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Wednesday 24 June 2015
Retired Indiana Principal Sentenced to Ten Years in Prison for Attempting to Entice a Minor to Engage in Unlawful Sexual ActivityRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Dave Aronberg, State Attorney, Office of the State Attorney for Palm Beach County, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), and Jeffrey S. Katz, Chief, Boynton Beach Police Department (BBPD), announced the sentencing of defendant Dennis Blake, 62, of Delray Beach, Florida, in connection with his conviction for two counts of enticing a minor to engage in sexual activity, in violation of Title 18, United States Code, Section 2422(b). After finding that Blake, a retired principal from Indiana, arranged to meet a minor to engage in sexual activity, U.S. District Judge Beth Bloom sentenced Blake to a 120 month term of imprisonment and a $200 special assessment. Upon release, Blake will serve a 10 year term of supervised release and will have to register as a sex offender.
Blake pled guilty to two counts of enticing a minor to engage in sexual activity on March 31, 2015. The evidence showed that Blake sent numerous sexually explicit messages via a web-based social media application to an undercover officer who posed as a 15 year-old boy. Blake then attempted to meet the person he believed to be a minor to engage in illegal sexual activity. Blake was arrested by Boynton Beach Police Officers and Special Investigators for the office of the State Attorney’s Sexual Predator Enforcement Unit after he drove to a location where he believed that he would pick up the 15 year old boy. Special Agents from ICE-HSI conducted further investigation into Blake’s cellular telephone which revealed another conversation Blake had with an actual 15 year-old boy who lived in Palm Beach County, Florida. Blake had exchanged numerous sexually explicit messages via another web-based social media application and traveled to the boy’s home to attempt to engage in sex with him.
This case was part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Mr. Ferrer and Mr. Aronberg commended the investigative and cooperative efforts of ICE-HSI and BBPD. The case was prosecuted by Assistant U.S. Attorney Brandy Galler and Special Assistant U.S. Attorney Gregory Schiller from the Palm Beach State Attorney’s Office.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Restaurant Owner Indicted with Violating Federal Tax LawsRead the Press Release
A federal grand jury in Milwaukee returned a 33-count indictment charging Paul Bouraxis and three members of his family with violating federal tax laws.
The indictment charges Paul Bouraxis (age 65), his wife Freida Bouraxis (age 60), their son, Andreas Bouraxis (age 38), and son-in-law, Reiad “Ray” Awadallah (age 44), all of whom reside in Franklin, Wisconsin, with conspiring to impede the Internal Revenue Service based on their skimming of cash from the receipts of three restaurants they operated: the Omega Burger restaurant, located on S. 27th Street in Franklin, the El Fuego restaurant located on W. Layton Avenue in Milwaukee, and the El Beso restaurant located on S. 74th Street, in Greenfield.
The indictment also alleges that the defendants paid restaurant employees in cash and failed to withhold or pay taxes on such wages. According to the indictment, the defendants concealed their actions by not depositing cash skimmed from the restaurants to bank accounts and, instead maintained a cash hoard of more than $1.7 million. Some of the skimmed cash was used to purchase jewelry and precious metals, including 33, 100-ounce bars of silver.
The indictment also charges Paul Bouraxis with 10 counts of tax evasion based on the tax return he filed for himself for 2010 and payroll tax returns he filed for Omega Burger. Andreas Bouraxis is also charge with 18 counts of tax evasion based on the tax return he filed for himself for 2010 and payroll tax returns he filed for El Fuego and El Beso. Awadallah is also charged with three counts of filing false tax returns based on the tax returns he filed for himself for the years 2009 – 2011.
Paul Bouraxis is also charged with bank fraud in connection with loans he obtained from Associated Bank. The indictment alleges that Paul Bouraxis defaulted on the loans and then re-negotiated the terms of the loans by concealing his true financial condition from the bank, including that he and his family had a cash hoard of more than $1.7 million and bank accounts in Greece with balances of more than $2 million. According to the indictment, Associated Bank lost more than $4 million as a result of this scheme.
Based on these charges, Paul Bouraxis faces up to 85 years in prison and fines of up to $3.75 million. Freida Bouraxis faces up to 5 years in prison and a fine of up to $250,000. Andreas Bouraxis faces up to 19 years in prison and fines of up to $4.75 million. Reiad Awadallah faces up to 14 years in prison and fines of up to $1 million. The indictment also seeks to forfeit more than $1.7 million in currency and gold and silver coins and bars previously seized by federal agents.
Separately, a two-count indictment was returned against Gus Koutromanos (age 68) of New Berlin charging him with two counts of tax evasion. The indictment alleges that during 2012, Koutromanos, who was the part-owner of a restaurant known as Omega on Twenty Seven, located on S. 27th Street in Milwaukee, paid restaurant employees more than $385,000 in cash, from which he did not withhold income or payroll taxes. Koutromanos faces up to 10 years in prison and fines of up to $500,000 if convicted
In addition, the government filed a plea agreement that had been reached with Scott Sherman (age 45), an accountant residing in Sheboygan. Under the terms of this plea agreement, Sherman will plead guilty to one count of filing a false federal income tax return. Sherman, who provided accounting and bookkeeping services to Paul Bouraxis and his businesses, failed to report all of the income he earned from his accounting practice during the years 2007-2011. As a result, Sherman underpaid his income taxes by more than $48,000.
Sherman faces up to three years in prison and a fine of up to $250,000. Sherman has agreed to make full restitution to the IRS for the unpaid taxes, penalties and interest, which is presently estimated to be approximately $93,000. As part of his plea agreement, Sherman has also agreed to cooperate with the government in its investigation and prosecution of this and related matters.
These matters were investigated by Special Agents from the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. The prosecution is assigned to Assistant United States Attorneys Matthew Jacobs and Richard Frohling.
“This indictment should serve as a warning to those who choose to actively engage in illegal schemes to evade their income and payroll tax obligations,“ said Shea Jones, Special Agent in Charge of IRS Criminal Investigation’s St. Paul Field Office. “Using cash in an attempt to conceal illegal activity will not deter IRS Criminal Investigation’s Special Agents from vigorously pursuing those who threaten the integrity of our nation's tax system.”
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Pope County Man Convicted on Methamphetamine Related ChargesRead the Press Release
A Pope County man was convicted on June 23, 2015, on methamphetamine related charges following a two day jury trial, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Colt V. Lynn, 30, of Golconda, Illinois, was convicted following a two day jury trial on both counts in a federal indictment. Count 1 charged that from January 11, 2013, until on or about January 15, 2013, in Pope, Union, and Saline Counties, Lynn knowingly conspired to manufacture methamphetamine. Count 2 charged that from January 11, 2013, until on or about January 15, 2013, in Pope, Union, and Saline Counties, Lynn knowingly and intentionally possessed pseudoephedrine pills knowing they would be used to manufacture methamphetamine.
With respect to each Count, Lynn faces up to 20 years in federal prison, up to $1,000,000 fine, and supervised release of at least 3 years.
Sentencing is scheduled during September 2015, at the United States Courthouse in Benton, Illinois.
The investigation in this case was conducted by the Pope County, Illinois, Sheriff’s Department, The Pope County, Illinois, State’s Attorney’s Office, The Pope County, Illinois, Probation Office, The Golconda, Illinois, Police Department, the Massac County, Illinois, Sheriff’s Department, and the Illinois State Police.
The case is being handled by Assistant United States Attorney Thomas E. Leggans.
Owners of Orlando Health Care Clinic Plead Guilty to Engaging in $2.5 Million Medicare Fraud SchemeRead the Press Release
Husband and wife owners of an Orlando health care clinic pleaded guilty today to engaging in a $2.5 million health care fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida and Special Agent in Charge Shimon R. Richmond of the Florida Region of U.S. Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Juan Carlos Delgado, 58, and Nereyda Infante, 48, both of Orlando, Florida, each pleaded guilty to conspiracy to commit health care fraud before U.S. District Judge Paul G. Byron of the Middle District of Florida. Sentencing hearings are scheduled for Sept. 29, 2015.
Delgado and Infante owned and operated several health care clinics in Orlando, Florida, under variations of the name Prestige Medical. According to admissions made in connection with their guilty pleas, between February 2012 and September 2014, the defendants fraudulently billed Medicare approximately $2.5 million on behalf of the Prestige clinics for services that never were administered. Specifically, Delgado and Infante admitted to billing Medicare over $1.2 million for pentostatin, an expensive anticancer chemotherapeutic medication used to treat Leukemia despite never administering any pentostatin.
The case is being investigated by HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Middle District of Florida. The case is being prosecuted by Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team, go to: www.stopmedicarefraud.gov.
Juan Carlos Delgado Plea Agreement
Nereyda Infante Plea Agreement
North Carolina Woman Charged with Tax EvasionRead the Press Release
Marilyn McDaniel, 67, of Garner, North Carolina, was charged by indictment with two counts of attempt to evade or defeat tax, in violation of Title 26, United States Code, Section 7201. If convicted, the defendant faces a maximum statutory sentence of ten years in prison.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
According to the indictment, in the calendar year 2009, McDaniel willfully attempted to evade and defeat tax by failing to pay the Internal Revenue Service (IRS) at least $200,664 in federal income tax due based on funds that she diverted from RGB Group, Inc. and RLM Services, Inc., to personal bank accounts she controlled. For calendar year 2010, McDaniel willfully prepared and caused to be prepared a false and fraudulent U.S. Individual Income Tax Return, Form 1040, on behalf of herself, which was filed with the IRS, indicating that her taxable income for the calendar year was approximately $15,577 when she knew that her taxable income was substantially in excess of what she reported.
McDaniel had her initial appearance on June 23, 2015, before United States Magistrate Judge Alicia M. Otazo-Reyes.
Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Maurice A. Johnson.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Niagara Falls Man Sentenced on Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Louis J. Carr, 42, of Niagara Falls, NY, who was convicted of distribution of hydrocodone, was sentenced to two years probation by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that the defendant was employed as a front desk administrator at a local dental practice. Between March and September 2014, Carr forged approximately 75 prescriptions for hydrocodone. The defendant created, printed, and then deleted the prescriptions from the office computer system. Carr used a stamp with the doctor’s signature to authorize the prescriptions. Subsequently, the defendant sold the forged prescriptions for $50-$60 to other individuals.
The sentencing is the culmination of a joint investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division.
New Orleans Woman Sentenced to 15 Months for Theft of Social Security FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that LAVERNE ROSE, age 69, of New Orleans, was sentenced today after previously pleading guilty to a one-count Bill of Information for theft of government funds.
U.S. District Judge Kurt D. Engelhardt sentenced ROSE to 15 months incarceration, to be followed by 3 years of supervised release. ROSE was also ordered to pay full restitution.
According to court documents, ROSE admitted that she stole $282,400 from the Social Security Administration over the course of 23 years. ROSE jointly held a bank account with her father, who died in 1990. Unaware of ROSE’S father’s death, the Social Security Administration continued wiring retirement benefits for him to the account. ROSE received and spent the benefits until 2014, when the Social Security Administration learned that ROSE’S father had died. ROSE admitted that she knew the payments should have ceased and that they did not belong to her.
U.S. Attorney Polite praised the work of the United States Social Security Administration - Office of the Inspector General in investigating this matter. Assistant U.S. Attorney Chandra Menon was in charge of this prosecution.
New Orleans Woman Sentenced for Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CAROLYN TREAUDO, age 54, a of New Orleans, was sentenced today after previously pleading guilty to a one-count Bill of Information for the theft of $94,840 in government funds.
U.S. District Judge Kurt D. Engelhardt sentenced TREAUDO to 4 years’ probation, 6 months of home confinement, and a $10,000 fine. TREAUDO has already made full restitution to the Governor's Office of Homeland Security and Emergency Preparedness (GOHSEP).
