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10 July 2015
Former Property Manager Pleads Guilty to Stealing over $380,000 from Employer and ClientsRead the Press Release
WASHINGTON – Lorraine Cyr, 58, pled guilty today to charges stemming from the embezzlement of over $380,000 from her employer and properties that she managed, announced Acting U.S. Attorney Vincent H. Cohen, Jr., Thomas Jankowski, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI), and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Cyr, of Palm Bay, Fla., pled guilty in the U.S. District Court for the District of Columbia to one count of wire fraud and one count of income tax evasion. The Honorable Senior Judge Royce C. Lamberth scheduled sentencing for Oct. 19, 2015. The wire fraud charge carries a statutory maximum of 20 years in prison and the charge of income tax evasion carries up to five years; both also carry potential financial penalties. Under federal sentencing guidelines, Cyr faces a likely range of 41 to 51 months of incarceration and a fine between $7,500 and $75,000. The plea agreement calls for Cyr to pay over $380,000 in restitution to a property management company and various other victims of her scheme, as well as $96,112 to the IRS. She also is subject to a forfeiture money judgment in the amount of $342,917.
According to a statement of offense submitted at the plea hearing, Cyr worked from 2001 until 2009 for a property management company, referred to in court documents as “Property Management Company A,” in Washington, D.C. She was vice president of operations during her last four years of employment, handling duties such as management of payroll, bank accounts, budgeting, invoicing, and tax preparation for the company and its clients. The clients consisted largely of cooperative and condominium apartment buildings in the District of Columbia.
In 2009, Cyr started her own property management company, Lorraine Cyr Management Group, Inc., also in Washington, D.C., in which she performed similar duties for various clients, including some who transitioned to her new firm. In her new role, she had virtually unfettered discretion to manage the business affairs of her clients, who granted her access to bank accounts to manage their operations and expenses.
Between July and November of 2009, prior to resigning from “Property Management Company A,” Cyr embezzled $37,620, which she used for personal purposes, including spending at casinos and various retailers. Then, between March 2010 and April 2011, while at her own firm, she stole $342,917 in funds from eight clients. She used the money for expenses such as spending at casinos, hotels, amusement parks, clothing stores, restaurants, and other retailers.
The tax charge stems from Cyr’s evasion of income taxes on the money that she was stealing during the course of her scheme.
In announcing the plea, Acting U.S. Attorney Cohen, Special Agent in Charge Jankowski and Chief Lanier commended the work of those who investigated the case from IRS-CI and MPD. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Thomas Swanton and Anthony Saler, who handled forfeiture issues; former Assistant U.S. Attorney Mary Chris Dobbie; Paralegal Specialists Heather Sales and Tasha Harris, Legal Assistant Angela Lawrence, and former Paralegal Specialist Nicole Wattelet. Finally, they expressed appreciation for the work of Trial Attorney Jeffrey McLellan, of the Department of Justice’s Tax Division, who assisted on the tax matter, and Assistant U.S. Attorney David A. Last, who investigated and prosecuted the case.
Former Patriots Player and Former Bank Executive Indicted on Fraud ChargesRead the Press Release
BOSTON – A former New England Patriots player and a former bank executive were indicted yesterday in connection with an investment scheme involving fraudulent loans to professional athletes.
Will Allen, 36, of Davie, Fla., and Susan Daub, 55, of Coral Springs, Fla., were indicted on twelve counts of wire fraud, one count of conspiracy to commit wire fraud, six counts of identity theft and several counts of money laundering (four counts for Allen and one count for Daub). Both were arrested and charged in a criminal complaint in June 2015. Allen played in the National Football League from 2001 to 2012. In 2012, he signed a one-year contract with the New England Patriots.
The indictment alleges that Allen and Daub ran their company, Capital Financial Partners (CFP) as a Ponzi scheme, using money raised from new investors to pay back investments made by earlier investors. Allen and Daub allegedly defrauded investors out of millions of dollars by claiming that the funds would be used to back high-interest, short-term loans to professional athletes through CFP, Allen and Daub’s Massachusetts-based company. While CFP did make some loans to athletes, the indictment alleges that Allen and Daub also diverted millions of investor dollars to themselves and other business ventures.
Allen and Daub allegedly told some investors that the loans CFP made to professional athletes were larger than they actually were, allowing Allen and Daub to collect more money from investors than they were lending out to athletes. In other instances, Allen and Daub are accused of collecting money from investors to fund fictitious loans. To keep investors from discovering their fraud, Allen and Daub allegedly used newly invested money to make payments to existing investors, which they falsely characterized as interest and principal payments from athlete borrowers.
The charges of wire fraud and conspiracy to commit wire fraud provides for sentences of no greater than 20 years in prison and up to three years of supervised release. The charge of identity theft provides for a sentence of two years in prison and up to one year of supervised release. The charge of money laundering provides for a sentence of no greater than 10 years in prison and up to three years of supervised release. Allen and Daub also may be fined of up to $250,000 or twice the gross gain or loss caused by offense, whichever is greater, on each of the counts. Actual sentences for federal crimes are typically less than maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. This case is being prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit. The U.S. Attorney’s Office received valuable assistance from the Securities and Exchange Commission, which previously charged Allen and Daub in a civil complaint.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Five defendants sentenced for roles in Lafayette district attorney’s office bribery caseRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that five defendants were sentenced for their roles in a pay-for-plea scheme that garnered favorable treatment for defendants charged with various state crimes.
Barna D. Haynes, 61; Greg Williams, 46; and Sandra Degeyter, 63, all of Lafayette were sentenced by U.S. District Judge Elizabeth E. Foote on one count of conspiracy to commit bribery. Denease Curry, 49, of Broussard, and Elaine Crump, 61 of Lafayette, were also sentenced by Foote on one count of misprision of a felony for failure to report bribes offered and received by employees of the 15th Judicial District Attorney’s Office. Hanyes, Williams and Curry were former employees District Attorney’s Office. Degeyter and Crump were former employees of Acadiana Outreach. For sentencing details see the graphic below:
Defendants Prison Term Supervised Release Probation Fine Community Service Home Confinement Table containing sentencing information for Barna Hanyes and other defendants Haynes 18 months 1 year $5,000 Williams 2 years 6 months Degeyter 2 years 6 months Curry 2 years 200 hours Crump 2 years 200 hoursAccording to the guilty pleas, the defendants conspired with Lafayette private investigator Robert Williamson, 64, who is not licensed to practice law, to move cases through the legal system. From March 2008 to February 2012, Williamson solicited thousands of dollars from individuals with pending criminal charges in the 15th Judicial District and promised them favorable resolutions to pending felony and misdemeanor cases, the majority of which were OWI cases. The favorable resolutions were obtained by improperly manipulating the procedures set forth in Louisiana Criminal Code of Louisiana Procedure Article 894.
Article 894 provides a process by which a person can initially plead guilty to a crime with the understanding that the conviction will be set aside if the person successfully completes certain requirements imposed during a probationary period. The District Attorney’s Office had previously established a process by which select defendants could receive what was referred to as “immediate 894 pleas” on OWI cases. In order to qualify for the immediate 894 plea, the charged individuals were required to provide certifications at the time of the plea stating that they had completed all legal prerequisites, including community service, a substance abuse program and a driver safety program. If the District Attorney authorized the immediate 894 plea, the case was not placed on any docket, and the defendant was allowed to plead at a time and place different than the normal OWI docket. Following the entry of the immediate 894 plea, the judge would grant the 894 motion, dismissing the conviction, which served as an acquittal, thereby enabling those OWI defendants to immediately reinstate their driving privileges with no record.
Defendant Williamson charged individuals as much as $5,000 to participate in the Article 894 process. He also paid bribes in cash and other things of value to employees of the 15th Judicial District Attorney=s Office, who included Haynes, who at the time worked as the administrative assistant to the district attorney; Williams, who was an assistant district attorney; and Curry, who was Williams’ secretary and assisted Haynes with the Williamson cases. Williamson also paid bribes in cash and other things of value to employees of other organizations associated with the OWI program, including Acadiana Outreach, where Crump and Degeyter were formerly employed. Williamson obtained false and fraudulent certifications from Acadiana Outreach, which certified that his clients completed court-ordered community service when in fact the individuals had not.
Beginning in 2008, Haynes began transferring Williamson’s “clients” from city court to district court. Specifically, if one of Williamson’s clients was scheduled to appear in city court, Haynes transferred the case to district court and scheduled the case to be resolved during one of the “immediate 894 sessions.” Haynes also prepared the expungement paperwork associated with Williamson’s clients and was paid $500 for each case. During the course of the conspiracy, Haynes received at least $55,000 from Williamson.
Williams, Assistant District Attorney for the 15th Judicial District, handled immediate 894 pleas and received bribes for his role in the scheme. Beginning in 2010, he was aware of Haynes and Williamson’s arrangement to place cases into district court to be heard as part of the 894 sessions and that Williamson was not an attorney. Williamson gave Williams payments to include $500 cash, an autographed New Orleans Saints hat, bicycles for Williams and his family members, and clothing for Williams.
Sometime beginning in 2010, Curry became aware that Haynes and Williamson were using the immediate 894 pleas for favorable disposition of certain cases, mostly OWIs. Curry began helping to coordinate the immediate 894 sessions and would contact the judge’s chambers to set up the sessions. Curry also prepared Williams’ files for the sessions. After Haynes took an extended medical leave in 2010, Williamson paid Curry $200 for each case for a total of $1,600.
Beginning in 2008, Degeyter, agreed to provide false and fraudulent Acadiana Outreach community service certificates to Williamson in exchange for money. The fraudulent certificates falsely confirmed that Williamson’s clients completed court-ordered community service. Williamson paid Degeyter $100 per certificate. Degeyter admitted producing more than 50 false certificates between the spring of 2008 and October 2009. She received between $5,000 and $10,000 in bribes.
Crump, who was also employed as a case manager at Acadiana Outreach, was asked by Degeyter to assist with continuing the scheme. The two agreed that Degeyter would continue to create fraudulent Acadiana Outreach community service certificates, and in exchange for cash payments, Crump would permit Degeyter to sign Crump’s name on the fraudulent certificates. Degeyter began providing cash payments to Crump, from $25 to $100, which was a portion of what Degeyter received from Williamson. Shortly after Crump was laid off from Acadiana Outreach in September 2011, Degeyter and Crump agreed that Degeyter would continue creating additional certificates and sign Crump’s name on them backdating the documents to dates within Crump’s employment at Acadiana Outreach. She received between $1,000 and $2,000 in bribes.
“These public servants and employees decided that money mattered more than justice, safety and their duty to serve the public,” said Finley. “I hope these convictions send a message that the facilitation of schemes like this are not worth it. I want to thank all of the prosecutors, agents and law enforcement who worked diligently on this case. Their hard work is to be commended for assisting in putting an end to this OWI scheme.”
Williamson pleaded guilty June 8, 2015, and faces a maximum penalty of five years in prison for one count of conspiracy to commit bribery, 10 years in prison for one count of bribery, and five years in prison for one count of Social Security fraud. He also faces a $250,000 fine or both with up to three years of supervised release for each count. Sentencing date is September 25, 2015.
The FBI and the Social Security Administration – Office of Inspector General conducted the investigation. Assistant U.S. Attorneys John Luke Walker and Robert C. Abendroth are prosecuting the case.
Fargo Man Sentenced for Possession and Distribution of Child PornographyRead the Press Release
FARGO – Acting U.S. Attorney Christopher C. Myers announced that on July 9, 2015, Devon Cole Reed, 27, Fargo, North Dakota, was sentenced before U. S. District Judge Ralph R. Erickson to serve 16 years in prison followed by a lifetime of supervised release on two counts of Receiving and Distributing Child Pornography, and three counts of Possession of Child Pornography. Judge Erickson also sentenced Reed to pay $3000 in restitution.
This case came to the attention of law enforcement after the electronic service provider Google notified the National Center for Missing and Exploited Children (NCMEC) that a specific Gmail account contained child pornography. Law enforcement traced the account to Devin Reed, who was residing in Fargo, North Dakota. A search of Reed’s email accounts revealed that he was using them for the purpose of trading child pornography with other users located throughout the country. Law enforcement also recovered various media from Reed’s residence that also contained child pornography.
"HSI has taken a very aggressive stance against those who trade in child pornography in our communities," said acting Special Agent in Charge William Lowder of HSI in St. Paul. "Anyone who would violate the most innocent among us should know that law enforcement at all levels are standing shoulder to shoulder to hunt these predators down to protect those who cannot protect themselves."
The case was investigated by the Department of Homeland Security - Homeland Security Investigations, the North Dakota Bureau of Criminal Investigation, and the Fargo Police Department.
Assistant U. S. Attorney Jennifer Puhl and Assistant U. S. Attorney Keith Reisenauer prosecuted the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, Project Safe Childhood, in conjunction with the Internet Crimes Against Children (ICAC) Task Force help federal, state, and local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communications systems, and/or computer technology to sexually exploit children. The ICAC program is a national network of 61 coordinated task forces engaging in proactive investigations, forensic investigations, and criminal prosecutions. Project Safe Childhood also helps to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
East St. Louis Man Sentenced for Heroin OffenseRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced that Frederick D. Purnell, Sr. was sentenced on Tuesday, July 7, 2015, to 27 months in federal prison for Possession of Heroin (With Intent to Distribute).
Purnell, 38 of East St. Louis, IL, pled guilty to the federal charge on April 14, 2015. According to evidence introduced at Purnell’s change of plea hearing, Deputy U.S. Marshals arrested Purnell in Cahokia on April 4, 2013 and seized just over 5 grams of heroin (1/5 ounce) from a nightstand in his bedroom. Purnell told arresting officers that he had been selling heroin around Cahokia, and that he had intended to sell the heroin which police seized.
