”
“Law enforcement officials receive certain powers from the government so they can defend the rights of people and prevent wrong doing,” said FBI Special Agent In Charge David J. Johnson. “When individuals working in an official capacity violate the trust of their communities by abusing that power, they undermine the hard work of the entire law enforcement community. The FBI will continue to prioritize corruption investigations and hold those who abuse the public's trust accountable.”
“Through a series of complex transactions the defendant stole bitcoins worth hundreds of thousands of dollars,” said Thomas McMahon, Acting Special Agent in Charge, IRS Criminal Investigation. “The defendant’s crimes began with creating fictitious personas. He then stole bitcoins that he received in his official capacity and deposited them into his own personal accounts. This case is an excellent example of the financial expertise of our special agents. Through the analysis of both the block chain and data from the Silk Road servers, we were able to trace the flow of funds, which eventually led to the defendant.”
In his plea agreement, Force admitted to being on Ulbricht’s payroll in a variety of ways while assigned to investigate Ulbricht and the Silk Road. For example, Force used his official undercover persona, “Nob,” to get Ulbricht to send bitcoin payments in exchange for information, including “insider” law enforcement information; ironically, Force duped Ulbricht into making payments in part by claiming Nob had access to a corrupt government employee. Then, rather than disclose Ulbricht’s payments or turn them over to the government, Force lied on official reports and stole the funds. Force liquidated the digital currency into dollars and had the funds deposited into his own bank account in order to convert the funds to his own personal use. Further, Force also created other unofficial and fictitious personas that he used to extort payment from Ulbricht. For example, Force convinced Ulbricht he was “French Maid” named Carla Sophia who was willing to sell inside law enforcement information about the government’s investigation into the Silk Road in exchange for approximately $100,000 worth of bitcoin. Ulbricht ultimately made the payment and Force, again, stole the funds.
Ulbricht and the government were not the only targets of Force’s scheme: Force also admitted in the plea agreement that he extorted “R.P.,” a California resident. R.P. maintained a digital currency balance with CoinMKT, a California digital currency exchange. Force directed CoinMKT to seize R.P.’s funds despite there being no legal basis to do so. Force then pocketed those sums belonging to R.P., once again transferring them to his own personal digital currency exchange and subsequently converting them to dollars using his personal bank account.
Force also admitted to abusing his position by engaging in a wide array of outside activities without permission while he was a federal agent, all designed to enrich himself. For example, in March 2014, while still employed as a DEA agent, Force entered into a movie contract with Twentieth Century Fox Film Studios related to a movie deal concerning the government’s investigation into the Silk Road. The movie deal called for up to $240,000 in payments to Force. Further, Force also moonlighted as a de facto compliance officer for CoinMKT, the same digital currency exchange involved with Force’s attempt to extort R.P. Force offered to help CoinMKT investigate its customers by using his position as a federal agent and his access to government databases. In addition, Force sent an unauthorized but official Justice Department subpoena to Venmo, a mobile payments company, directing them to unfreeze his own personal account. When Venmo did not comply, Force wrote to another agent suggesting a criminal seizure directed at Venmo’s accounts.
With the proceeds of his criminal activities, Force engaged in a series of complicated transactions, using the bitcoin block chain and several different accounts, all designed to conceal the true source and nature of the proceeds. In today’s plea agreement, Force also admitted he obstructed justice by interfering both with the evidence in the Baltimore case against Ulbricht, and with the San Francisco case into his own illegal acts. For example, Force admitted lying to federal prosecutors and investigators when he, among other things, denied ever using the moniker, “French Maid.” In his agreement with the government, Force has agreed to ask the Judge to impose sentencing enhancements for this obstruction. On June 22, 2015, Force was charged in a three-count information with money laundering with predicates of wire fraud and theft of government property, in violation of 18 U.S.C. § 1956(a)(1)(A) and (B); obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2); and extortion under color of official right, in violation of 18 U.S.C. § 1951. On July 1, 2015, Force pleaded guilty to all counts.
The Honorable Richard Seeborg, U.S. District Judge in San Francisco, handed down the sentence. Judge Seeborg also sentenced Force to a three year period of supervised release and ordered restitution of $340,000.