According to court documents, TREAUDO had admitted to stealing approximately $94,840 from the Federal Emergency Management Agency during 2009 and 2010. The funds were administered by GOHSEP under a program to return disaster-affected locations, including schools, to pre-disaster conditions by reimbursing expenses and paying replacement costs.
U.S. Attorney Polite praised the work of the Department of Homeland Security - Office of the Inspector General in investigating this matter and thanked the Louisiana Legislative Auditor for their assistance. Assistant U.S. Attorney Chandra Menon was in charge of this prosecution.
New Jersey man convicted of oxycodone traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Marshall County, West Virginia resident Dennis Ferretti, 37, originally of Wenonah, New Jersey, was convicted today of prescription painkiller trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Throughout 2014 and 2014, Ferretti conspired with other individuals to possess and distribute oxycodone in Wetzel and Marshall Counties in West Virginia. He pled guilty today to one count of “Drug Conspiracy - Oxycodone.” He faces between up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Jarod Douglas prosecuted the case on behalf of the government. The Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the West Virginia State Police let the investigation.
Senior U.S. District Judge Frederick P. Stamp presided.
Nebraska Man Sentenced in Missoula to More than 16 Years in Prison for Child Porn CrimeRead the Press Release
MISSOULA – Tony Gustafson, 48, of Hastings, Nebraska, was sentenced today to 200 months in federal prison, followed by lifetime supervised release, for conspiracy to advertise child pornography. Gustafson was also required to forfeit his computer, hard drives, a USB device, and 30 VHS tapes that were involved in the crime. Chief U.S. District Court Judge Dana Christensen sentenced Gustafson following a February 9, 2015, change of plea hearing, in which Gustafson pleaded guilty to the offense.
In an Offer of Proof filed by Assistant U.S. Attorney Cyndee Peterson, the government stated that if the case had proceeded to trial, the government would have proven that an invitation-only online bulletin board, referred to as Dark Moon, was created in 2011. It allowed members to advertise and exchange images of child pornography. In approximately 2012, Gustafson became an active member of the bulletin board and continued to be an active member in a more advanced role as of April 19, 2013. Gustafson requested child pornography from other members while on the bulletin board. He also responded to and commented on posts of child pornography on the board. Law enforcement analyzed Gustafson’s digital devices and other evidence, which revealed that he used hard drives, a computer, a USB storage device, and 30 VHS tapes in commission of the crime. Gustafson was ordered to forfeit those items at the sentencing.
This case was initiated under the Department of Justice’s Project Safe Childhood initiative which was launched in 2006 to combat the proliferation of technology-facilitated crimes involving the sexual exploitation of children. Through a network of federal, state and local law enforcement agencies and advocacy organizations, Project Safe Childhood attempts to protect children by investigating and prosecuting offenders involved in child sexual exploitation. It is implemented through partnerships including the Montana Internet Crimes Against Children (ICAC) Task Force. The ICAC Task Force Program was created to assist state and local law enforcement agencies by enhancing their investigative response to technology facilitated crimes against children. Investigative agencies in the case include the FBI, Homeland Security Investigations, and Montana Division of Criminal Investigation.
Assistant United States Attorney Cyndee Peterson prosecuted this case along with Maureen Cain, of the U.S. Department of Justice Child Exploitation & Obscenity Section. Because there is no parole in the federal system, Gustafson will have to serve at least 85% of his sentence before he is released from prison.
Montgomery Man Convicted for Illegal Gun Sales on Darknet SitesRead the Press Release
Montgomery, Alabama – A Montgomery man was convicted on June 19, 2015 for unlicensed firearms trafficking, announced George L. Beck, Jr., United States Attorney for the Middle District of Alabama.
Following a week-long trial, Michael Albert Focia, 48, was convicted on one count of dealing in firearms without a federal firearms license and two counts of transferring a firearm to an out-of-state resident. Based on the evidence introduced at trial, Focia operated as a weapons vendor on “Black Market Reloaded” and “Agora,” both of which were underground marketplaces accessible only when using anonymous encrypted internet browsing software.
During the investigation, Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) posed as gun buyers on these two Darknet websites and were able to negotiate for the sale of two guns from Focia. After agreeing to sell the guns, Focia shipped them from Alabama to Nebraska and New Jersey. In the case of the New Jersey gun, evidence at trial showed that Focia’s fingerprint was on the gun’s packaging.
Focia was also connected at trial to at least 15 to 25 additional gun sales based on information obtained from the Agora website. Focia’s sentencing hearing has been set for October 15, 2015, and he is facing a maximum sentence of 15 years in federal prison.
"ATF’s priority to reduce violent crime includes leveraging technology to curb the illegal transfer of firearms through the Internet," stated ATF Special Agent in Charge Steven L. Gerido.
“This is another example of the U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, and Firearms catching criminals who transport firearms illegally,” said Postal Inspector-in-Charge Adrian Gonzalez, Houston Division. “Strict federal laws protect the U.S. Mail when firearms are shipped, and postal inspectors will continue to bring to justice anyone violating those laws.”
“Preventing the illegal sale of firearms is a critical part of our war on violent crime,” stated U.S. Attorney Beck. “I applaud the great work of our federal, state, and local law enforcement partners who identify and investigate gun traffickers. All too often, illegal gun sales place firearms in the hands of criminals and make our communities more dangerous.”
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the United States Postal Inspection Service, with assistance from the Federal Bureau of Investigation and the Montgomery County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorneys Gray M. Borden and Jonathan Ross.
Midway woman sentenced in federal court for obtaining drugs by fraudRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced that Olivia Dixon, 31, of Midway, West Virginia was sentenced today in federal court in Beckley to eight months in federal prison, followed by a one year term of supervised release. Dixon previously pled guilty in March of 2015, to acquiring hydromorphone and morphine sulfate by fraud. Dixon, a former nurse at Raleigh General Hospital in Beckley, West Virginia, admitted that on November 10, 2014, she stole pain medications intended for patients, including morphine, for her own personal use. This case was investigated by the Beckley Raleigh County Drug and Violent Crime Task Force and is being prosecuted under the Beckley Pill Initiative directed by the United States Attorney’s Office.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
Mexican National Arrested in New Mexico on Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Gilberto Galvan-Gonzalez, 37, a Mexican national illegally in the United States, made his initial appearance today in federal court in Las Cruces, N.M., on a criminal complaint charging him with possession of methamphetamine with intent to distribute. Galvan-Gonzalez remains in federal custody pending a preliminary hearing and a detention hearing which have yet to be scheduled.
Galvan-Gonzalez was arrested yesterday after U.S. Border Patrol (USBP) agents allegedly located him entering the United States near Santa Teresa, N.M., while carrying approximately 3.16 pounds of methamphetamine concealed inside his backpack. According to the criminal complaint, Galvan-Gonzalez allegedly was paid $1,500.00 to carry the methamphetamine from Mexico to the United States.
If convicted on the charge in the criminal complaint, Galvan-Gonzalez faces a statutory mandatory minimum of ten years and a maximum of life imprisonment, and will be deported following his incarceration. Charges in criminal complaints are merely accusations, and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Santa Teresa Station of the U.S. Border Patrol and the Las Cruces office of the DEA and is being prosecuted by Assistant U.S. Attorney Mark Saltman of the U.S. Attorney’s Las Cruces Branch Office.
Marshall County man convicted of heroin traffickingRead the Press Release
WHEELING, WEST VIRGINIA – George N. Sidiropolis, 35, of McMechen, West Virginia, was convicted today of heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Throughout 2014 and 2015, Sidiropolis participated in a drug distribution operation in which heroin was transported across state lines from Pittsburgh, Pennsylvania into Ohio and Marshall Counties in West Virginia, as well as locations in Ohio, for redistribution and sale.
Sidiropolis pled guilty today a criminal Information charging him with one count of “Conspiracy to Distribute Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government. The Marshall County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge James E. Seibert presided.
Man Sentenced to over 60 Years in Prison for Robbery, Firearm OffensesRead the Press Release
St. Thomas, USVI – District Court Judge Curtis V. Gomez today sentenced Richard Antonio Hodge, Jr., 30, of St. Thomas, to over 60 years in prison for Hobbs Act robbery, discharge of a firearm during the commission of a crime of violence, and related offenses, announced United States Attorney Ronald W. Sharpe.Judge Gomez also sentenced Hodge to four years of supervised release, and ordered him to pay $300 in special assessments.
“Justice has been done,” U.S. Attorney Sharpe said. “This violent and brazen criminal conduct has no place in a civilized society and will not be tolerated.”
On June 11, 2014, after a three-day jury trial, Hodge was convicted of the armed robbery and shooting of a Ranger American Armored Service messenger and his supervisor on December 3, 2013 in the Lockhart Gardens Shopping Center. Hodge was convicted of the following offenses:
- Interfering with commerce by robbery (federal Hobbs Act robbery), for which he was sentenced to 70 months;
- Two counts of discharge of a firearm during the commission of a crime of violence, for which he was sentenced to a total of 35 years;
- Three counts of unauthorized possession of a firearm during the commission of a crime of violence, for which he was sentenced to a total of 15 years.
- Two counts of assault with intent to commit murder, for which he was sentenced to a total of five years;
- Robbery first degree, for which he was sentenced to five years, and
- Reckless endangerment, for which he was sentenced to five years.
The Court ordered Hodge to serve the sentences for the two counts of assault, robbery first degree and reckless endangerment concurrently.
According to the evidence presented at trial, on December 3, 2013, a messenger for Ranger American Armored Service went to Kmart at Lockhart Gardens Shopping Center to deliver and retrieve U.S. currency for deposit at a bank. The messenger entered Kmart, delivered coins, and picked up $33,550 to take to the bank. While in Kmart, the messenger also picked up $4,700 from the AT&T kiosk. After leaving the store, the messenger stopped to talk to his supervisor, who was standing a short distance from the entrance. Hodge ran up to the messenger, shot him in the back, hip and wrist, and ripped the money bag from his hands. Hodge then ran through the parking lot and into the Oswald Harris Court housing community where he was chased by an offduty Virgin Islands police officer and the messenger’s supervisor. Hodge was apprehended approximately 45 minutes later hiding in dense brush behind Oswald Harris Court. The messenger and supervisor were taken to the Roy Lester Schneider Hospital where both were treated for gunshot wounds. Both men recovered from their injuries. The stolen money and firearm used in the crimes were never recovered.
U.S. Attorney Sharpe commended the work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Virgin Islands Police Department and the Federal Bureau of Investigations for their outstanding work in this case. He also commended Assistant U.S.Attorney Nelson L. Jones, who prosecuted the case, and the off-duty police officer who chased the defendant into Oswald Harris Court after witnessing the robbery and shooting.
Man Sentenced to Federal Prison for Setting Fire to Landmark Portland RestaurantRead the Press Release
PORTLAND, Ore. – Marcus Allen Tyler, 31, of Portland, was sentenced today to 71 months in federal prison by U.S. District Judge Michael W. Mosman. In November 2014, Tyler pled guilty to the felony offense of arson. Tyler is currently in the custody of the U.S. Marshals Service.
After Tyler has completed his 71 months in prison, he must serve three years of federal supervised release. While on supervised release, Tyler will be required to pay restitution for the damage caused by the fire.
According to statements made in federal court, Tyler was the kitchen manager at Pal’s Shanty Tavern, located at 4630 NE Sandy Boulevard, in Portland, Oregon. Tyler had worked for Pal’s Shanty Tavern for five years, but he became upset with his employers because he believed that the waiters were not sharing enough of their tips with him.
In the early morning hours of November 15, 2013, Tyler used his key to enter Pal’s Shanty Tavern after it had closed for the night. Tyler spread gasoline in the kitchen to start a fire in the restaurant. Tyler intended for his arson to conceal a separate crime that night, which was a plan to steal an ATM that was located inside of Pal’s Shanty Tavern. After Tyler ignited the gasoline with a lighter, he slipped and fell on the gasoline that he had poured, and he was severely burned. Firefighters were called to respond to the fire, and it took 53 Portland firefighters to finally extinguish the fire, which destroyed Pal’s Shanty Tavern.