The investigation which resulted in Purnell’s arrest and conviction was conducted by the U.S. Marshals Service.
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
East St. Louis Man Sentenced for Failing to Register as A Sex OffenderRead the Press Release
Willie Watson, 38, of East St. Louis, IL, was sentenced this morning in the United States District Court for the Southern District of Illinois to 18 months in federal prison, followed by 5 years of supervised release, on one count of Failure to Register as a Sex Offender, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Evidence showed that Watson was convicted of Criminal Attempt to Commit Rape of a Child in Tennessee in 1999. Due to that conviction, Watson was required to register as a sex offender. Watson last registered as a sex offender on October 15, 2012, in the state of Tennessee, but then moved to East St. Louis, Illinois, and failed to register as a sex offender once in Illinois. On November 15, 2014, he arrested by the Fairview Heights Police Department.
The case was investigated by the U.S. Marshals Service and the Fairview Heights Police Department. The case was prosecuted by Assistant United States Attorney Laura Reppert.
District Man Found Guilty of Aggravated Assault for Striking Metropolitan Police Department Officer with His CarRead the Press Release
WASHINGTON – Kevin Burno, 26, of Washington, D.C., has been found guilty by a jury of aggravated assault while armed, assault on a police officer while armed, and assault with a dangerous weapon stemming from his use of a 1991 Lexus sedan to run over a Metropolitan Police Department patrol officer, Sean Hickman, in March 2013 in Southeast Washington, announced Acting U.S. Attorney Vincent H. Cohen, Jr. and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
The verdict was returned on July 9, 2015, following a trial in the Superior Court of the District of Columbia. The Honorable Patricia A. Broderick scheduled sentencing for Sept. 15, 2015. Burno faces up to 30 years of incarceration.
“This case is a reminder that police officers put themselves in harm’s way every day to serve our community,” said Acting U.S. Attorney Cohen. “This officer was seriously injured while on the job when a criminal intentionally ran him down with a car for no reason at all. A D.C. jury has now held Kevin Burno accountable for this brazen assault. We are pleased that justice has been served.”
“Officer Sean Hickman is not only a wonderful police officer, he is one of the nicest people I have ever had the pleasure of meeting,” said Chief Lanier. “Prior to becoming a police officer Sean worked as a second-grade teacher, which is a true testament of his dedication to public service and speaks further to the generous and kind person that he is. The assault that Officer Hickman suffered is truly tragic, an unfortunate reality that police officers face, and one that has left him permanently injured. I am pleased by the jury’s decision.”
According to the government’s evidence, on March 5, 2013, at about 6:30 p.m., Officer Hickman was patrolling in Southeast Washington on his 250cc Honda Rebel motor scooter. Officer Hickman was responding to a call in the area when he observed Burno’s vehicle pulling out of a parking spot and heading southbound without its lights on. The officer was travelling northbound and pulled his motor scooter over to the northbound parking lane, where he made a hand signal to Burno’s vehicle indicating that his headlights were not on. Burno pulled out of his parking spot and drove in Officer Hickman’s direction. Burno then abruptly turned his vehicle into the officer, causing him to be thrown off his motor scooter and onto the sidewalk – unable to move. Burno sped off without stopping or providing medical assistance to Officer Hickman.
Officer Hickman was treated for serious injuries to the left side of his body in general, and his lower left leg in particular. To date, he has limited movement in his left leg and can no longer work patrol duties.
In announcing the verdict, Acting U.S. Attorney Cohen and Chief Lanier commended the work of Officer Hickman and the Metropolitan Police Department’s Sixth District. They also acknowledged the efforts of those who worked on the prosecution from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Brandon Long and Richard DiZinno, who investigated and indicted the case; Litigation Technology Specialist Leif Hickling; Paralegal Specialists Stephanie Gilbert and Richard Cheatham; and Intern Willie Wilson. Finally, they expressed appreciation for the work of Assistant U.S. Attorneys Derrick Williams and Karen Seifert, of the Felony Major Crimes Trial Section, who prosecuted the matter.
District Court Enters Permanent Injunction against Nevada Animal Drug Manufacturer to Prevent Distribution of Adulterated DrugRead the Press Release
The U.S. District Court for the District of Nevada entered a consent decree of permanent injunction against Bio Health Solutions LLC, of Reno, Nevada, and Mark Garrison, its manager, to prevent the distribution of RenAvast, an animal drug that is adulterated, the Department of Justice announced today.
“The department will not hesitate to bring enforcement actions against animal drug producers who do not follow the necessary procedures to comply with our nation’s animal drug laws,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division.
On July 9, the department filed a complaint in U.S. District Court at the request of the U.S. Food and Drug Administration (FDA) alleging that Bio Health Solutions and Garrison caused the shipment of RenAvast in interstate commerce in violation of federal law. The complaint alleged that Bio Health Solutions markets, sells and distributes RenAvast, which the company describes as an animal supplement, and that the company intended that RenAvast be used to treat and prevent kidney disease and chronic renal failure in cats and dogs.
Under the federal Food, Drug and Cosmetic Act (FDCA), a new animal drug includes any drug intended for use for animals, the composition of which is such that it is not generally recognized as safe and effective for use under the conditions prescribed, recommended or suggested in its labeling. A new animal drug that lacks FDA approval or otherwise fails to meet an exception under the law is deemed to be unsafe, and a new animal drug that is unsafe under the law is deemed to be adulterated. The complaint alleged that defendants caused the shipment of RenAvast, an adulterated animal drug, into interstate commerce.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from introducing or delivering for introduction into interstate commerce, manufacturing, processing, packaging, labeling, holding, selling or distributing RenAvast. In addition, these same restrictions apply to any other product intended to diagnose, cure, mitigate, treat or prevent disease, unless and until a new animal drug application has been approved, or the product meets the requirements for an investigational new animal drug exemption in the law.
According to the complaint, the FDA issued a warning letter to Garrison on Aug. 1, 2012. The letter cited numerous statements throughout the defendants’ website and other promotional materials that showed the intended use of RenAvast was to prevent and/or treat kidney disease and chronic renal failure in cats. The FDA’s letter warned Garrison that RenAvast could not be legally marketed because it was a new animal drug that was not approved by the FDA.
The complaint further alleged that in November 2012, a representative for the company informed the FDA that the company had complied with FDA requests to remove statements on its website and in other promotional materials that showed its intent that RenAvast be used to mitigate, treat and prevent chronic renal failure in cats and in dogs. Nevertheless, the complaint alleged that after these assurances, Bio Health Solutions created a password-protected section on its website that contained numerous express disease claims. In addition, as alleged in the complaint, the FDA conducted undercover purchases of RenAvast, and such purchases confirmed that the defendants continued to make claims about RenAvast that caused it to be an adulterated drug under the FDCA.
The government is represented by Trial Attorney David A. Frank of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel Steven J. Tave of the Department of Health and Human Services’ Office of General Counsel-Food and Drug Division and Assistant U.S. Attorney Greg Addington of the District of Nevada.
District Court Enters Permanent Injunction Against Nevada Animal Drug Manufacturer to Prevent Distribution of Adulterated DrugRead the Press Release
WASHINGTON – The U.S. District Court for the District of Nevada entered a consent decree of permanent injunction against Bio Health Solutions LLC, of Reno, Nevada, and Mark Garrison, its manager, to prevent the distribution of RenAvast, an animal drug that is adulterated, the Department of Justice announced today.
“The department will not hesitate to bring enforcement actions against animal drug producers who do not follow the necessary procedures to comply with our nation’s animal drug laws,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division.
On July 9, the department filed a complaint in U.S. District Court at the request of the U.S. Food and Drug Administration (FDA) alleging that Bio Health Solutions and Garrison caused the shipment of RenAvast in interstate commerce in violation of federal law. The complaint alleged that Bio Health Solutions markets, sells and distributes RenAvast, which the company describes as an animal supplement, and that the company intended that RenAvast be used to treat and prevent kidney disease and chronic renal failure in cats and dogs.
Under the federal Food, Drug and Cosmetic Act (FDCA), a new animal drug includes any drug intended for use for animals, the composition of which is such that it is not generally recognized as safe and effective for use under the conditions prescribed, recommended or suggested in its labeling. A new animal drug that lacks FDA approval or otherwise fails to meet an exception under the law is deemed to be unsafe, and a new animal drug that is unsafe under the law is deemed to be adulterated. The complaint alleged that defendants caused the shipment of RenAvast, an adulterated animal drug, into interstate commerce.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from introducing or delivering for introduction into interstate commerce, manufacturing, processing, packaging, labeling, holding, selling or distributing RenAvast. In addition, these same restrictions apply to any other product intended to diagnose, cure, mitigate, treat or prevent disease, unless and until a new animal drug application has been approved, or the product meets the requirements for an investigational new animal drug exemption in the law.
According to the complaint, the FDA issued a warning letter to Garrison on Aug. 1, 2012. The letter cited numerous statements throughout the defendants’ website and other promotional materials that showed the intended use of RenAvast was to prevent and/or treat kidney disease and chronic renal failure in cats. The FDA’s letter warned Garrison that RenAvast could not be legally marketed because it was a new animal drug that was not approved by the FDA.
The complaint further alleged that in November 2012, a representative for the company informed the FDA that the company had complied with FDA requests to remove statements on its website and in other promotional materials that showed its intent that RenAvast be used to mitigate, treat and prevent chronic renal failure in cats and in dogs. Nevertheless, the complaint alleged that after these assurances, Bio Health Solutions created a password-protected section on its website that contained numerous express disease claims. In addition, as alleged in the complaint, the FDA conducted undercover purchases of RenAvast, and such purchases confirmed that the defendants continued to make claims about RenAvast that caused it to be an adulterated drug under the FDCA.
The government is represented by Trial Attorney David A. Frank of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel Steven J. Tave of the Department of Health and Human Services’ Office of General Counsel-Food and Drug Division and Assistant U.S. Attorney Greg Addington of the District of Nevada.
Detroit Area Doctor Sentenced to 45 Years in Prison for Providing Medically Unnecessary Chemotherapy to PatientsRead the Press Release
A Detroit area hematologist-oncologist was sentenced today to serve 45 years in prison for his role in a health care fraud scheme that included administering medically unnecessary infusions or injections to 553 individual patients and submitting to Medicare and private insurance companies approximately $34 million in fraudulent claims.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.
Farid Fata, M.D., 50, of Oakland Township, Michigan, pleaded guilty in September 2014 to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering. U.S. District Judge Paul D. Borman of the Eastern District of Michigan imposed the sentence and ordered Fata to forfeit $17.6 million.
“Rather than use his medical degree to save lives, Dr. Fata instead destroyed them in pursuit of profit,” said Assistant Attorney General Caldwell. “Time and again, Dr. Fata callously violated his patients' trust as he used false cancer diagnoses and unwarranted and dangerous treatments as tools to steal millions of dollars from Medicare, even stooping to profit from the last days of some patients' lives. While no sentence can restore what was taken from his patients and their families, the sentence imposed ensures that never again will Dr. Fata lay hands on another patient.”
“Health care fraud has been a serious problem in Michigan, but no case has been as egregious as the conduct of Dr. Farid Fata,” said U.S. Attorney McQuade. “Dr. Fata did not care for patients; he exploited them as commodities. He over-treated, under-treated and outright lied to patients about whether they had cancer so that he could maximize his own profits.”
“Fata’s heinous acts did far worse than defraud government health care programs and breach his professional oath,” said Special Agent in Charge Abbate. “Fata caused grievous emotional and physical harm, betraying the trust of hundreds of innocent patients by selfishly placing his personal financial gain over the health and welfare of those who entrusted him with their medical care. The many brave individuals impacted by this defendant’s criminal acts had the strength to come forward, express their experiences of pain and suffering, and collaborate with law enforcement and prosecutors to ensure that Fata’s despicable actions were brought to an end and justice delivered.”
“It is startling and abhorrent when greed is so potent that it drives a medical professional to recklessly abandon the most basic and important principle of his profession, ‘First, Do No Harm,” said Special Agent in Charge Pugh. “Dr. Fata did just that when he falsely diagnosed his patients with cancer and administered toxic chemotherapy with potentially harmful and even deadly side effects. Today’s sentencing is a clear message that, working closely with our law enforcement partners, we will continue to investigate, charge and prosecute medical professionals who jeopardize the health of patients.”
“This is the most egregious case of fraud and deception that I have seen in my career," said Chief Weber. “Dr. Fata not only defrauded the government out of millions of dollars, but he lied to his patients about their health and intentionally put their lives at risk. In fact, because of his lies, some of those patients who he was entrusted to care for likely died as a result of his actions. This defendant greedily cared more about his own financial well-being than the lives of his patients. This disgusting and diabolical scheme has hurt hundreds of patients and their families and stolen from them something that no punishment from the court can do to make them whole.”
As set forth at sentencing, Fata was a licensed medical doctor who owned and operated a cancer treatment clinic, Michigan Hematology Oncology P.C. (MHO), which had locations in Rochester Hills, Michigan; Clarkston, Michigan; Bloomfield Hills, Michigan; Lapeer, Michigan; Sterling Heights, Michigan; Troy, Michigan; and Oak Park, Michigan. He also owned a diagnostic testing facility, United Diagnostics PLLC, located in Rochester Hills, Michigan.
In connection with his guilty plea, Fata admitted to prescribing and administering unnecessary aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to patients in order to increase his billings to Medicare and other insurance companies. Fata then submitted fraudulent claims to Medicare and other insurers for these unnecessary treatments.
Fata also admitted to soliciting kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care in exchange for his referral of patients to those facilities.
Fata further admitted to using the proceeds of the health care fraud at his medical practice, MHO, to promote the carrying on of additional health care fraud at United Diagnostics, where he administered unnecessary and expensive positron emission tomography (PET) scans for which he billed a private insurer.