Force is one of two federal agents to be charged with illegal activity in connection with the investigation into the Silk Road. Shaun W. Bridges, 32, of Laurel, Maryland, was a Special Agent with the U.S. Secret Service who also was assigned to the Baltimore Silk Road Task Force. Bridges was charged in a two-count information on June 16, 2015 with money laundering with a predicate of wire fraud, in violation of 18 U.S.C. § 1957, and obstruction of justice, in violation of 18 U.S.C. § 1512(c)(2), related to his diversion of over $800,000 in digital currency to which he gained control as part of the Silk Road investigation. In his plea agreement scheduled to be entered before Judge Seeborg on August 31, 2015, Bridges has admitted to the conduct with which he was charged.
The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, with the assistance of San Francisco Legal Assistant Daniel Charlier-Smith, Christine Tian and Lance Libatique. Assistant U.S. Attorney Arvon Perteet assisted with Asset Forfeiture aspects of the case. The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington D.C. The prosecution team is also thankful for the assistance of the following components for their support throughout the investigation of this case: IRS Criminal Investigation – New York Field Office, HSI’s Chicago/O’Hare Division, the U.S. Attorney’s Office for the Southern District of New York, the Department of Justice’s Computer Crime and Intellectual Property Section, the U.S. Embassy in Slovenia, and the FBI Legal Attaché Office in Tokyo, Japan.
Former Miami Dade College Student Sentenced for His Involvement in a Stolen Identity Tax Refund Fraud Scheme Involving Financial Services AccountRead the Press Release
A former Miami Dade College (MDC) student was sentenced to 36 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $30,967 for his involvement in a stolen identity tax refund fraud scheme involving his student financial services account.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, FBI, Miami Field Office, made the announcement.
Jonathan Joseph, of Miami-Dade County, previously pled guilty to one count of conspiracy to commit an offense against the United States, in violation of Title 18, United States Code, Section 371, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, Joseph was a student at Miami Dade College. During his time as a student, Joseph opened a bank account serviced by Higher One, Inc. (HOI), which provides financial services to colleges and universities throughout the United States, including Miami Dade College in Florida.
Joseph and other unknown co-conspirators submitted twenty-two (22) fraudulent tax returns to the U.S. Department of Treasury (Treasury) claiming $104,260 in tax refunds and directed these refunds be deposited into Joseph’s HOI account. They also submitted sixteen (16) fraudulent tax returns to Treasury claiming $75,527 in tax refunds and directed these refunds be deposited into his unindicted co-conspirator's HOI account.
Joseph’s HOI account received $11,320 in fraudulently obtained tax refunds from Treasury. From July to September 2012, Joseph’s HOI account also received over $15,000 in proceeds from stolen tax refunds from his unindicted co-conspirator's HOI account.
Mr. Ferrer commended the investigative efforts of IRS-CI and the FBI. The case is being prosecuted by Assistant U.S. Attorney Gera R. Peoples.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
Former Letter Carrier Sentenced for Drug Trafficking and BriberyRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced former letter carrier Takisha Cole, age 33, of Washington, D.C. today to 21 months in prison followed by three years of supervised release for possession with intent to distribute marijuana, use of a communications device to facilitate drug trafficking and bribery.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Paul L. Bowman of the U.S. Postal Service, Office of Inspector General; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; and Chief J. Thomas Manger of the Montgomery County Police Department.
From at least March 2011 through September 2014, Cole was a letter carrier for the U.S. Postal Service, assigned to a route serving the Silver Spring, Maryland area.
According to court documents and evidence presented at Cole’s five-day trial, from at least May 2013 through August 13, 2014, Michael Prandy paid Cole to use her position as a letter carrier to obtain and deliver packages containing marijuana to Prandy. The packages were sent from California and elsewhere and mailed via USPS to Prandy’s residence in Silver Spring. In August 2013, Prandy’s address was removed from Cole’s postal route. Nevertheless, Cole continued to pick up his packages at the Silver Spring Postal Annex and deliver them to Prandy’s residence on McAlpine Road. According to trial testimony, in return for delivering the packages, Prandy paid Cole $50 to $100 per package, which he placed in an envelope and left in the mailbox at his residence for Cole to pick up.
Michael Louis Prandy, age 39, of Silver Spring, Maryland previously pleaded guilty to his role in the conspiracy and was sentenced to 33 months in prison.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Service -OIG, the U.S. Postal Inspection Service and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Ray D. McKenzie, who prosecuted the case.