Tyler, who had fled the scene before firefighters arrived, was eventually transported to the hospital. A police investigation almost immediately revealed Tyler’s involvement in the arson.
“This sentence holds the defendant responsible for the crime of arson and recognizes the impact on the community. The defendant’s criminal actions were a betrayal to the long time owners and the neighborhood, Pal’s Shanty has been a Portland landmark and meeting establishment since 1966,” said Acting U.S. Attorney Billy J. Williams. “My office commends the Portland Fire & Rescue Bureau for their investigation of this case.”
Pal’s Shanty Tavern was a family-owned business that had been operating in Northeast Portland’s Hollywood District since the 1960s. It has not reopened since the arson.
"This fire put a well-known Portland establishment, Pal's Shanty, out of business. The successful prosecution of arson brings some closure to the owners, employees, and all the people who loved this local establishment,” said, Erin Janssens, Chief of Portland Fire & Rescue Bureau.
This case was investigated by the Portland Fire & Rescue Bureau and the Portland Police Bureau. The case was prosecuted by Assistant U. S. Attorneys Pamala R. Holsinger and Craig J. Gabriel.
Lubbock Man Pleads Guilty to Federal Child Pornography OffenseRead the Press Release
LUBBOCK, Texas — Michael Dennis Powers, 47, of Lubbock, Texas, appeared this morning before U.S. Magistrate Judge Nancy M. Koenig and pleaded guilty to one count of possession of prepubescent child pornography, announced John R. Parker, Acting U.S. Attorney for the Northern District of Texas.
Powers faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine. Powers remains on bond pending his sentencing hearing, which will be scheduled at a later date.
According to documents filed in the case, Powers admitted using a computer at his residence to, among other things, search the Internet for child pornography. In the course of searching for this material, Powers located, downloaded, and viewed numerous files containing child pornography. Powers knew that some of those files were produced using prepubescent minors engaging in sexually explicit conduct. On April 9 Powers was in possession of three computer disks containing the child pornography.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI and the Lubbock Police Department investigated. Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.
Lubbock Man Admits Posing as a Female “Modeling Agent” to Lure Teen and Take Sexually Explicit Photos of HerRead the Press Release
LUBBOCK, Texas — Amadeo Cruz Torres, 24, of Lubbock, Texas, appeared this afternoon before U.S. Magistrate Judge Nancy M. Koenig and pleaded guilty to one count of production of child pornography, announced John R. Parker, Acting U.S. Attorney for the Northern District of Texas.
Torres, who has been in custody since his arrest, faces a statutory penalty of not less than 15 years and up to 30 years in federal prison, and a $250,000 fine. A sentencing date was not set.
According to documents filed in the case, Torres met the teenage minor, “Jane Doe,” at South Plains Mall in Lubbock on June 17, 2014, after he had been communicating with her online, via Facebook, about the possibility of modeling. Torres first represented himself to be a female modeling agent named “Amber.”
The teenage victim’s mother took Jane Doe to the mall to meet the supposed modeling scout. Jane Doe was advised that she would be meeting with “Shane,” the defendant. Jane Doe was advised to meet with Torres without a parent or friend to minimize distractions.
After meeting with Jane Doe in the mall’s food court, Torres took her to a family restroom and locked the door. He took a video of her while he instructed her to engage in various poses. Eventually, Torres directed her to disrobe completely so that he could film a nude video. At one point during the “modeling session,” Torres convinced her to let him touch her in a sexually explicit manner to verify that she was not hiding drugs.
Torres was arrested the following day at South Plains Mall where he had gone to meet another minor female. Officers seized his video camera, cell phone and tablet computer.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Lubbock Police Department and the Federal Bureau of Investigation investigated. Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.
Long Island Doctor Pleads Guilty to Health Care Fraud and Obstruction of Medicare AuditRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Melvin Cwibeker, a doctor of chiropractic medicine from Nassau County, New York, pled guilty to healthcare fraud and obstruction of a federal audit, and he agreed to pay restitution and a $500,000 forfeiture.
The plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Scott Lampert, Special Agent-in-Charge, Health of Human Services, Office of Inspector General (HHS-OIG), New York Region.
“Dr. Cwibeker violated his oath and the law by hiring individuals to create fictitious patient records which were submitted to Medicare to obstruct its audit of his chiropractic billings,” stated Acting United States Attorney Currie. “Health care providers who falsely bill for care are on notice that they will face serious consequences.”
FBI Assistant Director-in-Charge Rodriguez stated, “Financial crimes, like the ones allegedly committed by Dr. Cwibeker when he fictitiously billed Medicare for treatments not provided, may appear victimless. However, these crimes impact society, through rising costs and diminishing services provided. By allegedly profiting over $4.3 million through illegitimate claims, Dr. Cwibeker put greed above his license and patient care.”
“Dr. Cwibeker engaged in a greed-fueled fraud scheme that undermined our health care system and the vulnerable individuals it serves,” said HHS-OIG Special Agent-in-Charge Lampert. “HHS-OIG, together with our law enforcement partners, will continue to vigorously pursue those who steal from government health programs for personal gain.”
Between 2006 and 2012, Dr. Cwibeker and his co-conspirators fraudulently billed Medicare more than $7 million for treatments never given to residents of assisted living facilities, and Dr. Cwibeker received over $4.5 million from such billings. On one day alone, New Year’s Eve in 2006, Dr. Cwibeker billed Medicare for chiropractic treatments he purportedly gave to 133 patients at various assisted living facilities. Between 2009 and 2012, Dr. Cwibeker employed three other chiropractors to provide chiropractic care to residents of adult homes and assisted living facilities in Brooklyn, Queens, and Westchester – and trained those chiropractors not to provide the patient care that was required under Medicare. Those three chiropractors were indicted with Dr. Cwibeker and previously pled guilty to health care fraud charges. Each time Dr. Cwibeker was audited by Medicare, he hired others to create fictitious patient records to support his earlier billings and then then sent the fictitious records to Medicare.
Dr. Cwibeker is scheduled to be sentenced on November 6, 2015 before United States District Judge Joanna Seybert, and he faces a maximum of 15 years in prison together with restitution, a forfeiture of $500,000, and potential fines of twice the gross gain from his scheme.
The government’s case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles P. Kelly and Senior Investigation Counsel Burton T. Ryan, Jr. are in charge of the prosecution.
The Defendant:
Name: MELVIN CWIBEKER
Age: 60
Residence: Cedarhurst, New York
E.D.N.Y. Docket No.: 12-CR-632 (JS)
Lincoln County Career Offender Sentenced to 8 Years in PrisonRead the Press Release
EUGENE, Ore. – Patrick Ball, 38, of Toledo, Oregon, was sentenced today by Chief U.S. District Judge Ann Aiken to 96 months in prison, to be followed by a three-year term of supervised release. The federal charges were brought after the Lincoln County Police and Toledo Police Department identified Ball as a methamphetamine trafficker and began an investigation. After a traffic stop, he was found with 107 grams of actual methamphetamine and arrested.
According to the prosecutor, Ball was a career offender because he had prior drug delivery convictions. He also had several convictions for property crimes including Burglary I, Burglary II, and Theft I. He was on supervision at the time he was found with the drugs, yet he was pedaling drugs in the local community. “The impact of methamphetamine on our local communities cannot be underscored and this case makes it clear that we will continue to aggressively seek out these types of cases for prosecution,” said Acting U.S. Attorney Billy J. Williams.
This case was investigated by the Lincoln County Police Department, the Toledo Police Department, the Newport Police Department and the DEA. This case was prosecuted by Assistant U.S. Attorney Amy Potter.
Justice Department Reaches Agreement with Maryland Day Camp to Ensure Equal Rights for Children with EpilepsyRead the Press Release
The Justice Department signed a settlement agreement today with Camp Bravo, a day camp that operates in Towson, Maryland, just outside Baltimore. The settlement resolves allegations that Camp Bravo violated a child’s civil rights by denying her admission to the camp because she has epilepsy, in violation of the Americans with Disabilities Act (ADA). Because the child would need emergency medication administered if she were to have a prolonged or acute repetitive seizure, Camp Bravo denied her admission. Though the medication, Diastat, is designed to be administered by trained laypersons and could save the child’s life, Camp Bravo would not permit non-medical staff to administer the medication and later refused to permit the camp nurse to accompany the child on field trips or bus rides. As a result, the child was not able to attend Camp Bravo for two consecutive summers.
Title III of the ADA prohibits discrimination on the basis of disability by private camps and child care programs. Under the ADA, such entities must make reasonable modifications to their policies, practices or procedures when necessary to provide equal access to a child with a disability, unless a modification would fundamentally alter the nature of the goods and services. It generally will be a reasonable modification required by title III of the ADA for certain public accommodations, such as camps and child care programs, to train laypersons to administer Diastat.
“Equal access to camps and child care programs is essential to children and parents across the country,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “These programs allow children with disabilities to learn and play with their peers and develop important social skills. The Civil Rights Division will not allow the exclusion of children with seizure disorders where life-saving medication can be safely administered by trained laypersons.”
“Federal law prohibits businesses from discriminating against children with disabilities,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland.
Under the agreement, Camp Bravo will admit the child for all future camp sessions of the child’s choosing, as long as she is of eligible age, and will pay $8,000 to the family to compensate them for Camp Bravo’s failure to admit the child when she previously applied. In addition, Camp Bravo will train its staff on the ADA and, if a child with epilepsy is enrolled in the camp, on epilepsy and seizures. The camp will also adopt and enforce a nondiscrimination policy, as well as an emergency anti-seizure medication administration policy and procedure. The department will monitor Camp Bravo’s compliance with the agreement for three years.
ADA enforcement is a top priority of the Justice Department’s Civil Rights Division. Those interested in finding out more about this settlement or the obligations of camps and child care programs under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed online at http://www.ada.gov/complaint/.
Justice Department Files Consent Decree to Ensure Equal Educational Opportunities for All English Learner Students in San FranciscoRead the Press Release
The Justice Department announced that it has sought court approval today of a comprehensive modified consent decree in the landmark case of Lau v. Nichols, in which the Supreme Court held that public schools must provide meaningful access to their educational programs for English Learner (EL) students. The proposed modified consent decree would require the San Francisco Unified School District (SFUSD) to provide language services to the more than 16,000 EL students enrolled in its 105 regular education schools and five court (i.e., serving detained and incarcerated students) and county schools.
The proposed modified consent decree was jointly filed by the department, SFUSD and the private plaintiffs, and would replace a 2008 court order. The proposed modified consent decree resulted from monitoring by the department and the private plaintiffs, and from SFUSD’s own recognition that the 2008 order needed to be updated to reflect current circumstances.
The proposed modified consent decree would require the district to implement comprehensive measures to ensure that ELs have equal opportunities to succeed academically in district educational programs. If approved by the court, the modified consent decree would require SFUSD to:
- ensure that EL students are appropriately identified and placed when they begin school;
- provide families with a suite of service options for their EL students’ education;
- ensure that EL students with disabilities receive language programs and services;
- require employees who serve EL students to have training appropriate to their roles;
- protect the educational rights of the district’s most at-risk and vulnerable EL students who are learning in alternative education or juvenile justice settings;
- communicate with Limited English Proficient families in a language they understand; and
- conduct robust monitoring.
“Today, the San Francisco Unified School District made important strides toward promoting the success of every student from the moment the child enters the district,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “As the American dream is rooted in education, we commend the district for taking this critical step toward ensuring that all students, no matter their language background, have an equal opportunity to access that dream.”
“The department applauds the Superintendent and Board of Education for agreeing to take these significant steps to fulfill the promise of the Supreme Court's holding in Lau,” said U. S. Attorney Melinda Haag of the Northern District of California. “Faithful implementation of this decree will ensure that all EL students are appropriately identified and served, and that Limited English Proficient families have an equal ability to participate in their child’s education.”