This case was investigated by the FBI, HHS-OIG and IRS-CI 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 Eastern District of Michigan. This case is being prosecuted by Assistant Chief Catherine K. Dick, Deputy Chief Gejaa T. Gobena, and Trial Attorney Matthew C. Thuesen of the Fraud Section, and by Assistant U.S. Attorney Sarah Resnick Cohen, White Collar Crime Unit Chief John K. Neal, and Health Care Fraud Unit Chief Wayne F. Pratt of the U.S. Attorney’s Office of the Eastern District of Michigan.
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.
Detroit Area Doctor Sentenced to 45 Years in Prison for Providing Medically Unnecessary Chemotherapy to PatientsRead the Press Release
A Detroit area hematologist-oncologist was sentenced today to serve 45 years in prison for his role in a health care fraud scheme that included administering medically unnecessary infusions or injections to 553 individual patients and submitting to Medicare and private insurance companies approximately $34 million in fraudulent claims.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement.
Farid Fata, M.D., 50, of Oakland Township, Michigan, pleaded guilty in September 2014 to 13 counts of health care fraud, one count of conspiracy to pay or receive kickbacks and two counts of money laundering. U.S. District Judge Paul D. Borman of the Eastern District of Michigan imposed the sentence, and ordered Fata to forfeit $17.6 million.
“Rather than use his medical degree to save lives, Dr. Fata instead destroyed them in pursuit of profit,” said Assistant Attorney General Caldwell. “Time and again, Dr. Fata callously violated his patients' trust as he used false cancer diagnoses and unwarranted and dangerous treatments as tools to steal millions of dollars from Medicare, even stooping to profit from the last days of some patients' lives. While no sentence can restore what was taken from his patients and their families, the sentence imposed ensures that never again will Dr. Fata lay hands on another patient.”
“Health care fraud has been a serious problem in Michigan, but no case has been as egregious as the conduct of Dr. Farid Fata,” said U.S. Attorney McQuade. “Dr. Fata did not care for patients; he exploited them as commodities. He over-treated, under-treated and outright lied to patients about whether they had cancer so that he could maximize his own profits.”
“Fata’s heinous acts did far worse than defraud government health care programs and breach his professional oath,” said Special Agent in Charge Abbate. “Fata caused grievous emotional and physical harm, betraying the trust of hundreds of innocent patients by selfishly placing his personal financial gain over the health and welfare of those who entrusted him with their medical care. The many brave individuals impacted by this defendant’s criminal acts had the strength to come forward, express their experiences of pain and suffering, and collaborate with law enforcement and prosecutors to ensure that Fata’s despicable actions were brought to an end and justice delivered.”
“It is startling and abhorrent when greed is so potent that it drives a medical professional to recklessly abandon the most basic and important principle of his profession, ‘First, Do No Harm,” said Special Agent in Charge Pugh. “Dr. Fata did just that when he falsely diagnosed his patients with cancer and administered toxic chemotherapy with potentially harmful and even deadly side effects. Today’s sentencing is a clear message that, working closely with our law enforcement partners, we will continue to investigate, charge and prosecute medical professionals who jeopardize the health of patients.”
“This is the most egregious case of fraud and deception that I have seen in my career," said Chief Weber. “Dr. Fata not only defrauded the government out of millions of dollars, but he lied to his patients about their health and intentionally put their lives at risk. In fact, because of his lies, some of those patients who he was entrusted to care for likely died as a result of his actions. This defendant greedily cared more about his own financial well-being than the lives of his patients. This disgusting and diabolical scheme has hurt hundreds of patients and their families and stolen from them something that no punishment from the court can do to make them whole.”
As set forth at sentencing, Fata was a licensed medical doctor who owned and operated a cancer treatment clinic, Michigan Hematology Oncology P.C. (MHO), which had locations in Rochester Hills, Michigan; Clarkston, Michigan; Bloomfield Hills, Michigan; Lapeer, Michigan; Sterling Heights, Michigan; Troy, Michigan; and Oak Park, Michigan. He also owned a diagnostic testing facility, United Diagnostics PLLC, located in Rochester Hills, Michigan.
In connection with his guilty plea, Fata admitted to prescribing and administering unnecessary aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to patients in order to increase his billings to Medicare and other insurance companies. Fata then submitted fraudulent claims to Medicare and other insurers for these unnecessary treatments.
Fata also admitted to soliciting kickbacks from Guardian Angel Hospice and Guardian Angel Home Health Care in exchange for his referral of patients to those facilities.
Fata further admitted to using the proceeds of the health care fraud at his medical practice, MHO, to promote the carrying on of additional health care fraud at United Diagnostics, where he administered unnecessary and expensive positron emission tomography (PET) scans for which he billed a private insurer.
This case was investigated by the FBI, HHS-OIG and IRS-CI 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 Eastern District of Michigan. This case is being prosecuted by Assistant Chief Catherine K. Dick, Deputy Chief Gejaa T. Gobena, and Trial Attorney Matthew C. Thuesen of the Fraud Section, and by Assistant U.S. Attorney Sarah Resnick Cohen, White Collar Crime Unit Chief John K. Neal, and Health Care Fraud Unit Chief Wayne F. Pratt of the U.S. Attorney’s Office of the Eastern District of Michigan. 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.
Captain of Genovese Crime Family Sentenced in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DANIEL PAGANO, a Captain of the Genovese Organized Crime Family of La Cosa Nostra (the “Genovese Crime Family”) was sentenced to a term of 27 months in prison for his leadership role in the Genovese Crime Family. PAGANO pled guilty to participating in a racketeering conspiracy in March 2015 and was sentenced today before by U.S. District Judge Ronnie Abrams.
Manhattan U.S. Attorney Preet Bharara said: “Danny Pagano, a Captain in the Genovese Crime Family, has been sentenced today for his leadership role in a racketeering conspiracy. Pagano’s conviction and sentence reinforce a simple truth: if you join the mob and choose a life of crime, you end up behind bars.”
According to the Indictment and other documents filed in this case, and statements made during the plea and sentencing proceedings:
The Genovese Crime Family is part of a nationwide criminal organization known by various names, including the “Mafia” and “La Cosa Nostra” (“LCN”), which operates through entities known as “Families.” The Genovese Crime Family operates through groups of individuals known as “crews” and “regimes,” most of which are based in New York City. Each “crew” has as its leader a person known as a “Caporegime,” “Capo,” “Captain,” or “Skipper,” who is responsible for supervising the criminal activities of his crew and providing “Soldiers” and associates with support and protection. In return, the Capo typically receives a share of the illegal earnings of each of his crew’s Soldiers and associates, which is sometimes referred to as Atribute.@ DANIEL PAGANO is a Caporegime or Captain in the Genovese Crime Family.
Each crew consists of “made” members, sometimes known as “Soldiers,” “wiseguys,” “friends of ours,” and “good fellows.” Soldiers are aided in their criminal endeavors by other trusted individuals, known as “associates,” who sometimes are referred to as “connected” or identified as “with” a Soldier or other member of the Family. Associates participate in the various activities of the crew and its members. In order for an associate to become a made member of the Family, the associate must first be of Italian descent and typically needed to demonstrate the ability to generate income for the Family and/or the willingness to commit acts of violence.
From 2009 through August 2014, PAGANO, along with other members and associates of the Genovese Crime Family, committed a wide array of crimes including operating an illegal gambling business. PAGANO, a Captain, exercised a leadership role within the Family by, among other things, settling disputes between and among associates of the Family.
As the Court noted, PAGANO had previously been convicted of racketeering conspiracy and served a term of over eight years in prison. As a repeat offender, a sentence of incarceration was warranted to deter him from future crimes.
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In addition to the prison term, Judge Abrams sentenced PAGANO, 61, of Rockland County, to a term of three years of supervised release, and ordered him to pay a fine of $5,000 and forfeiture of $2,000.
Mr. Bharara thanked the Federal Bureau of Investigation, the Rockland County District Attorney’s Office, the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the New York City Police Department, and the New York State Police.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jennifer Burns, Rahul Mukhi, and Abigail Kurland are in charge of the prosecution.
Buffalo Man Sentenced for Structuring Financial TransactionsRead 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 Abdo Nagi Fadel, 66, of Buffalo, NY, who was convicted of structuring currency transactions to evade reporting requirements, was sentenced to eight months in prison by U.S. District Court Judge Richard J. Arcara.Assistant U.S. Attorney Scott S. Allen, Jr., who handled the case, stated that in 2009, the defendant, an employee of a family owned retail business with check cashing operations, was suspected of structuring currency transactions in order to evade reporting requirements mandated by the United States Secretary of the Treasury. In November and December 2009, law enforcement officials from United States Customs and Immigration Enforcement organized and executed an undercover operation in which Fadel agreed to cash a $28,000 check and structure cash payments back to an undercover agent who claimed that he was attempting to avoid paying child support. In exchange, the defendant received a $2,100 commission.
The sentencing is the culmination of an investigation on the part of Special Agents with Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge J. Michael Kennedy.
Buffalo Man Indicted for Drug-Related MurderRead 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 a federal grand jury has returned a three count indictment charging Taire Chaney, 23, of Buffalo, NY, with narcotics conspiracy, discharge of firearm in furtherance of drug trafficking, and discharge of firearm causing death in furtherance of drug trafficking. The charges carry a minimum penalty of 10 years in prison, a maximum of life, and a $1,500,000 fine.Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that according to the indictment, Chaney participated in a drug trafficking conspiracy involving cocaine and crack cocaine. On February 29, 2012, in furtherance of that conspiracy, the defendant participated in the shooting murder of Brad Daniels.
“This represents the third cold case murder charged this week,” said U.S. Attorney Hochul.
The indictment is the result of an investigation into drug trafficking at the Perry Housing Projects in Buffalo. Chaney is the 13th defendant to be charged in the case. A total of six defendants have been convicted.The defendant will be arraigned before U.S. Magistrate Judge Hugh B. Scott on July 28, 2015, at 10:00 a.m.
Today’s indictment is the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda. The Safe Streets Task Force partner agencies include the Amherst Police Department; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Cheektowaga Police Department; Erie County Sheriff’s Office; Hamburg Police Department; Lancaster Police Department; Niagara Frontier Transportation Authority; New York State Department of Correctional Services; New York State Police; U.S. Border Patrol; and U.S. Immigration and Customs Enforcement–Homeland Security Investigations.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Buffalo Man Arrested, Charged with Bank RobberyRead 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 Isaiah J. Brown, 27, of Buffalo, NY, was arrested and charged by criminal complaint with bank robbery. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that according to the complaint, on July 9, 2015, Brown entered the First Niagara Bank at 2853 Delaware Avenue in Kenmore, NY. The defendant approached the teller and asked to exchange a one dollar bill. After receiving four quarters, Brown handed the teller a note that stated “This is a robbery Give me all your $20, $50, $100 I do have a gun!!” The teller provided the defendant with a specific amount of money.
Brown, who was described as wearing a curly light brown wig, black zip up hoodie, and sunglasses, left the bank and go into a Liberty Cab. A witness at the scene called law enforcement who contacted Liberty Cab. The cab company located the vehicle through global positioning satellite (GPS) and assisted in leading officers to the location of the cab.
A vehicle stop was conducted and the defendant was detained. According to the complaint, officers located a wig, money band and U.S. currency inside the vehicle.
Brown made an initial appearance this afternoon before U.S. Magistrate Judge Hugh B. Scott and being held pending a detention hearing on July 16, 2015.
The criminal complaint is the result of an investigation by the Kenmore Police Department, under the direction of Chief Peter Breitnauer and the Federal Bureau of Investigation.The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Bucks County Woman Charged with Social Security FraudRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Criminal Information was filed on July 8, 2015 in U.S. District Court in Scranton charging a Newtown woman with allegedly defrauding the Social Security Administration of financial benefits intended for low-income individuals and families.
According to United States Attorney Peter Smith, in 2002 Dorothy Madison, age 51, of Newtown, Bucks County, was married but failed to report the marriage to the Social Security Administration’s Office in East Stroudsburg, Pennsylvania. Madison’s husband was gainfully employed, and by failing to report the resulting spousal income to the Social Security Administration, Madison obtained $58,901.96 in benefits to which she was not entitled over the ten year period following the marriage.
The government also filed a plea agreement which is subject to the approval of the court.
The case is the result of an investigation by the Social Security Administration. Prosecution is assigned to Assistant United States Attorney Peter Hobart.
Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under federal law for fraudulent acts in relation to Supplemental Security Income is five (5) years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Army National Guard Official Sentenced to 42 Months in Prison for Accepting $30,000 BribeRead the Press Release
An Army National Guard official was sentenced today to 42 months in prison for accepting a $30,000 bribe in exchange for steering a $3.6 million contract to a retired sergeant major of the Minnesota Army National Guard and his consulting company.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office, Acting Special Agent in Charge Paul Sternal of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.
Jason Rappoccio, 39, of Hampton, South Carolina, pleaded guilty on Feb. 3, 2015, to one count of conspiracy to commit bribery and one count of bribery. U.S. District Judge Liam O’Grady of the Eastern District of Virginia imposed the sentence and ordered Rappoccio to forfeit $31,328.
Rappoccio was an active duty sergeant first class in the Army National Guard. In connection with his guilty plea, Rappoccio admitted to accepting a $30,000 bribe from Timothy Bebus, a retired sergeant major of the Minnesota Army National Guard and owner of Mil-Team Consulting and Solutions LLC (Mil-Team). In exchange, Rappoccio agreed to steer a $3.6 million contract to Mil-Team by awarding the contract to a Small Business Administration (SBA) 8(a) certified company, chosen by Bebus, that Rappoccio understood would sub-contract a portion of the work to Mil-Team.