The enforcement of Title VI of the Civil Rights Act of 1964 and the Equal Educational Opportunities Act of 1974 are top priorities of the Justice Department’s Civil Rights Division. Additional information about these statutes and the obligations of school districts and states to EL students is available at http://www.justice.gov/crt/about/edu/documents/elsguide.php, and general information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Justice Department Files Consent Decree to Ensure Equal Educational Opportunities for All English Learner Students in San FranciscoRead the Press Release
SAN FRANCISCO – The Justice Department announced that it has sought court approval today of a comprehensive modified consent decree in the landmark case of Lau v. Nichols, in which the Supreme Court held that public schools must provide meaningful access to their educational programs for English Learner (EL) students. The proposed modified consent decree would require the San Francisco Unified School District (SFUSD) to provide language services to the more than 16,000 EL students enrolled in its 105 regular education schools and five court (i.e., serving detained and incarcerated students) and county schools.
The proposed modified consent decree was jointly filed by the department, SFUSD and the private plaintiffs, and would replace a 2008 court order. The proposed modified consent decree resulted from monitoring by the department and the private plaintiffs, and from SFUSD’s own recognition that the 2008 order needed to be updated to reflect current circumstances.
The proposed modified consent decree would require the district to implement comprehensive measures to ensure that ELs have equal opportunities to succeed academically in district educational programs. If approved by the court, the modified consent decree would require SFUSD to:
- ensure that EL students are appropriately identified and placed when they begin school;
- provide families with a suite of service options for their EL students’ education;
- ensure that EL students with disabilities receive language programs and services;
- require employees who serve EL students to have training appropriate to their roles;
- protect the educational rights of the district’s most at-risk and vulnerable EL students who are learning in alternative education or juvenile justice settings;
- communicate with Limited English Proficient families in a language they understand; and
- conduct robust monitoring.
“The department applauds the Superintendent and Board of Education for agreeing to take these significant steps to fulfill the promise of the Supreme Court's holding in Lau,” said U. S. Attorney Melinda Haag of the Northern District of California. “Faithful implementation of this decree will ensure that all EL students are appropriately identified and served, and that Limited English Proficient families have an equal ability to participate in their child’s education.”
“Today, the San Francisco Unified School District made important strides toward promoting the success of every student from the moment the child enters the district,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “As the American dream is rooted in education, we commend the district for taking this critical step toward ensuring that all students, no matter their language background, have an equal opportunity to access that dream.”
The enforcement of Title VI of the Civil Rights Act of 1964 and the Equal Educational Opportunities Act of 1974 are top priorities of the Justice Department’s Civil Rights Division.
Judge Imposes Death Sentence for Boston Marathon BomberRead the Press Release
Boston – A federal judge in Boston formally sentenced Dzhokhar A. Tsarnaev today for his role in using weapons of mass destruction at the 2013 Boston Marathon. United States District Judge George A. O’Toole imposed a sentence of death and multiple consecutive life sentences.
In May 2014, a federal jury in Boston recommended that Dzhokhar A. Tsarnaev be sentenced to death. The counts on which the jury recommended a death sentence all related to the pressure cooker bomb Tsarnaev planted and detonated in front of the Forum restaurant, killing Lingzi Lu and Martin Richard. The same jury convicted Tsarnaev on all 30 counts of the indictment on April 8, 2015.
Tsarnaev, 21, a U.S. citizen formerly residing in Cambridge, Mass., was convicted of use of a weapon of mass destruction resulting in death and conspiracy; bombing of a place of public use resulting in death and conspiracy; malicious destruction of property resulting in death and conspiracy; use of a firearm during and in relation to a crime of violence; use of a firearm during and in relation to a crime of violence causing death; carjacking resulting in serious bodily injury; interference with commerce by threats or violence; and aiding and abetting.
Beginning no later than February 2013, Tsarnaev and his brother, Tamerlan Tsarnaev, conspired to detonate improvised explosive devices (IEDs), bomb places of public use, and destroy property. On April 15, 2013, during the 117th running of the Boston Marathon, the brothers placed two pressure cooker bombs filled with shrapnel among the crowds of spectators on Boylston Street and then detonated the bombs seconds apart, killing three people, maiming 17, and injuring hundreds more. The brothers fled the scene in the chaos of the destruction. Three days later, on April 18, Tsarnaev and his brother, armed with five IEDs and a Ruger semiautomatic pistol that Tsarnaev had borrowed from a friend, drove to the MIT campus where they shot and killed MIT Police Officer Sean Collier and attempted to steal his service weapon. Approximately 20 minutes later, they carjacked a Mercedes SUV, kidnapped the driver, and forced him to drive to a gas station, robbing him of $800 along the way. After the driver managed to escape, the brothers drove to Laurel Street and Dexter Avenue in Watertown, where they exploded additional IEDs and engaged in a firefight with Watertown police officers. During the stand-off, Tsarnaev drove the carjacked vehicle at three officers, attempting to kill them, and ran over his brother as he escaped. Tsarnaev hid in a winterized boat in a Watertown backyard until his apprehension and arrest the following night. His brother died from injuries sustained at the scene.
United States Attorney Carmen M. Ortiz; John Carlin, Assistant Attorney General of the Justice Department’s National Security Division; Leslie R. Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Boston Police Commissioner William Evans; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Michael Shea, Deputy Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement.
This investigation was conducted by the FBI’s Boston Division, Boston Police Department, Massachusetts State Police, Department of Justice’s National Security Division, and member agencies of the Boston Joint Terrorism Task Force, including the Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations, U.S. Marshals Service, Massachusetts Bay Transit Authority and others. In addition, the Watertown Police Department, the Cambridge Police Department, the MIT Police Department, the Boston Fire Department, the National Guard and police, fire and emergency responders from across Massachusetts and New England played critical roles in the investigation and response.
This case was prosecuted by Assistant U.S. Attorneys William Weinreb, Aloke Chakravarty, and Nadine Pellegrini of the U.S. Attorney’s Office for the District of Massachusetts's Anti-Terrorism and National Security Unit, and Trial Attorney Steve Mellin of the Justice Department’s Capital Case Section. Vital assistance was also provided by attorneys from the National Security Division’s Counterterrorism Section and the Criminal Division’s Capital Case Section.
Jacksonville Woman Indicted for Alien Smuggling, Labor Trafficking, and Sex Trafficking CrimesRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Esthela M. Clark (46, Jacksonville) with alien smuggling, labor trafficking, and sex trafficking offenses. If convicted on all counts, she faces a maximum penalty of life in federal prison. The indictment also notifies Clark that the United States intends to forfeit two motor vehicles, which are alleged to have been used in the offenses.
According to court documents, Clark fraudulently induced a young woman from Mexico to travel illegally to the United States under the fraudulent promise and pretense that the woman would be paid to be a surrogate mother as part of a medically supervised and lawful surrogate pregnancy. After smuggling the woman into the United States, Clark began attempting various non-medical inseminations of the woman with the semen of Clark’s boyfriend and others. Clark performed these inseminations using a household syringe on the dining room floor of her residence. Once those efforts failed, Clark forced the victim to have sex with two strangers through threats of force and coercion. Shortly after the woman had arrived in the United States, Clark isolated her and confiscated her official forms of identification. For more than two years, Clark used force, threats of force, and also threatened abuse of the legal process to keep the woman in a perpetual state of involuntary servitude and forced labor. A concerned citizen rescued the young woman and contacted law enforcement.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Jacksonville Sheriff’s Office, and the United States Border Patrol. It will be prosecuted by Assistant United States Attorney Mac D. Heavener, III.
Inmate Sentenced to 15 Years in Prison in Baltimore Jail Racketeering ConspiracyRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced inmate Joseph Young, a/k/a Monster, age 33, of Baltimore, today to 15 years in prison, followed by three years of supervised release, for participating in a racketeering conspiracy and drug conspiracy, involving the smuggling of drugs and contraband inside the Baltimore City Detention Center (BCDC), and for money laundering conspiracy. Young was convicted on February 5, 2015, after a more than two month long jury trial.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Secretary Stephen T. Moyer of the Maryland Department of Public Safety and Correctional Services (DPSCS); Baltimore Police Commissioner Anthony W. Batts; and Baltimore City State’s Attorney Marilyn Mosby.
According to trial testimony and court documents, BGF has been the dominant gang at the Baltimore City Detention Center (BCDC), and in several connected facilities, including the Baltimore Central Booking Intake Center, the Women’s Detention Center, which houses many men, and in the Jail Industries Building. Tavon White and other BGF leaders and members incarcerated at BCDC were involved with and often directed the smuggling of contraband into BCDC, including cell phones, tobacco and drugs, through the services of correctional officers (COs), who received payments, gifts, or a share of the profits.
Evidence presented at trial showed that Young was a high-ranking BGF member and a rival of Tavon White within BGF while he was incarcerated at BCDC beginning in early 2012. Young was expected to replace Tavon White as BGF’s leader inside the jail. In October and November 2012, Young sold marijuana, prescription pills, cell phones and tobacco that correctional officers smuggled into the jail. Young directed another inmate, Cyrus Beads, to buy marijuana at $350 an ounce and package it in one-gram bags, which he would sell for $50 inside BCDC. Young explained that they would make a $1,050 profit from each ounce. Young had a romantic relationship with Raylanair Reese, who lived outside the jail and supplied Young with cell phones and Percocet pills. Evidence at trial also showed that Correctional Officer Kimberly Dennis was a major smuggler of contraband for Young.
This case was developed as a result of the efforts of the Maryland Prison Task Force, formed in 2011 with the Maryland Department of Public Safety and Correctional Services, local, state and federal law enforcement agencies, and prosecutors. The Task Force has met regularly for over three years, generating recommendations to reform prison procedures and producing leads that have been pursued by state, local and federal criminal investigators. Investigations are continuing.
Forty of the 44 defendants charged in the racketeering conspiracy have been convicted, including 24 correctional officers. Thirty-five defendants pleaded guilty and five defendants were convicted after trial. Three defendants were acquitted and one defendant died.
BGF leader Tavon White, age 37, previously pleaded guilty to his participation in the racketeering conspiracy and testified at the trial and was sentenced to 12 years in prison. Inmate Russell Carrington, a/k/ Rutt, age 34, of Baltimore, also a leader in the BGF gang, was convicted after trial and sentenced to 210 months in prison.
To date, 21 of the correctional officers have been sentenced to up to 42 months in prison. Outside supplier Raylanair Reese, age 33, and Correctional Officer Kimberly Dennis, age 27, both of Baltimore, pleaded guilty to their roles in the conspiracy and were sentenced to 34 months and two years in prison, respectively.
U.S. Attorney Rosenstein recognized the efforts of the other members of the Maryland Prison Task Force, including: the Maryland State Police, Prince George’s County Police Department, United States Marshals Office, DEA, Washington-Baltimore High Intensity Drug Trafficking Area and Maryland Coordination and Analysis Center.
United States Attorney Rod J. Rosenstein praised the FBI, Maryland Department of Public Safety and Correctional Services, Baltimore Police Department, and Maryland Prison Task Force, for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Humboldt County Juvenile Corrections Officer Pleads Guilty to Possession of Child PornographyRead the Press Release
SAN FRANCISCO, Calif. – Keith Monroe Wallace pleaded guilty today to possession of child pornography, announced U.S. Attorney Melinda Haag and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Tatum King.
Until he was arrested, Wallace, 53, of Eureka, Calif., was employed by the Humboldt County Juvenile Probation Office as a Supervising Juvenile Corrections Officer in the Northern California Regional Facility in Eureka. In connection with his guilty plea, Wallace admitted he knowingly possessed 600 or more visual depictions of prepubescent minors or minors who had not attained 12 years of age engaging in sexually explicit conduct. The images included depictions of sadistic or masochistic conduct or other depictions of violence.
According to court documents, federal law enforcement agents with HSI were led to Wallace as a result of an investigation into the sexual exploitation of children in the Northern District of California. On February 26, 2015, a federal search warrant was executed at Wallace’s residence in Eureka, California. HSI agents and Humboldt County District Attorney Investigators seized various computers and digital media storage devices pursuant to the search warrant. A forensic review of the computers and digital media storage devices seized from Wallace’s residence revealed the existence of videos and images depicting minors engaging in sexually explicit conduct. Wallace was taken into federal custody at the time of the execution of the search warrant.
Wallace was indicted by a federal grand jury on March 10, 2015, with one count of possession of child pornography, in violation of Title 18, United States Code, Sections 2252(a)(4)(B) and (b)(2). Under the plea agreement, Wallace pleaded guilty to that count.
Wallace is currently being held in custody. His sentencing hearing is scheduled for September 9, 2015, at 10:00 a.m. before the Honorable Charles R. Breyer, U.S. District Judge, in San Francisco. The maximum statutory penalty for one count of possession of child pornography in violation of Title 18, United States Code, Sections 2252(a)(4)(B) and (b)(2), is 20 years in prison, a fine of $250,000, and restitution to the victims. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Claudia A. Quiroz is prosecuting the case with the assistance of Marina Ponomarchuk. The prosecution is the result of an investigation by the HSI Child Exploitation Investigations Group, as well as investigators from the Humboldt County District Attorney’s Office.
If members of the public have any information relevant to this investigation or regarding online child sexual exploitation crimes they are encouraged to call the ICE tip line at 1-866-347-2423 (1-866-DHS-2ICE).
Hampden Resident Sentenced to 2½ Years for Lying and Buying FirearmsRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Michael Campbell, 31, of Hampden, Maine was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr., to 2½ years in prison and 3 years of supervised release for conspiring to make false statements to a federal firearms licensee. He pleaded guilty to the charge on October 2, 2014.
According to court records, on two occasions in June 2012, Campbell went to Jimi’s Trading Center, a federal firearms licensee and dealer of firearms located in Brewer, Maine, and falsely completed federal firearms application forms certifying that he was the actual buyer of handguns, when, in fact, he had been asked to purchase them by people prohibited under federal law from buying them. Prior to each occasion, Campbell met with the prohibited persons, was told what handguns to buy and where to buy them, and was given cash to do so. After each purchase, he delivered the handguns to the prohibited persons.
The case was investigated by the Maine Drug Enforcement Agency, the Bureau of Alcohol Tobacco Firearms and Explosives (New Haven, Connecticut Office), and the New Haven Police Department.
Glen Daniel man sentenced for federal drug trafficking chargeRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced that Michael Erwin Basham, 35, of Glen Daniel, was sentenced today to serve two years in federal prison, followed by a one year term of supervised release. Basham previously pled guilty in February of 2015, to using a telephone to arrange a sale of oxycodone to a person cooperating with law enforcement authorities. The phone call was made near Glen Daniel.
The Beckley/Raleigh County Drug and Violent Crime Unit conducted the investigation.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
Georgia Man Pleads Guilty to Failing to Register as a Sex OffenderRead the Press Release
Contact: Michael J. Conley
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that James Robert Underwood, 43, of Dalton, Georgia, and formerly of Old Orchard Beach, Maine, pled guilty today in U.S. District Court to failing to register as a sex offender.
According to evidence introduced at the plea hearing, in 1999, Underwood was convicted in Georgia of rape and other charges. He was sentenced to 10 years in prison and was released in 2009. The rape conviction required him to register under the Sex Offender Registration and Notification Act in Georgia and any other state where he established residency. In March 2012, Underwood established residency in Old Orchard Beach, but failed to register as required.
Underwood faces up to 10 years in prison and a $250,000 fine. He will be sentenced after completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the United States Marshals Service.
Former Public Health Care Employee Convicted of Selling More Than 400 Social Security Numbers Used in Fraudulent Tax Refund SchemeRead the Press Release
BATON ROUGE, LA –United States Attorney Walt Green announced that TA’SHA THOMAS, age 26, of Donaldsonville, Louisiana, pled guilty before Senior U.S. District Judge James J. Brady to access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2), and aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
During the guilty plea hearing, THOMAS admitted to gaining access to personal identifying information of individuals in the COMPASS database through her work at the Ascension Parish Health Unit. She also admitted to taking the personal identifying information and selling it to Mona Hill, who in turn used the information to file fraudulent federal tax returns, ultimately receiving more than $400,000 based on such returns. As THOMAS admitted, between January and August of 2012, she sold more than 400 access devices to Mona Hill. In exchange, THOMAS was paid between $8,000 and $9,000. Mona Hill has been separately prosecuted and convicted by this office. Hill was sentenced to serve sixty-five months in federal prison and pay $491,268.18 in restitution to the IRS.
U.S. Attorney Green stated: “My office will continue to aggressively pursue criminals who commit identity theft and use those stolen identities to defraud the United States and line their own pockets. We look forward to continuing to work with our partners at IRS-CI and other agencies in the fight against such conduct.”
“We are pleased with the conviction of Ms. Thomas. The IRS will aggressively pursue individuals who are involved in stolen identity refund fraud,” said Jerome R. McDuffie, Special Agent-in-Charge, IRS Criminal Investigation. “This case should serve as a strong warning to those who are considering similar conduct. Law enforcement will relentlessly pursue those who steal the identities of unsuspecting individuals.”
This ongoing investigation is being conducted by the Internal Revenue Service’s Criminal Investigation Division. This matter is being prosecuted by Assistant United States Attorney Jessica M.P. Thornhill.
Former New Hampshire Construction Company Owner Pleads Gulty to Tax EvasionRead the Press Release
WASHINGTON – A Hill, New Hampshire, man pleaded guilty today to three counts of tax evasion in the U.S. District Court in the District of New Hampshire, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney Donald Feith of the District of New Hampshire.
Ronald Martin formerly owned and operated Martin Construction in Northfield, New Hampshire, and employed between three to eight individuals at various times. In 2008, 2009 and 2010, Martin’s business earned a total of approximately $1.2 million in gross revenue, but Martin did not file any federal corporate or individual income tax returns for Martin Construction or for himself and did not pay any federal income tax in any of those years. Martin took steps to conceal the business revenue by directing that payments and invoices for selling scrap metal be made in the name of his nephew. He also only deposited a small fraction of the income earned from Martin Construction into the business’ bank account. Instead, he diverted a significant portion of the business income for personal expenditures. In addition to failing to file tax returns and to pay individual and business income taxes, Martin also failed to file any federal employment tax returns or pay over to the Internal Revenue Service (IRS) any federal employment taxes for any of his employees.
A federal grand jury in the District of New Hampshire indicted Martin on three counts of tax evasion in July 2014. Martin faces a statutory maximum sentence of five years in prison and a fine of $250,000 on each tax evasion count. Martin’s sentencing hearing is scheduled for Oct. 20. Martin currently is detained on unrelated pending state criminal charges.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Feith commended the special agents of IRS–Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Mark S. Zuckerman of the District of New Hampshire and Senior Litigation Counsel Corey J. Smith of the Tax Division, who are prosecuting the case.
Former Lowndes County, Georgia, Sheriff's Deputy and Civilian Co-Conspirators Sentenced for Civil Rights Conspiracy ChallengeRead the Press Release
Former Lowndes County Sheriff’s Deputy Jason Stacks, 29, was sentenced today to serve 21 months in prison and two years supervised release for his role in a civil rights conspiracy aimed at stealing money from Hispanic motorists, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division and U. S. Attorney Michael J. Moore of the Middle District of Georgia. Also sentenced today were two civilians – Gloria Gallego and Miguel Angel Reyes – who will serve 24 months and 30 months in prison, respectively, as well as three years supervised release for conspiring with Stacks to use his law enforcement authority to unlawfully detain and steal money from the motorists.
On May 6, 2014, Stacks pleaded guilty to a civil rights conspiracy charge, admitting that he participated in a plan with the civilians to subject Hispanic motorists to unlawful traffic stops so that his co-conspirators could then demand that the motorists pay money in order to avoid arrest and/or deportation. On Mar. 26, 2015, Gallego and Reyes pleaded guilty to the same charge. According to information made public in the plea hearings, Stacks, while acting as a sheriff’s deputy, unlawfully detained at least four motorists on Aug. 17, 2013. One of the motorists, who was identified in the plea documents by the initials T.C., was unlawfully detained by Stacks and then approached by Gallego and Reyes, who posed as bilingual passers-by who wanted to help T.C. Gallego and Reyes told T.C. in Spanish that he would be sent to jail or deported if he did not pay them $500. When T.C. responded that he did not have $500 in his car, the conspirators agreed to let T.C. go home to get the money from his relatives. Gallego and Reyes drove T.C. to his residence and took $300 in cash from him. Stacks, Gallego, and Reyes then divided the money among them.
“Stacks abused his authority by engaging in a scheme with two accomplices to target and steal money from those he was sworn to protect,” said Principal Deputy Assistant Attorney General Gupta. “The Justice Department will hold accountable officers who violate their oath by violating the civil rights of members of the public.”
“Law enforcement officers take an oath to protect and serve the public and, based on the duty and responsibility that imposes, the public in turn invests them with great authority and respect,” said U.S. Attorney Moore. “The abuse of that power and authority, such as happened here, lessens that respect and trust by the public in all law enforcement, thus victimizing not only the victims specifically targeted but all law enforcement officers everywhere as well as the public generally.”
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Trial Attorney Risa Berkower of the Justice Department’s Civil Rights Division, with the assistance of the United States Attorney’s Office for the Middle District of Georgia and the Lowndes County Sheriff’s Office.
Former Lowndes County, Georgia Sheriff's Deputy and Civilian Co-Conspirators Sentenced for Civil Rights Conspiracy ChargeRead the Press Release
WASHINGTON – Former Lowndes County Sheriff’s Deputy Jason Stacks, 29, was sentenced today to serve 21 months in prison and two years supervised release for his role in a civil rights conspiracy aimed at stealing money from Hispanic motorists, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division and U. S. Attorney Michael J. Moore of the Middle District of Georgia. Also sentenced today were two civilians – Gloria Gallego and Miguel Angel Reyes – who will serve 24 months and 30 months in prison, respectively, as well as three years supervised release for conspiring with Stacks to use his law enforcement authority to unlawfully detain and steal money from the motorists.
On May 6, 2014, Stacks pleaded guilty to a civil rights conspiracy charge, admitting that he participated in a plan with the civilians to subject Hispanic motorists to unlawful traffic stops so that his co-conspirators could then demand that the motorists pay money in order to avoid arrest and/or deportation. On Mar. 26, 2015, Gallego and Reyes pleaded guilty to the same charge. According to information made public in the plea hearings, Stacks, while acting as a sheriff’s deputy, unlawfully detained at least four motorists on Aug. 17, 2013. One of the motorists, who was identified in the plea documents by the initials T.C., was unlawfully detained by Stacks and then approached by Gallego and Reyes, who posed as bilingual passers-by who wanted to help T.C. Gallego and Reyes told T.C. in Spanish that he would be sent to jail or deported if he did not pay them $500. When T.C. responded that he did not have $500 in his car, the conspirators agreed to let T.C. go home to get the money from his relatives. Gallego and Reyes drove T.C. to his residence and took $300 in cash from him. Stacks, Gallego, and Reyes then divided the money among them.
“Stacks abused his authority by engaging in a scheme with two accomplices to target and steal money from those he was sworn to protect,” said Principal Deputy Assistant Attorney General Gupta. “The Justice Department will hold accountable officers who violate their oath by violating the civil rights of members of the public.”