Rappoccio admitted that the $30,000 bribe was structured to conceal the payment. Specifically, Bebus gave $6,000 in cash directly to Rappoccio, and the remaining $24,000 was paid in a cashier’s check in the name of Rappoccio’s wife.
Rappoccio also admitted to accepting additional benefits in exchange for steering an additional $4 million contract to Mil-Team. In particular, Rappoccio solicited and received from Bebus airline tickets for two of Rappoccio’s family members. He also received NFL tickets worth over $1,300 from another co-conspirator.
In connection with this investigation into corruption within the National Guard Bureau, eight others, including Bebus, have been convicted of offenses related to the awarding of millions of dollars of Army National Guard marketing, retention and recruitment contracts. The investigation is ongoing.
The case was investigated by the FBI’s Washington Field Office, with assistance from DCIS’s Mid-Atlantic Field Office and Army-CID’s Expeditionary Fraud Resident Agency’s Major Procurement Fraud Unit. The case was prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia and Assistant U.S. Attorneys Marisa Seifan and Martin Coffey of the Eastern District of New York.
Another Indicted for Role in Identity Theft and Tax Fraud SchemeRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced another indictment in connection with a continuing effort to combat stolen identity refund fraud and other tax fraud schemes by the United States Attorney’s Office for the Middle District of Louisiana and the Baton Rouge Office of the Internal Revenue Service, Criminal Investigations.
In the most recent case, CAMERON BUTLER, age 33, of Baton Rouge, Louisiana, was indicted this week on six counts of receiving stolen government funds, in violation of Title 18, United States Code, Section 641. The indictment alleges that BUTLER obtained more than $100,000 in federal tax refunds, via electronic deposits to bank accounts he controlled, knowing that the refunds belonged to other taxpayers and that he was not entitled to the funds. If convicted, the defendant faces a significant term of imprisonment, fines, restitution, and the forfeiture of the proceeds from the alleged scheme.
This indictment follows the recent convictions of TA’SHA THOMAS, age 26, of Donaldsonville, Louisiana, and SHONDA V. JOHNSON, age 42, of Baton Rouge, Louisiana, both of whom have been convicted for their roles in an extensive stolen identity refund fraud scheme. On June 22, 2015, THOMAS pled guilty to access device fraud and aggravated identity theft. As THOMAS admitted, through her work at the Ascension Parish Health Unit, she gained access to personal identifying information of individuals in a database and sold the information 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. THOMAS admitted that, between January and August of 2012, she sold more than 400 access devices to Mona Hill in exchange for between $8,000 and $9,000.
Meanwhile, on July 1, 2015, JOHNSON pled guilty to three counts of receipt of stolen government property. As JOHNSON admitted, after Hill filed the fraudulent federal tax returns mentioned above, JOHNSON obtained several of the tax refunds, knowing that the refunds belonged to other taxpayers and that she was not entitled to the funds.
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. THOMAS and JOHNSON are awaiting sentencing.
U.S. Attorney Green stated: “Our office will continue to dedicate ourselves to working with IRS-CI and our other partners to unravel complex fraud schemes involving identity theft and tax refunds. Such schemes prey on honest taxpayers and must be stopped. I greatly appreciate the dedicated efforts of the agents and prosecutors handling these important cases.”
“We will continue to work aggressively with the United States Attorney's Office to protect innocent taxpayers and preserve the integrity of our tax system” said Jerome R. McDuffie, Special Agent-in-Charge, IRS Criminal Investigation. “We will vigorously pursue fraudulent refund claims. Protecting taxpayers’ money and personal information will remain one of our core missions.”
This ongoing investigation is being prosecuted by Assistant United States Attorney Jessica M.P. Thornhill.
NOTE: An indictment is an accusation by the Grand Jury. A defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Anne Arundel County Drug Dealer Sentenced to 7 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Victor Maurice Cook, age 40, of Millersville, Maryland today to a total of seven years in prison. Judge Motz sentenced Cook to five years in prison followed by five years of supervised release, for possession with intent to distribute cocaine, and two years in prison, consecutive to the five year sentence, for violating his supervised release from a previous drug conviction.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Assistant Special Agent in Charge Shawn Ellerman of the Drug Enforcement Administration, Baltimore District Office; and Anne Arundel County Police Chief Tim Altomare.
According to his plea agreement, on October 20, 2014, law enforcement officers received information that Cook would be engaged in a narcotics transaction in the vicinity of Route 2 and Arnold Road in Anne Arundel County. At that location, agents saw Cook crossing over the center lane divide several times and speaking on a hand held telephone as he was driving. Anne Arundel County Police detectives attempted to pull Cook over, but Cook continued driving, then tried to swerve into the detectives’ cars, striking one of them. Officers continued following Cook through the parking lots of businesses and ultimately heading southbound on Route 2. When Cook approached a red light with cars stopped at the intersection, Cook drove his car over the curb to get around the traffic and avoid stopping at the intersection. As he was driving, Cook threw a white plastic bag out of the passenger side window of his vehicle. Agents recovered the bag, while other officers approached Cook’s stopped vehicle and ordered him out. Cook struggled with the officers, but was ultimately removed from the vehicle, arrested and handcuffed. The plastic bag was found to contain over a kilogram of cocaine.
Cook also violated his supervised release from a 2001 federal drug conviction for which he served a 12 year sentence. Cook was serving five years of supervised release for this conviction when he was arrested in October 2014.
United States Attorney Rod J. Rosenstein praised the DEA and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Andrea L. Smith, who prosecuted this Organized Crime Drug Enforcement case, as well as Cook’s previous drug case.
Alton Man Pleads Guilty to Child Pornography ChargesRead the Press Release
Shaun Meyer, 33, of Alton, plead guilty today in the United States District Court to a one-count indictment charging him with Receipt of Child Pornography, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced.
Court documents filed in the US District Court establish that during an undercover Internet investigation, agents from the United States Secret Service Illinois Cyber-Crime Unit determined that Meyer was receiving child pornography using a peer-to-peer file sharing network. Agents obtained and executed a search warrant for Meyer’s residence during which they seized Meyer’s laptop computer. Meyer was interviewed by law enforcement agents and admitted that he had been downloading child pornography from the Internet for approximately two years using a file sharing program. During a forensic examination of Meyer’s laptop computer, agents recovered 171 video files containing child pornography.
Meyer faces a term of in federal prison of not less than five, but not more than twenty years, a fine up to $250,000, and a term of supervised release of not less than five years up to a term for life. Sentencing is scheduled for October 22, 2015.
This case is part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The investigation was conducted by the United States Secret Service Southern Illinois Cyber-Crime Unit, the Greenville Police Department and the Madison County Sheriff’s Department. The case is being prosecuted by Assistant United States Attorney Ali Summers.
Acton Man Indicted on Child Pornography ChargesRead the Press Release
BOSTON – Kenneth Howell, 49, was indicted today on one count of receipt of child pornography and one count of possession of child pornography. Howell was arrested and charged in a criminal complaint in May 2015.
In April 2015, Howell first came to the attention of federal agents when chat messages exchanged between another individual and he revealed that Howell was paying to view sex acts performed by minors in the Philippines over the Internet. In May 2015, law enforcement executed a search warrant at Howell’s home during which time Howell admitted that he downloaded, saved and distributed child pornography, and that he had been trading images of child pornography for four to five years. A preliminary review of Howell’s computer revealed over 100 videos of child pornography.
The charge of receipt of child pornography provides for a mandatory minimum term of five years and no greater than 20 years in prison. The charge of possession of child pornography provides for no greater than 20 years in prison. Both statutes provide for a mandatory minimum of five years and up to a lifetime of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Michael Shea, Deputy Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistance was also provided by the Massachusetts State Police and the Acton Police Department. The case is being prosecuted by Assistant U.S. Attorney Eve A. Piemonte of Ortiz’s Major Crimes Unit.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
9 July 2015
Winterville Man Sentenced for Receiving Child PornographyRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that in federal court today, WILLIE RIGGS GODFREY, III, 44of Winterville, North Carolina, was sentenced before United States District Judge Terrence W. Boyle. GODFREY received 125 months imprisonment followed by a 10 year term of supervised release.
On November 24, 2014, a Criminal Indictment was filed charging GODFRFEY with receiving and possessing child pornography, in violation of Title 18, United States Code, Section 2252. On January 20, 2015, GODFREY pleaded guilty to receiving child pornography.
According to the investigation, on January 13, 2014, the Pitt County Sheriff’s Office received a tip of an IP address downloading child pornography. On January 30, 2014, the Pitt County Sheriff’s Office received information that the IP address was in use by GODFREY at his house. On February 4, 2014, reports showed that IP address was last active on February 1, 2014, with 51 possible files believed to be child pornography.
On February 6, 2014, the Pitt County Sheriff’s Office executed a search warrant on GODFREY’s residence. GODFREY voluntarily acknowledged being in receipt of child pornography which would be on his computer but nothing produced by him. A search of GODFREY’s computer revealed 5,312 images, 162 videos, and 18 compressed files of child pornography and erotica.
Investigation of this case was conducted by the Pitt County Sheriff’s Office. Assistant United States Attorney Rudy E. Renfer prosecuted the case for the United States.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Vivian man, Texas man sentenced for cocaine and methamphetamine chargesRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that two men were sentenced for their roles in a cocaine and methamphetamine distribution ring operating in Caddo and Bossier parishes.
Eugene O’Neal Cross, 40, of Marshall, Texas, was sentenced to 120 months in prison for one count of distribution of methamphetamine; and Anthony D. Jackson, 25, of Vivian, La., was sentenced to 60 months in prison for one count of conspiracy to distribute cocaine by U.S. District Judge Donald E. Walter. According to evidence presented at the March 31, 2015, guilty plea, from February 21, 2014, until July 26, 2014, Jackson conspired to possess and distribute more than 500 grams of cocaine. Cross admitted to distributing more than 50 grams of methamphetamine on January 21, 2014. Using surveillance and controlled buys, agents recorded the defendants at various times possessing and distributing drugs in Caddo and Bossier parishes.
The defendants were arrested as part of the Organized Crime Drug Enforcement Task Force (OCDETF) Operation Cross the Line. The DEA and the Caddo-Shreveport Narcotics Task Force investigated the case. The OCDETF program is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for targeting national and regional level drug trafficking organizations, coordinating the necessary law enforcement entities and resources, and disrupting and dismantling of major drug trafficking organizations.
Assistant U.S. Attorney Allison D. Bushnell prosecuted the case.
Union Employee Sentenced for Theft from Health Care FundRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Paul Harnas, Jr., 30, of Elmira, NY, who was convicted of conspiring to defraud the Plumbers & Steamfitters Local 267 Insurance Fund, was sentenced to three years of supervised release by Chief U.S. District Judge Frank P. Geraci. The defendant was also ordered to pay restitution totaling $23,445 and perform 100 hours of community service. In addition, Harnas was directed to pay a 25% penalty on the fraudulently-obtained money to the Local 267 Insurance Fund.Assistant U.S. Attorney John J. Field, who handled the case, stated that Harnas created fake invoices for dental services that were never provided to him. The defendant then used the invoices to support false claims for reimbursement from the Local 267 Insurance Fund. Harnas also assisted others, including Jared Stevens, Gregory Haller and others who were involved in the scheme, by providing them with fake invoices. In total, Harnas and his co-conspirators fraudulently induced the Local 267 Insurance Fund to pay them $49,502.51 using this scheme.
Jared Stevens and Gregory Haller have been convicted and are awaiting sentencing.
The sentencing is the culmination of an investigation by Special Agents of the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia of the New York Regional Office, and the New York State Department of Financial Services, Frauds Bureau, under the direction of Superintendent Benjamin Lawsky.
Two charged with paying bribes to former head of anti-poverty agencyRead the Press Release
Two men were charged for paying bribes to the former head of a Cleveland-area anti-poverty agency in return for contracts from the agency, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office, and Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General—Chicago Region.
Robert Moman and John Calvetta were each charged via criminal information with one count of honest services mail fraud.
Moman, 77, of Tougloo, Miss., and John Calvetta, 71, of Solon, are charged with paying bribes to Jacqueline K. Middleton, who served as president and chief executive officer of the Council of Economic Opportunities of Greater Cleveland.
The CEOGC was organized with the purpose of serving low-income people of Cuyahoga County and Greater Cleveland. The CEOGC administered several federal, state and local programs designed to address the needs of low-income individuals, including Head Start, the Community Services Block Grant program and the Home Energy Assistance program.
Middleton, of Shaker Heights, previously pleaded guilty to two counts of honest services fraud, one count of bribery in federally funded programs and one count of Hobbs Act Conspiracy. She was sentenced to 30 months in federal prison.
Moman worked as a consultant for CEOGC. He received approximately $169,036 from CEOGC from 2008 through 2012. Moman provided $11,200 in kickback payments to Middleton in return for favorable actions, such as her authorization of contracts to Moman, according to the information.
Calvetta was an employee of a home and business renovation company located in Cleveland. That company received approximately $318,699 from CEOGC between 2008 and 2010 for parking lot renovations, flooring installation,classroom remodeling and other work. Calvetta provided gifts, payments and other things of value to Middleton worth $9,249 in the form of home renovation work and payments to vendors for related supplies on her behalf. This was done in return for Middleton steering work to the company, according to the information.
The case is being prosecuted by Assistant U.S. Attorney Michael L. Collyer following an investigation by the Federal Bureau of Investigation and the Department of Health and Human Services—Office of Inspector General.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
A charge is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Two Doctors and Four Others Arrested in $12 Million Health Care Fraud ConspiracyRead the Press Release
HOUSTON – Six Houstonians are in custody on wide-ranging charges involving a $12 million conspiracy to commit health care fraud and to pay kickbacks, announced U.S. Attorney Kenneth Magidson. The arrests were made in conjunction with a search warrant executed at a downtown office building where several clinics and a blood testing laboratory were located.