“Law enforcement officers take an oath to protect and serve the public and, based on the duty and responsibility that imposes, the public in turn invests them with great authority and respect,” said U.S. Attorney Moore. “The abuse of that power and authority, such as happened here, lessens that respect and trust by the public in all law enforcement, thus victimizing not only the victims specifically targeted but all law enforcement officers everywhere as well as the public generally.”
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Trial Attorney Risa Berkower of the Justice Department’s Civil Rights Division, with the assistance of the United States Attorney’s Office for the Middle District of Georgia and the Lowndes County Sheriff’s Office.
Former Eugene Gang Member Sentenced to 10 Years in Federal PrisonRead the Press Release
EUGENE, Ore. – Cory Charles Weise, 33, Eugene, Oregon, was sentenced on Wednesday, June 24, 2015, by U.S. District Judge Michael McShane to 120 months in prison for possession with intent to distribute methamphetamine and felon in possession of a firearm. Following his release from prison, Weise will be on supervised release for three years.
Weise was a well-known member of the West Side Gangsters in Lane County, Oregon, and his activities were investigated by the Eugene Police Department (EPD) and the FBI. On November 13, 2013, EPD detectives executed a search warrant at his Eugene residence and in a safe located two firearms and ten grams of a mixture or substance containing methamphetamine. As a convicted felon, Weise was prohibited from possessing firearms. Scales and packaging material were found in his bedroom, and $1,170 cash was found on his person.
The investigation of this case was conducted by the Eugene Police Department Special Investigations Unit and the Eugene Resident Agency office of the FBI. The case was prosecuted by Assistant U.S. Attorney Jeffrey Sweet.
Former Corrections Officer Sentenced for Prison Tax Refund SchemeRead the Press Release
Jacksonville, Florida – United States Senior District Judge Henry Lee Adams, Jr. has sentenced Silvester L. Bowens (49, Jacksonville) to one year and one day in federal prison for conspiracy to defraud the United States and for receiving stolen property of the United States, namely tax refunds in excess of $1,000. He was also ordered to serve a 2-year term of supervised release and to pay the Internal Revenue Service $41,989.17 in restitution. Bowens pleaded guilty on July 1, 2014.
According to court documents, between January 2009 and December 2011, while working with inmates inside a State of Florida prison as a Wellness Director, Bowens participated in a tax refund scheme in which he assisted inmates in removing fraudulently filed tax returns from inside the prison. Bowens opened bank accounts in his name to receive the refunds from the fraudulent returns. As a result of the scheme, more than 40 fraudulent tax returns were filed, directing $386,471 into accounts held by Bowens.
Bowens, along with five others, was indicted in April 2014. Each of the six individuals subsequently pleaded guilty for their respective roles in the scheme. Co-conspirators Tiffani Manning, Christopher Wyant, and Tabatha Dubois were previously sentenced. The sentencing hearings for the remaining defendants, Laura Wright and Chad R. Heins, are scheduled for August 11, 2015.
The case was investigated by the Internal Revenue Service - Criminal Investigation and the Florida Department of Corrections. Assistant United States Attorney Kelly S. Karase is handling the prosecution of this case.
For-Profit Education Company to Pay $13 Million to Resolve Several Cases Alleging Submission of False Claims for Federal Student AidRead the Press Release
Settlement Resolves Allegations and Administrative Claims Involving Schools in Five States
Education Affiliates (EA), a for-profit education company based in White Marsh, Maryland, has agreed to pay $13 million to the United States to resolve allegations that it violated the False Claims Act by submitting false claims to the Department of Education for federal student aid for students enrolled in its programs. EA operates 50 campuses in the United States under various trade names, including All State Career, Fortis Institute, Fortis College, Tri-State Business Institute Inc., Technical Career Institute Inc., Capps College Inc., Driveco CDL Learning Center, Denver School of Nursing and Saint Paul’s School of Nursing, which provide post-secondary education training programs in several professions in the states of Alabama, Florida, Maryland, Ohio and Texas.
“Today’s settlement is an excellent example of cooperation among multiple offices of the federal government to achieve a result that protects federal student aid funding and the interests of individual students,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Schools have an obligation to live up to their commitment to the government and their students when they accept federal student aid funds.”
The government alleged that employees at EA’s All State Career campus in Baltimore altered admissions test results so as to admit unqualified students, created false or fraudulent high school diplomas and falsified students’ federal aid applications, and that multiple EA schools referred prospective students to “diploma mills” to obtain invalid online high school diplomas. These allegations also led to criminal convictions of two All State Careers admission representatives, Barry Sugarman and Jesse Moore, and a test proctor, Jacqueline Caldwell.
“Students who apply for federal financial aid to attend trade and professional schools are required to show that they have the necessary skills to complete the educational program and work in the field,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland. “This settlement resolves the government's allegations that Education Affiliates defrauded the government by changing students' test scores and enrolling students with invalid diploma mill high school ‘diplomas’ ordered online.”
“The various cases that were settled here include numerous allegations of predatory conduct that victimized students and bilked taxpayers,” said Under Secretary Ted Mitchell of the U.S. Department of Education. “In particular, the settlement provides for repayment of $1.9 million in liabilities ordered by Secretary of Education Arne Duncan that resulted from EA awarding federal financial aid to students at its Fortis-Miami campus based on invalid high school credentials issued by a diploma mill. Secretary Duncan made clear that such abusive behavior would not be tolerated, and we will continue to work with the Justice Department and other federal agencies to ensure that postsecondary institutions face consequences when they violate the law.”
The settlement agreement also resolves allegations related to EA schools in Birmingham, Alabama, Houston and Cincinnati, including violations of the ban on incentive compensation for enrollment personnel, misrepresentations of graduation and job placement rates, alteration of attendance records and enrollment of unqualified students.
“Using fake high school diplomas is a particularly insidious abuse of the federal student aid system,” said Inspector General Kathleen Tighe of the U.S. Department of Education’s Office of Inspector General (OIG). “Students received only a worthless piece of paper.” Tighe commended the efforts of OIG staff and Department of Justice attorneys, whose outstanding investigative work led to this significant settlement.
The settlement resolves five lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in the recovery. As part of this resolution, the five whistleblowers will receive payments totaling approximately $1.8 million.
The settlements were the result of a coordinated effort by the U.S. Attorneys’ Offices of the District of Maryland, the Southern District of Texas, the Northern District of Alabama, Southern District of Ohio and the Middle District of Tennessee, as well as the Civil Division’s Commercial Litigation Branch, and the Department of Education and its OIG.
The cases are captioned United States ex rel. Roman v. All State Career, Inc. and Education Affiliates, Inc., Civil Case No. JKB-10-1730 (D.Md.); United States ex rel. Thomas v. Education Affiliates, Inc., Civil Case No. JKB-14-332 (D.Md.); United States ex rel. Andrews v. Education Affiliates, Inc., et al., Civil Case No. H-13-2366 (S.D. Tex.); United States ex rel. Atkins, et al. v. Fortis Institute and Education Affiliates, LLC, Civil Case No. CV-14-1107-S (N.D. Ala.); and United States ex rel. McArthur, Gruff & Associates LLC v. Education Affiliates, Inc., Civil Case No. 1:14-CV-977 (S.D. Oh.). The False Claims Act claims resolved by the settlement are allegations only, and there has been no determination of liability.
For Profit Education Company to Pay $13 Million to Resolve Cases Alleging Submission of False Claims for Federal Student AidRead the Press Release
Baltimore, Maryland – Education Affiliates (“EA”), a for-profit education company based in White Marsh, Maryland, has agreed to pay $13,000,000 to the United States to resolve allegations that it violated the False Claims Act by submitting false claims to the Department of Education for federal student aid for students enrolled in its programs.
The settlement agreement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein; Principal Deputy Assistant Attorney General Benjamin Mizer of the U.S. Department of Justice Civil Division; U.S. Under Secretary of Education Ted Mitchell; and Inspector General Kathleen Tighe of the U.S. Department of Education Office of Inspector General; United States Attorney for the Southern District of Texas Kenneth Magidson; United States Attorney for the Northern District of Alabama Joyce White Vance; United States Attorney for the Southern District of Ohio Carter M. Stewart; and United States Attorney for the Middle District of Tennessee David Rivera.
“Students who apply for federal financial aid to attend trade and professional schools are required to show that they have the necessary skills to complete the educational program and work in the field,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland. “This settlement resolves the government's allegations that Education Affiliates defrauded the government by changing students' test scores and enrolling students with invalid diploma mill high school 'diplomas' ordered online.”
“Today’s settlement is an excellent example of cooperation among multiple offices of the federal government to achieve a result that protects federal student aid funding and the interests of individual students,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Schools have an obligation to live up to their commitment to the government and their students when they accept federal student aid funds.”
EA provides post-secondary education training programs in a variety of healthcare and trade professions. EA operates 50 campuses in the states of Maryland, Florida, Texas, Alabama and Ohio under various trade names, including All State Career, Fortis Institute, Fortis College, Tri-State Business Institute Inc., Technical Career Institute Inc., Capps College Inc., Driveco CDL Learning Center, Denver School of Nursing and Saint Paul’s School of Nursing, which provide post-secondary education training programs in several professions in the states of Alabama, Florida, Maryland, Ohio and Texas.
The government alleged that employees at EA’s All State Career campus in Baltimore altered admissions test results so as to admit unqualified students, created false or fraudulent high school diplomas, and falsified students’ federal aid applications, and that multiple EA schools referred prospective students to “diploma mills” to obtain invalid online high school diplomas. These allegations also led to criminal convictions of two All State Careers admission representatives, Barry Sugarman and Jesse Moore, and a test proctor, Jacqueline Caldwell.
“The various cases that were settled here include numerous allegations of predatory conduct that victimized students and bilked taxpayers,” said Under Secretary Ted Mitchell of the U.S. Department of Education. “In particular, the settlement provides for repayment of $1.9 million in liabilities ordered by Secretary of Education Arne Duncan that resulted from EA awarding federal financial aid to students at its Fortis-Miami campus based on invalid high school credentials issued by a diploma mill. Secretary Duncan made clear that such abusive behavior would not be tolerated, and we will continue to work with the Justice Department and other federal agencies to ensure that postsecondary institutions face consequences when they violate the law.”
The settlement agreement also resolves allegations related to EA schools in Birmingham, Alabama, Houston and Cincinnati, including violations of the ban on incentive compensation for enrollment personnel, misrepresentations of graduation and job placement rates, alteration of attendance records and enrollment of unqualified students.
“Using fake high school diplomas is a particularly insidious abuse of the federal student aid system,” said Inspector General Kathleen Tighe of the U.S. Department of Education Office of Inspector General. “Students received only a worthless piece of paper.” Tighe commended the efforts of Office of Inspector General staff and Department of Justice attorneys whose outstanding investigative work led to this significant settlement.
The settlement resolves five lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in the recovery. As part of this resolution, the five whistleblowers will receive payments totaling approximately $1.8 million.
The settlements were the result of an investigation by the U.S. Attorney’s Office for the District of Maryland, the Justice Department’s Civil Division, Commercial Litigation Branch, the U.S. Attorney’s Offices for the Southern District of Texas, Northern District of Alabama, Southern District of Ohio, and Middle District of Tennessee, the Department of Education and its Office of Inspector General, and the Federal Bureau of Investigation. Mr. Rosenstein thanked Assistant United States Attorneys Thomas F. Corcoran and Rebecca Koch who handled the Maryland cases.
The cases are captioned United States ex rel. Roman v. All State Career, Inc. and Education Affiliates, Inc., Civil Case No. JKB-10-1730 (D.Md.); United States ex rel. Thomas v. Education Affiliates, Inc., Civil Case No. JKB-14-332 (D.Md.); United States ex rel. Andrews v. Education Affiliates, Inc., et al., Civil Case No. H-13-2366 (S.D. Tex.); United States ex rel. Atkins, et al. v. Fortis Institute and Education Affiliates, LLC, Civil Case No. CV-14-1107-S (N.D. Ala.); and United States ex rel. McArthur, Gruff & Associates LLC v. Education Affiliates, Inc., Civil Case No. 1:14-CV-977 (S.D. Oh.). The False Claims Act claims resolved by the settlement are allegations only and there has been no determination of liability.