The 25-count indictment was returned July 1, 2015, and unsealed today. Those charged and arrested today include the owner and operator of the clinics and lab - Mktrich “Mike” Yepremian, 58, Dr. Harding Ross, 61, Dr. Faiz Ahmed, 63, Michael Wayne Wilson, 46, and Eric Johnson, 61, all of Houston. A sixth defendant - Jermaine Doleman, 38, also of Houston, was already in custody in another health care fraud scheme charged in this district over allegedly similar conduct.
They are expected to make their initial appearances before U.S. Magistrate Judge Frances Stacy at 2:00 p.m. today.
The indictment alleges Yepremian paid Doleman, Wilson and Johnson to bring Medicare and Medicaid patients to his clinics in order for him to bill for multiple, medically unnecessary diagnostic and blood tests. In turn, Doleman, Wilson and Johnson would then allegedly pay the patients to attend the clinics.
According to the indictment, the scheme began in 2006. The indictment alleges Yepremian controlled all funds from the false billing, but the clinics were allegedly held in the names of “straw owners.” The clinics involved included Crawford Medical Services, Mid City Healthcare and Care Family Practice all in Houston; Arca Medical Clinic formerly in Conroe and now in Houston, as well as a lab called Empire Clinical Laboratory in Houston.
Yepremian is also charged with money laundering for allegedly funneling money to relatives.
The statutory maximum penalty upon conviction of either the conspiracy, money laundering or any of the substantive counts of health care fraud is up to 10 years in federal prison and a possible $250,000 maximum fine. If convicted of a violation of the anti-kickback statute, Yepremian, Wilson and Johnson also face up to five years imprisonment as well as a possible $250,000 maximum fine.
The charges are the result of the investigative efforts of the Texas Attorney General’s Medicaid Fraud Control Unit and the FBI. Special Assistant U.S. Attorney Suzanne Bradley and Assistant U.S. Attorney Tina Ansari are prosecuting the case.
Two Convicted in Multi-Million Dollar Investment Fraud Scheme That Victimized Professional Hockey Players and Long Island InvestorsRead the Press Release
Following ten weeks of trial, a federal jury in Central Islip, New York, today returned a verdict convicting Phillip A. Kenner, a financial advisor, and Tommy C. Constantine, a part-time race car driver, on charges of wire fraud, wire fraud conspiracy, and money laundering conspiracy arising from the defendants’ pocketing of millions of dollars raised from Long Island businessmen and professional athletes ostensibly for the purpose of funding the development of land in Hawaii and a start-up credit card business based in Arizona. Sentencing has been scheduled for November 20, 2015. The defendants face a maximum of 20 years’ imprisonment on each count of conviction as well as forfeiture of up to $30 million in proceeds derived from the frauds.
The verdict 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 (FBI), and Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS).
The evidence from 39 government witnesses and hundreds of exhibits, including audio recordings made by several investor victims of each of the defendants as they struggled to comprehend the extent of their losses, established that as early as 2004, Kenner and Constantine used a labyrinth of holding companies to siphon millions in investor dollars away from their intended use and into companies, real estate, and other ventures that solely benefitted the defendants.
“Driven by personal greed, Kenner and Constantine spent years lying to investors and stealing their money, and then attempted to conceal their fraud by repeatedly and brazenly avoiding responsibility, shifting blame, and scapegoating others. Today, their scheme has been brought to an end,” stated Acting United States Attorney Currie. Mr. Currie expressed his grateful appreciation to the United States Attorney’s Office for the District of Arizona, the FBI and IRS Phoenix Offices, and the Scottsdale Police Department for their assistance in this prosecution.
"After defrauding victim investors out of millions of dollars over many years, the lies, deception, and criminal behavior of Kenner and Constantine have caught up with them today. The FBI thanks all of our partners for their assistance with this case," said FBI Assistant Director-in-Charge Rodriguez.
“Hopefully, today’s verdict will bring some closure to the victims of Kenner and Constantine,” said IRS Special Agent-in-Charge Kitchen. “Their success in defrauding so many individuals reinforces how important it is to use care when investing, no matter how much confidence you have in the individual or company you are investing with. Fortunately, federal law enforcement strives to be vigilant in uncovering fraud schemes and thorough in its investigation of them.”
As a college hockey player at Renssellaer Polytechnic Institute in Troy, New York, Kenner befriended then-teammate and future Olympian and National Hockey League (NHL) star Joe Juneau, who testified during the trial that after college he helped introduce Kenner to a number of other NHL players in the 1990’s as Kenner began working as a financial advisor in Boston. Through those early contacts, Kenner developed a clientele that included one-time New York Islanders forward Michael Peca, 1995 first-round draft pick and U.S. Olympian Bryan Berard, and Stanley Cup champions Darryl Sydor, Bill Ranford, and Sergei Gonchar, among other NHL players, whose careers blossomed just as Kenner took over greater and greater control of their finances and wealth.
The Hawaii Real Estate Investment Scheme
Beginning in 2003, Kenner convinced Peca, Berard, and several other clients to invest $100,000 each for the development of land in Hawaii into luxury estates. Kenner also had the players open lines of credit, collateralized by their personal stock, bond, and savings accounts, worth at least $10 million. Witness after witness testified that Kenner assured them that the credit lines would be used only to pay for initial development costs associated with the Hawaii project, and would be fully replenished after Lehman Brothers Holdings, Inc. agreed to loan the project up to $105 million in August 2006. In fact, the government’s evidence established that Kenner borrowed nearly all of his clients’ lines of credit and used the money to purchase his personal interest in unrelated real estate projects in Hawaii and Mexico, transfer funds to his partner in crime Constantine, and fund both his and Constantine’s personal expenses.
Meanwhile, Kenner and Constantine negotiated sweetheart deals that also dissipated the players’ assets and diverted millions to the defendants’ various pet projects. In one such deal, Constantine brokered a loan from an Arizona businessman for $3.5 million, ostensibly to close on a certain Hawaii parcel of land. The loan would have been unnecessary but for the fact that Kenner had already stolen millions through the player lines of credit. Worse, the loan agreement included a $2 million prepayment penalty at a time when the Lehman funding deal was all but certain to trigger the penalty. Although he put up no money of his own, Constantine walked away from that single loan with some $2 million that represented the diverted player assets. Bank records established that Constantine almost immediately kicked back a portion of the loan repayment proceeds to Kenner.
The Eufora LLC Scheme
During the conspiracy, Constantine operated Eufora, LLC, a prepaid debit card business which he founded in 2002. Between February 2008 and May 2009, as Eufora’s operating balances were in the red and Constantine testified in civil depositions that the company was nearly worthless, Kenner urged his clients to invest in Eufora. Approximately $700,000 of player investments was immediately wired out of Eufora to Kenner-controlled accounts. Another $725,000 in funds were similarly diverted to accounts that Constantine controlled and was used to cover the costs of Kenner’s and Constantine’s personal mortgages, credit card bills, and other debts.
In December 2009, Constantine fraudulently convinced a Long Island electrician, who had previously worked on a Kenner real estate project, to invest another $200,000 in Eufora, an investment that Constantine subsequently disavowed. In a recorded phone conversation played for the jury, Constantine offered a series of contradictory explanations refusing to acknowledge that the $200,000 was to have bought the victim a 1.5 percent interest in the company, which included a refusal to admit receiving the money, an admission that the investment had been received but not approved by Eufora’s board of directors, and even a suggestion that the victim should have asked for the money back before it was spent, even though records show that victim’s money was diverted and spent by the defendant within a day of being wired into Constantine’s control.
The Global Settlement Fund Scheme
In early 2009, Kenner’s player-clients who had opened lines of credit for the Hawaii venture received notices that their lines of credit were in default. For years, Kenner concealed that he had wiped out most of his clients’ savings by borrowing against one line of credit to pay monthly interest charges for another. By late 2008, the concealment scheme collapsed. Rather than admit to the diversions, Kenner and Constantine used the crisis to engineer a new phase of their fraud conspiracy by persuading the players to contribute new money towards something they termed the Global Settlement Fund or GSF.
At trial, the victims testified that Constantine and Kenner told them that the reason for their losses was the purported failure to repay loans by the managing partner of a Mexican resort known as Diamante Cabo San Lucas (DCSL). None of the players had previously been told that funds intended for the Hawaii land deal had been loaned to another developer in Mexico. Furthermore, documentary evidence at trial showed that much of the money that Kenner stole from the Hawaii project ended up being used to buy Kenner a personal 39 percent stake in DCSL.
Convinced that the only hope to recoup their losses lay in contributing to the Global Settlement Fund to fund litigation against the DCSL partner, Constantine and Kenner raised more than $2.9 million from the players. However, only $225,000 in contributions to the GSF were used for litigation. Instead, the vast majority of the money was again diverted to the defendants’ personal use, which included Constantine buying his personal home out of foreclosure, Kenner and Constantine paying legal bills related to Kenner’s personal investment in a tequila company in Mexico, defending Constantine in Florida litigation over his race car sponsorship activities, and an aborted effort by Constantine to buy Playboy Enterprises.
The Sag Harbor Scheme
In a separate scheme, Kenner acquired a 25 percent interest in real property in Sag Harbor, New York, without using any of his own money. To achieve this result, Kenner took $395,000 from Michael Peca’s line of credit, without Peca’s knowledge or permission, while at the same time convincing Berard to pay $375,000 for a supposed 50 percent interest, when in fact Kenner diluted Berard’s stake by half and pocketed the excess money. In early 2010, the investors realized Kenner had not contributed any of his own money, and they sold the property at a loss.
The government’s case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorneys James M. Miskiewicz, Saritha Komatireddy, and Diane Leonardo are in charge of the prosecution.
The Defendants:
PHILLIP KENNER
Age: 46
Scottsdale, AZTOMMY CONSTANTINE
Age: 48
Scottsdale, AZE.D.N.Y. Docket No. 13-CR-607 (JFB)
Two Chiropractors Arrested for Roles in Health Care Fraud Scheme Connected to Clinics in Bakersfield, Visalia and FresnoRead the Press Release
FRESNO, Calif. — Following arrests made earlier today, a federal indictment was unsealed charging three defendants with conspiracy to commit health care fraud and 15 counts of health care fraud, United States Attorney Benjamin B. Wagner announced.
Chiropractor Bahar Gharib-Danesh, 38, of Woodland Hills, was arrested in Los Angeles; Chiropractor Na Young Eoh, 41, of Bakersfield, was arrested in Bakersfield; and clinical psychologist John Terrence, 72, of Marina Del Rey, is expected to voluntarily appear before the U.S. District Court in Fresno within the next 30 days.
“Identifying and prosecuting fraud in the provision of health care services is a priority for this office,” said U.S. Attorney Wagner. “We will continue to work with our federal and state partners in pursuing dishonest health care providers who plunder public and private health care insurance plans for their own gain.”
According to the indictment returned on July 2, 2015, Gharib-Danesh was a chiropractor and the manager of Pain Relief Health Centers (PRHC). PRHC was headquartered in Los Angeles, and had clinics in Bakersfield, Visalia and Fresno, as well as in Los Angeles County. Eoh was also a chiropractor, and was the treating physician for PRHC’s Kern County workers’ compensation claims. Terrence was a clinical psychologist who saw patients from the Bakersfield clinic.
According to the indictment, PRHC recruited patients who were workers claiming to have an injury. In treating the patients, Gharib-Danesh instructed her staff to add as many injured body parts for treatment as possible to generate higher billings. The treatment plan generally included shock wave therapy, electro stimulation therapy, myo-facial release/massage, physical therapy, chiropractic manipulation, compound creams, and psychological evaluation. Nearly every patient was scheduled for the same treatments, and the maximum amount of treatments allowed by law was generally billed to the insurance company. Eoh operated out of the Bakersfield Clinic, the Visalia Clinic, and the Fresno Clinic and would sign the treatment plans and referral forms.
If the claim of injury was denied by the insurance company, a lien would be filed, and the claims would either be litigated before the California Workers’ Compensation Appeals Board or be settled by negotiations through the parties. Lien settlements for less than the full amount of the claim were acceptable because of the high volume of patients recruited and by the large amount of medical fees generated.
The indictment further alleges that Gharib-Danesh directed Eoh to refer all patients who came into the clinic to Terrence for a psychological evaluation, regardless of the injury the patient reported. Terrence submitted bills and reports for each patient that were virtually identical. He also allegedly fraudulently billed for patients at a rate higher than legally allowed. According to the indictment, Terrence provided each patient with approximately 20.8 hours of psychological evaluations in a single day. On one day, Terrence billed a total of 291.2 hours for treating 14 patients. In one period of two weeks, Terrence billed over a thousand hours treating patients and writing reports. Between 2005 and 2012, Terrence submitted claims for psychological services in workers’ compensation cases totaling in excess of $5.6 million.
This case is the product of an investigation by the Federal Bureau of Investigation, the California Department of Insurance, and the Kern County District Attorney’s Office. Assistant United States Attorneys Mark J. McKeon and Patrick R. Delahunty are prosecuting the case.
If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count of the indictment. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Transporter Guilty of Moving Huge Cocaine LoadRead the Press Release
LAREDO, Texas – A Laredo man has entered a guilty plea to possessing with the intent to deliver 58 kilograms of cocaine, announced U.S. Attorney Kenneth Magidson.
Heriberto Benavides Jr., 26, pleaded guilty before U.S. Magistrate Judge Guillermo R. Garcia. At the hearing, Benavides admitted that on May 4, 2015, he drove a green Jeep Liberty he knew was loaded with 40 bundles of containing cocaine from Laredo, intending to take the drugs across the country to New York City.