Federal Jury Returns Guilty Verdicts in Junction City Drug Trafficking CaseRead the Press Release
TOPEKA, KAN. - A federal jury here today delivered guilty verdicts against four defendants charged with trafficking crack cocaine in the Junction City and Manhattan areas, U.S. Attorney Barry Grissom said.
During trial, prosecutors presented evidence that in late 2012 and early 2013 agents of Kansas Bureau of Investigation and detectives from the Junction City Police Department investigated a large crack cocaine trafficking organization in Junction City and Manhattan. The organization was led by defendants Albert Banks and Anthony Thompson, who acquired the drugs from three different suppliers and sold the drugs to distributors who resold them on the streets.
The jury returned guilty verdicts against:
Albert Dwayne Banks, 33, Junction, City, Kan, count one (conspiracy to distribute crack cocaine), count eight (distributing crack cocaine, count 11 (distribution crack cocaine), count 12 (distributing crack cocaine), count 15 (distributing crack cocaine) count 16 (distributing crack cocaine), count 17 (distributing crack cocaine).
Johnny Lee Ivory, III, 29, Topeka, Kan., count one (conspiracy to distribute crack cocaine), count 19 (possession with intent to distribute crack cocaine), count 20 (unlawful possession of a firearm following a felony conviction).
Martye Madabuti Madkins, III, 34, Junction City, Kan., count two (distributing crack cocaine), count four (distributing crack cocaine).
Anthony Caryle Thompson, 33, Junction City, Kan., count one (conspiracy to distribute crack cocaine), count three (distributing crack cocaine), count five (distributing crack cocaine), count six (distributing crack cocaine), count seven (distributing crack cocaine), count eight (distributing crack cocaine), count nine (distributing crack cocaine), count 10 (distributing crack cocaine), count 13, distributing crack cocaine).
Defendants Zachary Carlyle Patmon and Otis Dean Ponds were acquitted.
Sentencing is set for Sept. 28.
The crimes carry the following penalties:
Conspiracy: Not less than 10 years in federal prison and a fine up to $10 million.
Distribution: A maximum penalty of 20 years and a fine up to and a fine up to $1 million on each count.
Unlawful possession of a firearm: A maximum penalty of 10 years and a fine up to $250,000.
Grissom commended the Kansas Bureau of Investigation, the Junction City Police Department, the Geary County Attorney’s Office and and Assistant U.S. Attorney Tony Mattivi for their work on the case.
Federal Grand Jury Indicts San Angelo Man on Prepubescent Child Pornography OffenseRead the Press Release
LUBBOCK, Texas — Michael Patrick Redente, 39, of San Angelo, Texas, was charged in a federal indictment, returned last Wednesday, June 17, by a grand jury in Lubbock, Texas, with one count of possession of prepubescent child pornography, announced Acting U.S. Attorney John R. Parker of the Northern District of Texas.
The indictment alleges that on April 21, 2015, when Homeland Security Investigations executed a search warrant at his residence in San Angelo, Redente possessed a computer hard drive containing prepubescent child pornography. Redente appeared before U.S. Magistrate Judge E. Scott Frost in San Angelo today, and was ordered to remain in custody pending a detention hearing that will be scheduled for a later date in Lubbock.
A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the statutory penalty for possession of prepubescent child pornography is a term of imprisonment of not more than 20 years, a fine of up to $250,000 and a term of supervised release of up to life.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation is being conducted by the Department of Homeland Security, Homeland Security Investigations, and the U.S. Air Force Office of Special Investigations at Goodfellow Air Force Base. Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.
FCI-Greenville Inmate Pleads Guilty to Possession of ContrabandRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on June 23, 2015, Anthony Johnson, 25, pled guilty to an indictment charging him with Possession of Contraband by a Federal Inmate. Johnson was an inmate at the Federal Correctional Institution located in Greenville, Illinois at the time the offense was committed. Johnson faces a term of imprisonment of not more than twenty years, a fine up to $250,000, or both, and a term of supervised release of not more than three years which must be served consecutive, or in addition to his current sentence. Sentencing has been scheduled for September 18, 2015, in East St. Louis, Illinois. Johnson has been held without bond since his arraignment on May 12, 2015.
The charge arose on September 28, 2014, when an officer monitoring the visiting room at FCI-Greenville observed Johnson swallow an unknown object. Based on this behavior, Johnson was immediately placed in a dry cell after his visit ended so that his bowel movements could be monitored. On October 1, 2014, Johnson defecated one balloon which contained a white powdery substance. The substance found in the balloon contained heroin with an approximate weight of 1.1 grams.
The case was investigated by the Bureau of Prisons’ Special Investigation Section. The case is assigned to Assistant United States Attorney Angela Scott.
Ex-Billings High School Coach Pleads Guilty to Child Pornography, Coercion and Enticement ChargesRead the Press Release
BILLINGS – Scott James Nichols, 42, of Lockwood, Montana, pleaded guilty today in Billings federal court to distribution of child pornography, two counts of coercion and enticement, and two counts of attempted coercion and enticement. Nichols pleaded to the five counts pursuant to a Superseding Information. On the child pornography count, he faces a mandatory minimum five to twenty years in prison, up to $250,000 dollars in fines, and five years to lifetime supervised release. On the four coercion and enticement- related counts, he faces a mandatory minimum ten years to life in prison, up to $250,000 in fines, and five years to lifetime supervised release. U.S. District Court Judge Susan P. Watters presided over the change of plea and set the sentencing hearing for October 7, 2015, in Billings, Montana.
In court filings, the government stated that if the case had proceeded to trial, it would have proven that around January 2013, a Bozeman police detective received a tip that an individual had solicited explicit images of underage females. Posing as a 16-year-old girl, the detective made contact with the individual on Facebook. The individual solicited sexual images from the detective posing as the young girl. The detective then executed a search warrant on Facebook and discovered the individual was soliciting many apparently underage females through various social networking website, email addresses and a phone. Through a subpoena, the detective learned that the phone number was assigned to Scott James Nichols.
The detective learned that Nichols was, at that time, the Billings West High School Basketball coach and had recently been employed in the Livingston area as a coach. Further investigation revealed that Nichols was using several online aliases and posing as a teenage high school student. Under two aliases, Nichols asked underage females to send sexually explicit images to a specific phone number. Nichols was interviewed and admitted that the number was his. This was confirmed through the phone company.
An examination of Nichols’ phone revealed that he had used his email to receive sexually explicit images from underage females. He also received and distributed child pornography from this email address. Search warrants revealed that Nichols corresponded with underage females frequently through his email accounts. He would contact them, ask their age, ask if they are alone, and would make sexual comments. He would then encourage them to send him sexually explicit images of themselves. One of the counts he pleaded to involves that type of conduct from a computer with an IP address connected to Billings West High School. The other offense involved Nichols chatting under a fake Facebook name with a young woman who identified herself as 13-years-old. He asked her to send pictures of private areas. That conduct was done from an IP address assigned to Billings West High School. Nichols also had sexual Facebook chats with the teen, who identified herself as 14-years-old. He asked her to send him a sexually explicit photo, which she did. Nichols also Facebook chatted with a girl identifying herself as 14-years-old. Nichols asked her to engage in sexual behavior on a webcam with him. Lastly, in relation to the child pornography distribution count, Nichols sent at least 16 emails with files attached containing images of minors engaged in sexually explicit conduct. As part of his plea, Nichols forfeited his computers and phones used in the commission of the above crimes.
This case was prosecuted by Special Assistant U.S. Attorney Ole Olson and investigated by the Internet Crimes Against Children Task Force, including the Billings Police Department and the Federal Bureau of Investigation.
El Salvador National Pleads Guilty to Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that RAMON ANTONIO SORIANO-CANIZALEZ, age 28, a citizen of El Salvador, pled guilty today to a one-count Indictment charging him with illegal reentry into the United States after having been previously deported.
According to the court documents, SORIANO-CANIZALEZ was encountered by Border Patrol agents in the Eastern District of Louisiana on April 29, 2015, after records showed he had been previously deported from the United States to El Salvador on July 26, 2010.
SORIANO-CANIZALEZ faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment. U.S. District Judge Ivan L.R. Lemelle set sentencing for September 23, 2015.
U.S. Attorney Polite praised the work of the United States Border Patrol in investigating this matter. Assistant United States Attorney Emily K. Greenfield is in charge of the prosecution.
Ramon Antonio Soriano-Canizalez Factual basis.pdf (1000.42 KB)
Detroit man convicted of selling oxycodone near local universityRead the Press Release
CLARKSBURG, WEST VIRGINIA – Tyree Dupree Williams, 21, of Detroit, Michigan, was convicted today of prescription painkiller trafficking, United States Attorney William J. Ihlenfeld, II, announced.Williams, also known as “Killa,” sold oxycodone in Monongalia County, West Virginia in September 2014 near the campus of West Virginia University. He pled guilty today to one count of “Aiding and Abetting Distribution of Oxycodone within 1,000 Feet of a Protected Location.” He faces between one and forty years in prison and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Mon Valley Drug and Violent Crime Task Force investigated.
U.S. Magistrate Judge John S. Kaull presided.
Department of Justice Statement on U.S. Citizens Taken Hostage AbroadRead the Press Release
The Department of Justice released the following statement regarding U.S. citizens who are taken hostage abroad:
When a U.S. citizen is taken hostage, the Department of Justice’s top priority is the safe return of the hostage. The families who have been affected by hostage-takings have endured extraordinarily difficult circumstances. In light of recent hostage-takings perpetrated by terrorist groups, some families have expressed concerns that their efforts to retrieve their loved one could lead to potential prosecutions under the statute prohibiting the provision of material support to designated foreign terrorist organizations. In the face of their loved ones being held captive indefinitely by terrorist groups, families have understandably explored every option to secure their loved ones’ safe recovery.
In these cases, the department has focused on helping the families, consistent with the government’s no-concessions policy, and will continue to focus on exploring all appropriate options. The department does not intend to add to families’ pain in such cases by suggesting that they could face criminal prosecution. Perhaps the best indication of how the department will exercise its prosecutorial discretion in enforcing the material support statute is the department’s past record of prosecuting cases under the statute. The department has never used the material support statute to prosecute a hostage’s family or friends for paying a ransom for the safe return of their loved one.
Defendant Sentenced in the Lawman Gun Shop CaseRead the Press Release
SAN JUAN, Puerto Rico – Julio Medina-Mojica, former President of the Humacao Shooting Range, was sentenced to 27 months in prison for unlawful production of an identification document, specifically, a Puerto Rico Concealed Carry Weapons Permit announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Medina-Mojica pled guilty on March 10, 2015.
On or about the 21st day of May, 2012, in the District of Puerto Rico, the defendants aiding and abetting others, did willfully and knowingly cause, without lawful authority, production of identification documents, authentication features, and false identification documents, to wit, a Commonwealth of Puerto Rico Concealed Carry Weapons Permit under Weapons Permit Number XX129, in coordination with referrals by and through The Lawman Gun Shop using an intermediary who was both his employee and a Police of Puerto Rico auxiliary officer.
Defendant Medina-Mojica falsified that weapons training certifications were completed when they were, in fact, not. The defendant admitted that he did this for pecuniary gain in coordination with referrals by and through the Lawman Gun Shop, a federally licensed firearms dealer. The loss generated during the course of the scheme, which involved possession of five or more means of identification, was greater than $120,000. Medina-Mojica also admitted that there were more than 10 victims in this scheme.
“The defendant was entrusted with certifying that proper training was given for individuals who were issued Concealed Carry Weapons Permit, as mandated by Puerto Rico law,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “This is a regulated process in which firearm instructors or shooting clubs are assigned a specific authorization number and seal by the Police of Puerto Rico that are used to certify the completion form. Rather than fulfill that solemn responsibility, Julio Medina-Mojica, acted in concert with others, and sold pre-signed and stamped forms for $50.00 each. He sold out that responsibility.”
Former attorney Antonio M. Peluzzo-Perotin was sentenced on March 25, 2015, to 90 months in prison, and three years of supervised release.
María Del Carmen Rivera-Negrón and Julio Colón-Santiago co-owned The Lawman Gun Shop, a federally licensed firearms (FFL) dealer. Using their positions, the defendants participated in a scheme to have Commonwealth of Puerto Rico Concealed Carry Weapons Permits issued without compliance with applicable law. Both defendants plead guilty and the sentence is scheduled for July 15, 2015.
The Federal Bureau of Investigation (FBI) and the Puerto Rico Police Department (PRPD) are in charge of the investigation. The case is being prosecuted by Assistant U.S. Attorneys José Capó-Iriarte and Luke Cass.
DaVita to Pay $450 Million to Resolve Allegations that it Sought Reimbursement for unnecessary Drug WasteRead the Press Release
ATLANTA – DaVita Healthcare Partners, Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act by knowingly creating unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billing the federal government for such avoidable waste. Davita is headquartered in Denver, Colorado, and has dialysis clinics in 46 states and the District of Columbia.
“Through personal sacrifice and courage, two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” said Acting U.S. Attorney John Horn. “This settlement returns hundreds of millions of dollars to the treasury that had been improperly obtained by DaVita through these wasteful practices.”
“This settlement is an example of what can be accomplished as a result of the successful cooperation between the government and whistleblowers in protecting our vital federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
This civil settlement resolves allegations brought in a whistleblower action that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar. These drugs are packaged in single-use vials, which are intended for one-time use. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.
At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient. The whistleblowers’ complaint alleged that, to create unnecessary Zemplar waste, DaVita required its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids.” Zemplar, a Vitamin D supplement usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg. Davita allegedly created unnecessary waste by requiring its employees to provide Zemplar to dialysis patients pursuant to mandatory “dosing grids,” which were designed to maximize the amount of Zemplar administered to patients. DaVita then allegedly billed the government not only for the amount of Zemplar administered to patients, but also for the amount “wasted.”
With regard to Venofer, an iron supplement packaged only in a single-use vial size of 100 mg during the relevant time period, DaVita allegedly enacted protocols that required nurses to administer this drug in small amounts, and at frequent intervals, to maximize wastage. For instance, in certain instances, DaVita’s protocol called for a patient to receive 25 mg of Venofer per week, which resulted in 300 mg of waste per month that was billed to the Government. In contrast, if the order had been filled by giving the patient the entirety of a single 100 mg vial, once per month, no waste would have resulted.
In 2011, the Centers for Medicare and Medicaid Services changed the manner by which it reimbursed dialysis providers for such drugs. As a consequence, wastage derived from single-use vials was no longer profitable, and, as a result, DaVita allegedly changed its practices and reduced its drug wastage dramatically.
The allegations resolved today arose from a lawsuit filed and ultimately litigated to this successful resolution by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The United States may intervene in the action or, as in this case, the whistleblower may pursue the matter. To bring this case to its successful resolution, whistleblowers Dr. Vainer and Mr. Barbir, along with their attorneys, engaged in extensive and exceptional litigation efforts.
The lawsuit is captioned United States ex rel. Alon J. Vainer, M.D., F.A.C.P. and Daniel D. Barbir, R.N., Plaintiffs v. DaVita, Inc. and Gambro Healthcare, Inc., and their respective subsidiaries and affiliated companies, Defendants, No. 1:07-cv-2509-CAP (N.D. Ga.). The claims settled by this agreement are allegations only; there has been no determination of liability.
Assistant United States Attorney Paris A. Wynn handled this matter for the U.S. Attorney’s Office.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
DaVita to Pay $450 Million to Resolve Allegations That it Sought Reimbursement for Unnecessary Drug WastageRead the Press Release
DaVita Healthcare Partners, Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act by knowingly creating unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billing the federal government for such avoidable waste. Davita is headquartered in Denver, Colorado, and has dialysis clinics in 46 states and the District of Columbia.
“This settlement is an example of what can be accomplished as a result of the successful cooperation between the government and whistleblowers in protecting our vital federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
This civil settlement resolves allegations brought in a whistleblower action that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar. These drugs are packaged in single-use vials, which are intended for one-time use. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.
At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient.
The whistleblowers’ complaint alleged that, to create unnecessary Zemplar waste, DaVita required its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids.” Zemplar, a Vitamin D supplement usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg. Davita allegedly created unnecessary waste by requiring its employees to provide Zemplar to dialysis patients pursuant to mandatory “dosing grids,” which were designed to maximize the amount of Zemplar administered to patients. DaVita then allegedly billed the government not only for the amount of Zemplar administered to patients, but also for the amount “wasted.”
With regard to Venofer, an iron supplement packaged only in a single-use vial size of 100 mg during the relevant time period, DaVita allegedly enacted protocols that required nurses to administer this drug in small amounts, and at frequent intervals, to maximize wastage. For instance, in certain instances, DaVita’s protocol called for a patient to receive 25 mg of Venofer per week, which resulted in 300 mg of waste per month that was billed to the Government. In contrast, if the order had been filled by giving the patient the entirety of a single 100 mg vial, once per month, no waste would have resulted.
In 2011, the Centers for Medicare and Medicaid Services changed the manner by which it reimbursed dialysis providers for such drugs. As a consequence, wastage derived from single-use vials was no longer profitable, and, as a result, DaVita allegedly changed its practices and reduced its drug wastage dramatically.
“Through personal sacrifice and courage, two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia. “This settlement returns hundreds of millions of dollars to the treasury that had been improperly obtained by DaVita through these wasteful practices.”
The allegations resolved today arose from a lawsuit filed and ultimately litigated to this succesful resolution by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The United States may intervene in the action or, as in this case, the whistleblower may pursue the matter.
This case was monitored by the U.S. Attorney’s Office of the Northern District of Georgia and the Civil Division’s Commercial Litigation Branch.
The lawsuit is captioned United States ex rel. Alon J. Vainer, M.D., F.A.C.P. and Daniel D. Barbir, R.N., Plaintiffs v. DaVita, Inc. and Gambro Healthcare, Inc., and their respective subsidiaries and affiliated companies, Defendants, No. 1:07-cv-2509-CAP (N.D. Ga.). The claims settled by this agreement are allegations only; there has been no determination of liability.
Couple from India Arrested in Alien Employment CaseRead the Press Release
McPHERSON, KAN. - A married couple from India who themselves are unlawfully in the United States have been arrested on an indictment charging unlawful employment of aliens, document fraud, bank fraud and making false claims of U.S. citizenship, U. S. Attorney Barry Grissom said Weednesday.
Arrested were Satishkumar “Sam” Patel, 47, and his wife, Daxaben S. Patel, 36, both of McPherson, Kan., who are in federal custody and scheduled to appear at 1:30 p.m. today in U.S. District Court in Wichita. The indictment also charges four other aliens from India who allegedly were employed by the Patels, as well as Nitin B. Patel, 53, a Lawrence, Kan., business partner of Satishkumar Patel’s, and two companies owned by the defendants.
The investigation was led by the Kansas Department of Revenue’s Office of Special Investigations and Alcoholic Beverage Control Division, and Homeland Security Investigations, with the assistance the Social Security Administration Office of Inspector General, the McPherson Police Department, the Kansas Department of Labor and the U.S. Attorney’s office.
The indictment unsealed Wednesday contains 45 counts arising primarily from the Patels’ operation of a gas station and convenience store at 115 W. Kansas in McPherson called Route 56 Express. The indictment also seeks criminal forfeiture of money and property related to the alleged crimes, including the business, real estate, cash, and money held in bank accounts controlled by the Patels. Many of those assets were seized today, Grissom said.
According to the indictment, Satishkumar and Daxaben Patel unlawfully entered the United States in the 1990s and have never had any lawful status here, but were able to obtain Social Security numbers by claiming to be aliens authorized to work. Since then, the indictment alleges, the Patels have pretended to be U.S. citizens, buying a home in McPherson and engaging in business activities that didn’t result in checks of their citizenship or immigration status.
They obtained Kansas driver’s licenses using their Social Security numbers and swearing they were lawfully in the U.S., according to the indictment, resulting in charges of document fraud and use of a fraudulently obtained Social Security number, all felonies. Sastishkumar and Daxaben Patel also are charged with multiple counts of harboring aliens unlawfully in the United States, both by employing them and by providing housing at the Patel’s McPherson home.
The indictment alleges the Patels were able to obtain a mortgage loan to buy the home by falsely claiming on the mortgage loan application that they were United States citizens. Satishkumar Patel also is charged with wire fraud for allegedly filing false quarterly unemployment insurance reports with the Kansas Department of Labor that listed only one employee, Daxaben Patel, for the McPherson gas station when, in fact, at least four other employees worked there.
The charges against Satishkumar Patel and Nitin B. Patel arise out of their ownership of a liquor store in Lawrence in which Satishkumar’s unlawful status in the U.S. and his ownership of the store allegedly were not properly disclosed to the state Alcoholic Beverage Control Division. Foreign nationals are not permitted to obtain a retail liquor license in Kansas, and the identities of all owners of liquor stores are required to be disclosed.
The defendants face a maximum of five years in prison on the alien harboring and Social Security fraud charges, as well as the wire and mail fraud charges. They face a maximum of three years in prison on the false claim of citizenship charges, 10 years in federal prison for document fraud, and 20 years in prison for bank fraud. As in any criminal case, a person charged with a crime is considered innocent until and unless proven guilty. An indictment merely contains allegations of criminal conduct.
The case is being prosecuted by Assistant U.S. Attorney Brent Anderson.
Conspirator in Jamal Dean Attempted Escape Attempt Sentenced to Federal Prison on Methamphetamine ChargeRead the Press Release
A Nebraska woman was sentenced June 26, 2015, to 4 months in federal prison.
Anna Baker, age, 25 from Winnebago, Nebraska, received the prison term after a February 25, 2015 guilty plea to one count of simple possession of methamphetamine.
Facts presented by the United States at her change of plea hearing and sentencing reveal for about three days, starting on April 30, 2013, defendant hid Jamal Dean at her residence on the Winnebago Indian Reservation. She did so knowing Dean was the subject of a joint state and federal criminal investigation and manhunt. During this time, defendant relayed information to Dean from other conspirators, provided him methamphetamine, and provided him the use of her phone.
On or about May 14, 2013, defendant lied to federal agents about when she had last seen Dean and who had stayed at her residence. Additionally, sometime after harboring Dean and before meeting with law enforcement, she deleted the contents of her phone (including text messages).
On February 12, 2015, defendant entered into a plea agreement with the United States admitting her role in the conspiracy. On February 25, 2015, she pled guilty to a related offense but was allowed to remain at liberty. After admitting guilt and pleading guilty, defendant continued her criminal conduct and repeatedly violated the terms of her supervision.
Baker was sentenced in Sioux City by United States Magistrate Judge Leonard Strand. Baker was sentenced to four months’ imprisonment. A special assessment of $25 was imposed. She must also serve a one-year term of supervised release after the prison term. There is no parole in the federal system.
Baker is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted as a part of Project Safe Neighborhoods, a cooperative local, state, and federal program aimed at the enhanced prosecution of gun crimes. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Homeland Security Investigations; the Tri-State Drug Task Force, the Woodbury County Sheriff’s Office; the Sioux City Police Department, the United States Marshal’s Service; the Iowa Department of Public Safety; the Nebraska Department of Public Safety; and the Woodbury County Attorney’s Office. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-4088.
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