As he attempted to cross through the Border Patrol checkpoint on I-35, a canine alerted to the presence of drugs hidden somewhere in the vehicle. Authorities soon discovered the bundles which were found to weigh 128 pounds. Benavides them admitted to Homeland Security Investigations (HSI) agents that he was transporting he drugs in order to avoid paying for a prior incident when he had unsuccessfully attempted to transport another drug load.
Benavides has been in custody since his arrest on May 4, 2015, where he will remain pending sentencing, which will be set in the near future. At sentencing, Benavides faces a minimum sentence of 10 years in federal prison and a possible $10 million fine.
The investigation leading to the charges was conducted by Border Patrol and HSI. Assistant U.S. Attorney Jose Homero Ramirez is prosecuting the case.Three More Defendants from Georgia Sentenced in Credit Card Fraud SchemeRead the Press Release
BOISE – Clarence Collins, 34, of Douglasville, Georgia, Charles Moore, 25, of Stone Mountain, Georgia, and Jonathan Penn, 20 of Suwanee, Georgia, were each sentenced this week in United States District Court for their roles in a credit card scheme that targeted local retailers in October 2014, U.S. Attorney Wendy J. Olson announced. Terrance Barimah, 26, of Floranceville, Georgia, was scheduled for sentencing on July 8, 2015, but failed to appear for the hearing. Chief U.S. District Judge B. Lynn Winmill issued a warrant for his arrest.
Clarence Collins was sentenced on July 6, 2015, to 78 months in prison followed by three years of supervised release for conspiracy to commit wire fraud and aggravated identity theft. Judge Winmill also ordered Collins to pay restitution of $22,679.54 along with the other co-defendants and to forfeit $49,953.41 in cash proceeds from the offense. He pleaded guilty on March 31, 2015.
Charles Moore was sentenced to 51 months in prison followed by three years of supervised release for conspiracy to commit wire fraud and aggravated identity theft. Judge Winmill also ordered Moore to pay restitution of $22,679.54 along with the other co-defendants and to forfeit $49,953.41 in cash proceeds from the offense. He pleaded guilty on April 26, 2015.
Jonathan Penn was sentenced to 24 months in prison followed by three years of supervised release for conspiracy to commit wire fraud. Judge Winmill also ordered Penn to pay restitution of $22,679.54 along with the other co-defendants and to forfeit $49,953.41 in cash proceeds from the offense. He pleaded guilty on April 26, 2015.
According to the plea agreements, Collins, Moore, and Penn each admitted traveling to Idaho, along with their co-defendants, for the purpose of making fraudulent purchases of gift cards and prepaid debit cards from retail stores, using stolen credit card numbers encoded onto stock debit cards. Each defendant admitted to obtaining the stock debit cards encoded with unauthorized credit card numbers, and making purchases at retail stores on October 5, 2014.
In his plea agreement, Collins admitted to traveling to five separate retail stores, and making eight purchases of gift cards and pre-paid debit cards, using five different credit card numbers that he was not authorized to use. Upon his arrest, officers found seven debit cards encoded with unauthorized credit card numbers in his possession, and 46 gift cards in the vehicle he was in.
In his plea agreement, Moore admitted to traveling to five separate retail stores, and making twenty-nine purchases of gift cards and pre-paid debit cards, using nine different credit card numbers that he was not authorized to use. Upon his arrest, officers found $2,740 and 43 gift cards in his possession.
In his plea agreement, Penn admitted to traveling to five separate retail stores, and making twenty-four purchases of gift cards and pre-paid debit cards, using six different credit card numbers that he was not authorized to use. Upon his arrest, officers found three debit cards encoded with unauthorized credit card numbers and thirty gift cards in his possession.
Collins, Moore, Penn, and Barimah were indicted, along with Kyandre Banks, 34, of Lilburn, Georgia, Brian Treadwell, 25, of Buford, Georgia, Mikki Williams, 25, of Loganville, Georgia, Rashine Kale, 38, of Lawrenceville, Georgia, Jean Estinville, 26, of Lawrenceville, Georgia, and Rakeen Anderson, of Atlanta, Georgia, on charges relating to a wire fraud and identity theft scheme. Collins, Banks, Estinville, Kale, Moore, Penn, Williams and Treadwell were each charged with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. Anderson was charged with conspiracy to commit wire fraud and wire fraud. Barimah was charged with conspiracy to commit wire fraud and illegal possession of device-making equipment.
Co-defendants Brian Treadwell and Mikki Williams were sentenced on June 16, 2014. Treadwell received 75 months in prison for conspiracy to commit wire fraud and aggravated identity theft. Williams received three years of probation and 200 hours of community service for misprision of a felony.
Three more defendants are scheduled for sentencing before Judge Winmill. Co-defendant Rashine Kale is scheduled for sentencing on July 22, 2015. Co-defendant Jean Estinville is scheduled for sentencing on August 4, 2015. Co-Defendant Rakeen Anderson is scheduled for sentencing on August 17, 2015. Co-defendant Kyandre Banks remains a fugitive.
The case was investigated by the United States Secret Service and the Boise Police Department.
Three Individuals Found Guilty of Firearm OffensesRead the Press Release
SAN JUAN, P.R. – After an eight-day jury trial, José Cepeda-Martínez, Peter Rosario-Serrano and Juan Tanco-Baez were found guilty of firearm offenses, announced United States Attorney Rosa Emilia Rodríguez-Vélez. United States District Court Senior Judge Daniel Domínguez presided over the trial.
According to the evidence presented at trial, on or about March 26, 2014, the Puerto Rico Police Department (PRPD) arrested Cepeda-Martínez, Rosario-Serrano and Tanco-Báez for weapons violations and for the murder of an individual which occurred at the Román Baldorioty de Castro Expressway in Carolina, PR on the same day.
In the morning of March 26, 2014, a 911 call alerted the PRPD about a rapid gunfire reported at the Baldorioty Expressway. The call also alerted about a Jeep Cherokee fleeing the scene and going towards San Juan. Officers who were patrolling the area noted and identified the license plate of the Jeep Cherokee, and immediately pursued the vehicle. The individuals ended up fleeing the scene and later were arrested. A total of three Glock Pistols, two of them modified to fire as automatic weapons, ammunition, marihuana and three cellular phones were seized upon arrest.
“This conviction marks yet another victory in our fight against illegal firearms and violent crime in Puerto Rico. Our team of prosecutors and case agents set an excellent example of teamwork during the investigation which led to the conviction of these defendants at trial,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico.
The case was prosecuted by Special Assistant United States Attorney Kelly Zenón-Matos and Assistant United States Attorney Victor Acevedo-Hernández. The defendants are facing a maximum sentence of 10 years for each count.
Three Charged in Manhattan Federal Court in Connection with June 18, 2015, Upper West Side MurderRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Delano A. Reid, Special Agent in Charge of the New York Division of the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of charges against ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS.
U.S. Attorney Preet Bharara stated: “A shopkeeper at a small store on the Upper West Side of Manhattan tragically lost his life last month when he was shot and killed during a robbery of his store. My Office and our law enforcement partners will ensure that those responsible for such senseless violence will be held to account.”
ATF Special-Agent-in-Charge Delano A. Reid stated: “With the arrest of Michael Adams, the reign of terror this alleged murderous robbery crew perpetrated on our streets comes to an end. The crew’s violent acts necessitated a quick response from law enforcement. I am grateful to all the investigators and prosecutors involved. Their hard work made it possible to quickly identify and arrest each of the crew members so that they no longer pose a threat to the citizens of New York City. The ATF is committed to combating violent crime and will invest its resources and personnel as needed to ensure that the quality of life in this great city is not diminished by those who have little or no regard for human life.”
NYPD Commissioner William J. Bratton stated: “Investigators wasted no time in tracking down and holding those persons allegedly responsible for this violent robbery, which ended in the senseless death of shopkeeper Bubacarr Camera. I want to thank the NYPD detectives and our law enforcement partners who were integral to these arrests, which I hope will offer some consolation to the family who lost their loved one to a meaningless criminal act.”
According to the allegations in the Indictment unsealed today in Manhattan federal court and other documents in the public record[1]:
On June 18, 2015, ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS shot and killed a shopkeeper, Bubacarr Camera, in the course of a robbery of a store located at 906 Amsterdam Avenue on the Upper West Side of Manhattan.
Two days before that murder, on June 16, 2015, ZUBEARU BETTIS and STEPHEN ADAMS robbed another shopkeeper at a store located at 2251 7th Avenue, in Manhattan. During that robbery, BETTIS brandished and discharged a firearm, while ADAMS physically accosted the victim.
* * *
BETTIS, 44, and STEPHEN ADAMS, 27, both of the Bronx, are charged with robbery and conspiracy to commit robbery, possessing a firearm in furtherance of a crime of violence, which firearm was brandished and discharged, and possessing a firearm in furtherance of a crime of violence resulting in death. MICHAEL ADAMS, 29, of the Bronx, is charged with robbery and conspiracy to commit robbery, and possessing a firearm in furtherance of a crime of violence resulting in death. If convicted, all three defendants face a maximum of life in prison or death, and a mandatory minimum of 10 years in prison. The maximum and minimum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.
MICHAEL ADAMS was arrested this morning in the Bronx and was presented this afternoon before United States Magistrate Judge Michael H. Dolinger and ordered detained. BETTIS and STEPHEN ADAMS were previously arrested on June 26, 2015, and ordered detained.
Mr. Bharara praised the outstanding investigative work of the SPARTA Task Force – which comprises agents and detectives of the ATF, the NYPD, and the U.S. Marshals Service – and of detectives from the NYPD’s Manhattan North Homicide Squad and the 24th Precinct Detective Squad. He also thanked the New York County District Attorney’s Office for their assistance.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Jared Lenow is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Zubearu Bettis et al., 15 Cr. 410 (LAK)
COUNT
CHARGE
DEFENDANTS
MAXIMUM PENALTIES
1
Conspiracy to commit robbery
ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS
20 years in prison
2
Robbery
ZUBEARU BETTIS and STEPHEN ADAMS
20 years in prison
3
Robbery
ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS
20 years in prison
4
Carrying and using a firearm during and in relation to, and possessing a firearm in furtherance of, a crime of violence, which was brandished and discharged
ZUBEARU BETTIS and STEPHEN ADAMS
Life in prison
Mandatory minimum 10 years in prison consecutive to any other sentence
5
Carrying and using a firearm during and in relation to, and possessing a firearm in furtherance of, a crime of violence, resulting in the death of another
ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS
Life in prison or the death penalty
Mandatory minimum 10 years in prison consecutive to any other sentence
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Tampa Woman Sentenced to Two Years in Prison on Health Care Fraud ChargesRead the Press Release
Tampa, FL – United States District Judge Mary S. Scriven today sentenced Lisvet Martinez (42, Tampa) to two years in federal prison for health care fraud. The Court also entered a forfeiture money judgment of $124,676.25, along with a restitution order in the amount of $224,715.09. Martinez pleaded guilty on February 25, 2015.
According to court documents, Martinez operated Lissmart Medical Supply and Lissmart Pharmacy. She fraudulently billed Medicare and Medicaid for enteral nutrition services and supplies for beneficiaries who are not intubated and, therefore, not qualified to receive these services. Instead, Martinez provided oral nutrition products, like Boost, that are normally available at retail locations. She billed Medicare and Medicaid by submitting false documentation that these services were medically necessary and that she had the medical documentation of their intubated condition, when she did not.
In addition, Martinez fraudulently billed Medicare Part D and Medicaid for prescriptions that had not been prescribed by a physician, were not medically necessary, and had not been supplied to Lissmart Pharmacy.
This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General and the Florida Attorney General’s Medicaid Fraud Control Unit. It was prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.
Sentencings for July 6 - July 9, 2015Read the Press Release
Andrew Lambert Silicani, 23, of Cheyenne, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on July 9, 2015, on four counts of use of interstate commerce facilities in the commission of murder-for-hire. Silicani was arrested in Rawlins, Wyoming. He received 420 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $400.00 special assessment. This case was investigated by the Wyoming Department of Corrections and the Federal Bureau of Investigation.
James Robert Ford, 49, of Rock Springs, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on July 8, 2015, for conspiracy to distribute between 50 and 200 grams of a mixture or substance containing a detectable amount of methamphetamine and for possession of an unregistered sawed-off shotgun. Ford was arrested in Rock Springs, Wyoming. He received 57 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $200.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation, the U.S. Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Juan Jose Cortez-Becerra, 38, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on July 6, 2015, for illegal re-entry of a previously deported alien into the United States. Cortez-Becerra was arrested in Jackson, Wyoming. He received time served, plus 10 days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Lazaro Fernandez-Vargas, 40, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on July 6, 2015, for illegal re-entry of a previously deported alien into the United States. Fernandez-Vargas was arrested in Jackson, Wyoming. He received time served, plus 10 days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Scott resident pleads guilty to failing to update his sex offender registrationRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a Scott resident pleaded guilty to failing to register his correct address for his sex offender identification.
Charles Edward Shinn, 44, of Scott, La., pleaded guilty before U.S. District Judge Richard T. Haik to one count of failure to update his sex offender registration. According to evidence presented at the guilty plea, U.S. Marshals learned in January of 2015 that Shinn was living in Louisiana even though he was registered as a sex offender in Mississippi. Upon further investigation, Shinn was found to be living in Scott and working in Lake Charles, La. Shinn was arrested on February 6, 2015. Law enforcement found multiple receipts from local stores in Louisiana dating back to September of 2014, and the owner of the home in Mississippi where Shinn said he lived reported that Shinn had never lived there.
Shinn was convicted in March of 1996 of felony carnal knowledge of a juvenile in St. Tammany Parish in the 22nd Judicial District of Louisiana. The offense occurred in December of 1993 and involved a 13-year-old. Shinn received four years of probation and was required to register as a sex offender. He never complied with sex offender registration requirements, removed himself from Louisiana Probation and Parole supervision in 1999, and remained a fugitive for the next 10 years. Shinn was arrested in August of 2010 and prosecuted by the U.S. Attorney for the Southern District of Alabama for failure to register as a sex offender. In August of 2011, he received a 10-month federal prison sentence, revocation for the State of Louisiana probation violation, and five years of federal supervised release. After completing his revocation prison term in June of 2014, Shinn was released from the Louisiana Department of Corrections, but never reported to U.S. Probation concerning his federal supervised release. He registered as a sex offender in St. Martin Parish on June 9, 2014, and reported on July 1, 2014, that he had moved to a Mississippi address.
Shinn faces up to 10 years in prison, five years to life supervised release and a $250,000 fine. A sentencing date was not set.
The U.S. Marshals Service conducted the investigation. Assistant U.S. Attorney Robert F. Moore is prosecuting the case.
San Antonio Businessman Sentenced to Federal Prison in Bribery SchemeRead the Press Release
In San Antonio today, 51-year-old Oscar Gilberto Rodriguez was sentenced to 30 months in federal prison for his role in a bribery scheme involving City of San Antonio contracts announced Acting United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Xavier Rodriguez ordered that the former employee of the San Antonio firm Pape-Dawson Engineers, Inc., pay over $315,000 restitution and be placed on supervised release for a period of three years after completing his prison term.
According to court records, between 2004 and 2009, the defendant conspired with a former City of San Antonio employee to defraud and steal money from Pape-Dawson and its clients through Rapid Permit Service, Inc. (RPS). RPS was a hoax company created by Rodriguez and 44–year-old Fernando Jose De Leon, former Assistant Development Services Director of the Land Development Division within the City of San Antonio’s Planning and Development Services Department, to do permit expediting work on Pape-Dawson projects. As part of the conspiracy, Rodriguez would submit fraudulent RPS invoices to Pape-Dawson for payment. Rodriguez and De Leon subsequently divided the illegally obtained proceeds.
On October 16, 2014, Rodriguez and De Leon each pleaded guilty to conspiracy to commit wire fraud, mail fraud and to use interstate communication facilities to facilitate bribery under Texas law. Sentencing for De Leon is scheduled for 1:30pm on August 5, 2015, before Judge Rodriguez. De Leon faces up to five years in federal prison.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney James Blankinship is prosecuting this case on behalf of the Government.
Rockford Man Sentenced to 12 Years in Federal Prison for Drug-Trafficking and Firearm OffensesRead the Press Release
ROCKFORD — A Rockford man was sentenced yesterday in federal court on drug-trafficking and firearm charges. JARVIS WASHINGTON, 28, of Rockford, Ill., was sentenced by U.S. District Judge Frederick J. Kapala to a total of 12 years in federal prison, and ordered to serve 4 years of supervised release following his term of imprisonment. After a 3-day jury trial in U.S. District Court, Washington was convicted on April 1, 2015, of possession of heroin and cocaine base (“crack cocaine”) with intent to distribute, possession of marijuana with intent to distribute, and possession of a firearm and ammunition as a felon.
According to the indictment and evidence at trial, on Sept. 24, 2013, Washington possessed with intent to distribute at least 94.6 grams of heroin, 227.1 grams of crack cocaine, and 376.7 grams of marijuana. Many of the drugs were already individually packaged for sale, and Washington possessed the tools to package the remaining drugs for sale. In addition, Washington possessed a loaded .45 caliber handgun and both .45 caliber and .40 caliber ammunition. Washington previously had been convicted of a felony punishable by a term of imprisonment exceeding one year and, therefore, was prohibited by law from possessing a firearm and ammunition.
The defendant was originally charged in state court and was transferred to federal court where he was charged under tough federal firearms laws as part of the Project Safe Neighborhoods program. Project Safe Neighborhoods is an intensive, cooperative effort between local, state, and federal law enforcement to attack gun crimes. The cornerstone of the program is that every defendant committing an offense involving a gun will be reviewed for possible federal prosecution in order to obtain the harshest penalties for the worst offenders. Additional information about Project Safe Neighborhoods may be found at: www.psn.gov.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffrey A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; and Gary Caruana, Winnebago County Sheriff. The Rockford Police Department and Loves Park Police Department assisted in the investigation.
The government was represented by Assistant U.S. Attorneys John G. McKenzie and Talia Bucci.
Redding Man Pleads Guilty to Falsely Certifying More than 570 Oxygen Cylinders for Reuse, Including Reuse in AircraftRead the Press Release
SACRAMENTO, Calif. — Danniel A. Hoose, 49, of Redding, pleaded guilty today to one count of falsely certifying more than 570 oxygen cylinders for reuse, including reuse in aircraft, United States Attorney Benjamin B. Wagner announced.
According to court documents, Hoose owned and operated Shasta Fire Equipment Inc. (Shasta) in Redding and held a Department of Transportation (DOT)-issued permit to test oxygen and other gas-containing cylinders and to certify those cylinders for reuse for various purposes, including in aircraft. Acting on an anonymous complaint, investigators discovered that between March 2013 and June 2013, Hoose was personally responsible for performing all cylinder tests at Shasta, even though Hoose’s DOT certification to perform such tests had expired nearly a year earlier. Investigators also found that Shasta’s re-qualification equipment was in disrepair, and that Shasta’s test procedures, test accuracy, and test records failed to satisfy regulatory requirements.
According to documents filed in federal court today, Hoose admitted that he falsely certified more than 570 cylinders for reuse after conducting incomplete or, in some cases, no tests on those cylinders. Hoose also admitted that approximately 58 oxygen cylinders that he improperly tested or did not test were returned to service and installed in aircraft.
All of the cylinders were recovered and re-tested during the investigation.
This case is the product of an investigation by the U.S. Department of Transportation, Office of Inspector General. Assistant United States Attorney André M. Espinosa is prosecuting the case.
Hoose is scheduled to appear before U.S. District Judge Troy L. Nunley on September 10, 2015, for sentencing. The maximum statutory penalty for a making and using a materially false writing concerning an aircraft part, which relates to the aviation quality of a part installed in an aircraft, is 15 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Pasco Man Sentenced to More Than 7 ½ Years’ Prison for Possession of a FirearmRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Victor Manuel Angulo, age 36, of Pasco, Washington, was sentenced today after having been found guilty after a jury trial of being a felon in possession of a firearm and ammunition. Senior United States District Court Judge Edward F. Shea sentenced Angulo to a 92-month term of imprisonment and a three-year term of court supervision following release from federal prison.
Angulo was previously convicted of felony drug charges, specifically two counts of Delivery of Cocaine in 2000 in Franklin County Superior Court, for which he was sentenced to 21 months of imprisonment. In October of 2013, Angulo was convicted in Pasco Municipal Court of Assault-Domestic Violence against his former girlfriend, for which he subject to a no-contact order with his former girlfriend. According to testimony at trial, Angulo arrived at his former girlfriend’s home in Pasco, on the night of December 24, 2013, and let himself into her house when she was not there. Her parents arrived at the residence and found Angulo in her home at midnight, with a firearm. When his former girlfriend’s family called the police, Angulo fled out the backdoor of the residence and discarded the firearm in a neighbor’s trashcan prior to being apprehended by the responding Pasco Police Department officers. When arrested, Angulo had ammunition in his pocket and the Pasco Police officers located the discarded firearm.
According to information disclosed during court proceedings, at the time Angulo possessed the firearm, he was federally prohibited from possessing a firearm on four grounds: Angulo was a felon, Angulo had been convicted of a misdemeanor domestic violence assault offense, Angulo was subject to a no-contact order, and Angulo was a regular methamphetamine user.
Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington, said, “Convicted felons, particularly those with domestic violence convictions and subject to no-contact orders, who violate those no-contact orders while possessing firearms, are particularly dangerous. Federal and local law enforcement officers are committed to protecting the community from such offenders. This case is just one example of the successful cooperation of the ATF and the Pasco Police Department to reduce gun-related violence in our community.”
The investigation was conducted by the Pasco Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Mary K. Dimke, Assistant United States Attorney for the Eastern District of Washington, and Brian Hultgrenn, a Special Assistant United States Attorney, from the Franklin County Prosecutor’s Office.
Owners and Chiropractor Indicted in Alleged Nationwide Worker’s Compensation Fraud SchemeRead the Press Release
HOUSTON – The owners and others associated with Team Work Ready (TWR) have been charged in a conspiracy involving health care fraud and money laundering, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge Max Eamiguel, U.S. Postal Service - Office of Inspector General (USPS-OIG), Southern Area Field Office, Special Agent in Charge David C. Wickersham, U.S. Department of Labor - Office of Inspector General (DOL-OIG), Office of Labor Racketeering and Fraud Investigations and Special Agent in Charge Lucy Cruz of IRS - Criminal Investigation (IRS-CI). TWR has clinics in five States including Federal Work Ready in Houston, Alamo Work Ready in San Antonio and Bayou Work Ready in New Orleans, Louisiana.
The 20-count indictment was returned June 30, 2015, and unsealed as chief financial officer Pam Rose, 53, and rehabilitation director chiropractor Hugo Jaime, 42, made their initial appearances before U.S. Magistrate Judge Frances Stacy this afternoon. CEO Jeff Rose, 52, and vice president of operations Frankie Sanders, 53, are expected to turn themselves in to authorities tomorrow and to make their initial appearances before Judge Stacy. All of the defendants reside in Houston.
“Today’s arrests should send a clear message to all health care providers that workers’ compensation fraud is a federal crime that carries serious consequences and will not be tolerated,” said Eamiguel. “The USPS-OIG, along with our law enforcement partners, will continue to aggressively investigate those who engage in fraudulent activities intended to defraud federal benefit programs and the Postal Service.”
According to the indictment, Jeffrey Rose, Sanders and Jamie conspired to submit false and fraudulent claims for health care benefits to the Federal Employees Compensation Act, through the Department of Labor - Office of Worker’s Compensation (OWCP). The defendants allegedly submitted claims for one-on-one physical therapy when patients were playing a Nintendo Wii™ game, sitting in an electronic massage chair, independently using treadmills and bicycles, playing water volley ball and watching television. The indictment further alleges the defendants received payments for sending patients to physicians, including a surgeon with unsteady hands, and providers of diagnostic services.
“The Office of Inspector General will continue to work cooperatively with our law enforcement partners to investigate these types of allegations,” said Wickersham.
The indictment alleges that between January 2011 and June 2015, TWR submitted at least $6,787,058 in false and fraudulent claims to the OWCP and received $5,656,778 as payment for the claims. Within the same indictment, it is also alleged that Jeffrey Rose and Pamela Rose conspired to conceal and disguise approximately $700,000 in payments from OWCP when federal search warrants were executed on TWR clinics in July 2013.
“The IRS will continue to focus efforts on financial investigations that involve egregious victimization of the health care system,” said Cruz.
Conspiracy to commit health care fraud, health care fraud and engaging in a monetary transaction in criminally derived property carries a possible sentence of up to 10 years in federal prison and a possible $250,000 fine. The sentence for a conviction of money laundering is up to 20 years in prison and a fine of either $500,000 or twice the value of the property involved in the money laundering.
This case was the result of a joint investigation with USPS-OIG, DOL-OIG, IRS-CI, Department of Veterans Affairs – OIG and Department of Homeland Security - Office of Inspector General. Assistant United States Attorney Julie Redlinger is prosecuting the case.
Ohio woman charged with making false statement to FDICRead the Press Release
A criminal information was filed charging Sharon E. Piper, 55, of Columbus Grove, Ohio, with making a materially false statement relating to a matter within the jurisdiction of the Federal Deposit Insurance Corporation, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Piper worked as the head teller for the Union Bank Company at its Columbus Grove branch. In 2010, she falsely stated the vault at the bank was in balance when she knew it was missing $145,000 in currency, according to the information.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Federal Bureau of Investigation, Lima, Ohio. The case is being handled by Assistant United States Attorney Gene Crawford.
An information is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Ohio Insurance Salesman Indicted for Tax Evasion Spanning More than 10 YearsRead the Press Release
A Parma, Ohio, resident was indicted by a grand jury sitting in Cleveland in the Northern District of Ohio for one count of tax evasion of payment for conduct spanning from 2001 through 2015, and five counts of failure to file federal income tax returns for tax years 2008 through 2012, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.
According to the allegations in the indictment, John Christopher Raschella worked as an insurance salesman, and also had a degree in accounting and had previously worked as a tax return preparer. From 1989 through 2012, Raschella earned substantial income and failed to file timely federal income tax returns with the Internal Revenue Service (IRS) to report his insurance commissions as an independent contractor and other income that he earned in those years. Even after Raschella received notices from the IRS indicating that he owed taxes, he failed to pay the amounts due. From 1989 through 1991, 1993 through 1999, and 2001 through 2010, Raschella also delinquently filed tax returns on which he reported that he owed income taxes. However, even in the 1992, 2000, 2011 and 2012 tax years, Raschella failed to pay all of the taxes due and owing, and the delinquent tax returns for some of those years contained false statements about Raschella’s home address, marital status, gross receipts and business expenses.
The indictment further alleges that beginning in or around 2001, the IRS attempted to collect Raschella’s unpaid taxes by levying his bank accounts and insurance commissions. In response to these actions, Raschella took steps to obstruct the IRS’ collection efforts. He attempted to assign his insurance commissions to third parties, including nominee corporations that he established in Nevada and Utah. He also directed that his insurance commissions be deposited into the bank account of his girlfriend, and leased and purchased three luxury vehicles that he registered in nominee names. In or around 2010, Raschella caused an individual in the state of Texas to submit a fraudulent IRS Form for Release of Levy/Release of Property from Levy, to the company for which Raschella sold insurance in an effort to reduce the amount of money that the insurance company paid over to the IRS pursuant to a levy.
If convicted, Raschella faces a statutory maximum sentence of five years in prison and a $250,000 fine for the tax evasion count, and a statutory maximum sentence of one year in prison and a $100,000 fine for each count of failure to file tax returns.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated this case, and Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan of the Tax Division, who are prosecuting this case. Ciraolo also thanked the U.S. Attorney’s Office of the Northern District of Ohio for providing substantial assistance.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
New Orleans Woman Sentenced for Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that SYLVIA CHESTNUT, age 37, of New Orleans, was sentenced today after pleading guilty to a one-count Bill of Information charging her with stealing property from a Navy Exchange Store in Florida.
U.S. District Judge Lance M. Africk sentenced CHESTNUT to sixty days imprisonment, followed by three years of supervised release. Additionally, CHESTNUT was ordered to pay full restitution to the Navy Exchange.
According to court documents, between November 12, 2011 and December 18, 2011, CHESTNUT wrote 43 worthless checks totaling $20,549.36 to two Naval Exchange Stores located at the Naval Air Station in Jacksonville, Florida, and Naval Station Mayport, Florida. CHESTNUT used the worthless checks to purchase clothing, household items, pre-paid Visa cards, and other personal items.
U.S. Attorney Polite praised the work of the Naval Criminal Investigative Service (NCIS), in investigating this matter. Assistant U. S. Attorney Spiro G. Latsis and Assistant U.S. Attorney Kevin Frein of the United States Attorney’s Office for the Middle District of Florida were in charge of the prosecution.
Multi-state cargo theft ring busted in Southern IndianaRead the Press Release
New Albany – United States Attorney Josh J. Minkler announced the unsealing of a twenty-three count indictment charging eight individuals in an organized scheme to steal tens of millions of dollars in merchandise from shipments of cargo moving through the state of Indiana and elsewhere.
“Interfering with interstate commerce is a crime that affects us all through higher consumer prices and the disruption of product supply to retail outlets,” said Minkler. “Those who choose to engage in this type of theft will be held strictly accountable.”
This indictment is the culmination of a joint, multi-year investigation involving the Federal Bureau of Investigation, Kentucky State Police, Louisville (KY) Metropolitan Police Department, Wythe County (VA) Sheriff’s Department, Indiana State Police, Illinois State Police, Virginia State Police, Georgia Bureau of Investigation, Fayette County (OH) Sheriff’s Department, Oklahoma City (OK) Police Department, and the Tennessee Highway Patrol, among others. Two private entities, CargoNet and the National Insurance Crime Bureau, also significantly assisted in the investigation.
As alleged in the indictment, between August of 2012 and May of 2015,
CARLOS ENRIQUE FREIRE-PIFFERRER, 36, Louisville,
JUAN PEREZ-GONZALEZ, 41, Louisville,
EDUARDO HERNANDEZ, 52, Miami,
MARIO HERNANDEZ-OQUENDO, 37, Miami,
YOEL PALENZUELA-MENDEZ, 40, Miami,
ORLIS MACHADO-CANTILLO, 44, Louisville,
MIGUEL MOMPIE, 47, Louisville,
RITZY ROBERT-MONTANER, 25, Louisville,
conspired to and stole millions of dollars in cargo being transported in interstate commerce by semi-tractor trailers. The group would then transport the stolen merchandise to locations in Kentucky, New Jersey, Florida, and elsewhere, and sell the stolen merchandise for financial gain.
In carrying out the wide-ranging scheme, it is alleged that the defendants and their co-conspirators traveled from various locations throughout the United States to Virginia, Illinois, Indiana, Kentucky, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, and other states to steal products that were being shipped in interstate commerce. Specifically, it is alleged that the defendants surveyed distribution facilities used by various national companies to ship their products. The defendants would then locate and follow semi-tractor trailers leaving the distribution facilities until the driver of the cargo load would stop to rest or refuel his/her truck. The defendants would then act in concert to steal the entire semi-tractor and trailer loaded with merchandise.
In many cases, the defendants would abandon the stolen tractor a short distance away after attaching the stolen trailer to a tractor owned/operated by one of the members of the theft group. Many times the defendants would quickly paint over any logos on the stolen trailer in an effort to conceal the identity of the trailer and evade law enforcement detection.
According to the indictment, on 11 separate occasions this group stole cargo loads traveling within the Southern District of Indiana and/or used interstate highways within the district to transport the stolen merchandise to other states. Stolen cargo shipments are alleged to have included computers and computer equipment, cellular telephones, electronics, appliances, perfume, cosmetics, clothing, baby formula, and tires. The value of merchandise stolen from or unlawfully transported through Indiana alone is alleged to exceed $17.5 million.
“This case not only emphasizes the cooperation between federal, state and local law enforcement agencies to investigate and prosecute those who engage in this type of crime, but also reveals the damaging effects of such crimes on our community which will not be tolerated,” said Special Agent in Charge of the Indianapolis FBI, W. Jay Abbott.
According to Assistant United States Attorney Matthew J. Rinka, who is prosecuting this case for the government, Ritzy Robert-Montaner, Mario Hernandez-Oquendo, and Eduardo Hernandez have been arraigned on the charges in New Albany before U.S. Magistrate Judge Van T. Willis. The remaining defendants will be arraigned at a later date.
The defendants face sentences of up to 10 years imprisonment for each count of possession or transportation of stolen goods in interstate commerce, and up to five years on the conspiracy charge. The defendants also face up to three years of supervised release following any term of imprisonment.
An Indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Missouri City Woman Admits to Stealing More Than $1 Million from Former EmployerRead the Press Release
HOUSTON - Michelle Robyn Freytag, 47, of Missouri City, has pleaded guilty to defrauding her former employer - a Houston businessman - of more than $1.3 million, announced U.S. Attorney Kenneth Magidson.
Freytag was hired in April 2009 to be her employer’s executive assistant. As part of her guilty plea today, she has admitted that as early as August 2009, she began misusing her position and her access to his credit card and banking information. She arranged for credit cards to be assigned in her name but under her employer’s various accounts at Whitney National Bank. As the executive assistant, Freytag was able to arrange for her personal expenditures to be satisfied with monies from bank accounts assigned to her employer or his other companies.
Over the next four years, Freytag repeated this process and obtained, without authorization from her employer, at least four additional Whitney Bank credit cards in his name, his spouse’s name and in the name of two of his other companies. Freytag obtained these credit cards by falsely representing to Whitney Bank that her employer had authorized the issuance of these cards or by falsely representing that certain previously issued credit cards had allegedly been lost and that replacements were requested by her employer or his spouse. Freytag used these credit cards to take cash advances and to make personal expenditures. She would then cause these cash advances and personal expenditures to be satisfied with monies from bank accounts assigned to her employer or his other businesses.
According to the plea agreement, Freytag’s unauthorized cash advances and personal expenditures between August 2009 and January 2014, when her scheme was discovered, totaled approximately $1.3 million.
U.S. District Judge Keith P. Ellison accepted the guilty plea on one count of wire fraud today and has set sentencing for Sept. 29, 2015. At that time, Freytag faces up to 20 years in federal prison and a possible $250,000 maximum fine.
The investigation was conducted by the FBI. Assistant U.S. Attorney Jason Varnado is prosecuting the case.
Methamphetamine and Heroin Traffickers Ordered to PrisonRead the Press Release
LAREDO, Texas – A total of four drug traffickers have been sentenced for their convictions related to a drug trafficking conspiracy involving methamphetamine and heroin, announced U.S. Attorney Kenneth Magidson.
Santos Arturo Ortiz, 28, Armando Bautista Jr., 30, Kenneth John Swisher, 56, and Alan Salinas, 28, all of Laredo, all previously pleaded guilty for their criminal conduct as did Juan Uxmal Villegas, 36, of San Antonio.
Today, U.S. District Judge Marina Garcia Marmolejo handed Ortiz a sentence of 168 months in federal prison to be followed by five years of supervised release. Bautista and Salinas were also sentenced today to respective sentences of 120 and 124 months imprisonment and five years of supervised release. Swisher was sentenced earlier this week to a 120-month-term of imprisonment for his role in the conspiracy. Villegas will be sentenced Monday, July 13, 2015.
At the hearing, one of the defendants stated that “it was easy money.” In response, Judge Marmolejo noted “I hope that you come to the point in your life that you never consider transporting narcotics easy money.”
Ortiz would receive methamphetamine and heroin from an employee at a downtown Laredo fast food restaurant. The drugs would then be transported by co-conspirators to San Antonio where Villegas would distribute the narcotics in the local area.
Swisher was permitted to remain on bond, while the remaining defendants are in custody.
The case was investigated by the Drug Enforcement Administration. Assistant U.S. Attorney (AUSA) Christopher S. Coker and former AUSA Elizabeth Rabe prosecuted the case.
Manhattan U.S. Attorney Recovers $360,000 in Civil Penalties from A Rochester Pharmaceutical Company That Violated the Controlled Substances ActRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, the Special Agent-in-Charge of the New York Field Division of the U.S. Drug Enforcement Administration (“DEA”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced today that the United States has filed and settled a civil lawsuit against ROCHESTER DRUG COOPERATIVE, INC., (“RDC”), a Rochester, New York, pharmaceutical distributor of controlled substances. Under the settlement, RDC admitted and accepted responsibility for numerous violations of the Controlled Substances Act (the “CSA” or the “Act”), and agreed to pay $360,000 in penalties and to re-submit to DEA corrected record-keeping reports required by the CSA. The settlement agreement, in the form of a consent order, was approved today in Manhattan federal court by United States District Judge Ronnie Abrams.
Manhattan U.S. Attorney Preet Bharara stated: “Pharmaceutical distributors are supposed to be one of the first lines of defense in the growing oxycodone epidemic. Today’s consent order demonstrates that distributors that do not properly track and report the purchase and sale of drugs with a high potential for abuse will be held accountable.”
DEA Special Agent-in-Charge James J. Hunt said: “The Controlled Substances Act is the cornerstone of preventing prescription drug diversion and drug abuse. Today’s announcement has a dual purpose; to remind pharmaceutical distributors of their reporting requirements, and to reiterate law enforcement’s ongoing efforts to curtail opioid abuse throughout our nation.”
Commissioner William J. Bratton said: “The law mandates that pharmaceutical companies track their distribution of controlled substances, allowing law enforcement to investigate and stop the exploitation of highly addictive prescription drugs, especially those which have led to numerous opioid addictions and overdose deaths. The NYPD, along with our law enforcement partners, remain committed to stopping the distribution of illegal narcotics.”
According to the Complaint filed in federal court: The CSA creates a comprehensive distribution and monitoring system for those authorized to handle controlled substances, at the heart of which are registration and tracking requirements. The DEA tracks the commercial distribution of substances with a high potential for abuse through its Automation of Reports and Consolidated Orders System, or “ARCOS.” The Complaint alleges that, following an audit of various pharmacies in the New York City area, the DEA discovered that the pharmacies had reported thousands of purchase orders from RDC that RDC did not correspondingly report to the DEA through ARCOS. In response, in 2013, the DEA’s New York Field Division Tactical Diversion Squad conducted an on-site investigation and audit at RDC’s headquarters in Rochester, New York. The DEA’s audit confirmed that RDC’s ARCOS reporting system was underreporting many thousands of drug sales to pharmacies throughout the northeast region.
RDC responded that it expected to be able to resolve this issue through the pending acquisition of a new computer ordering system. But in 2014, DEA re-assessed RDC’s compliance, and discovered that RDC had not implemented the new order system. As a result, RDC’s failure to electronically report thousands of shipments of CSA-controlled substances, including Oxycodone and its variants, continued. During this time, the DEA also determined that RDC had failed to report the theft or significant loss of controlled substances in ARCOS, as required by the CSA and its implementing regulations.
In the settlement agreement, RDC admitted that between July 2013 and July 2014, it failed to report any electronic distribution transactions in its DEA ARCOS reports, and admitted that between July 2012 and July 2014, it failed to provide the required theft or significant loss reporting in ARCOS to the DEA. Under the Consent Order, RDC must pay $360,000 in civil penalties to the United States and reconstruct complete and correct historical ARCOS data for the last five years for submission to the DEA.
Mr. Bharara praised the DEA New York Division Tactical Diversion Squad for their invaluable work on this case. The DEA Tactical Diversion Squad comprises agents, investigators, and officers from the DEA, the New York City Police Department, the Orangetown Police Department, and the Westchester County Police Department.
The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorney Louis A. Pellegrino is in charge of the case.
Man Sentenced to 78 months for Possessing, Sharing Child PornographyRead the Press Release
Memphis, TN – A 24-year-old man in Halls, Tennessee has been sentenced to 78 months in prison for possessing and distributing child pornography.
According to a federal indictment, on August 30, 2012, Lindell "Logan" Luck intentionally distributed computer images and video files of minors engaging in sexually explicit conduct. Luck downloaded and shared the images using his ASUS Notebook computer.
According to statements made in court, Memphis Child Exploitation Task Force agents signed into a peer-to-peer file sharing network to identify potential program users who may have been in possession of or sharing child pornography. This file sharing network enabled users to exchange digital music, images, and videos directly without going through central servers. A program user could search for files made available by all other users, browse all files made available by a particular user, and download desired files.
While using the network, agents performed a "browse request" and received a response from an IP address associated with a computer later determined to be at Luck’s residence in Halls, Tennessee, according to court statements. Law enforcement officials discovered that the computer contained multiple files depicting minor children engaged in sexually explicit conduct.
On October 24, 2012, police officers executed a search warrant and seized Luck’s computer. A forensic examination revealed that the device contained visual depictions of minors under the age of 12 engaging in sexually explicit conduct as well as other child pornographic files.
Luck was charged with one count of distribution of child pornography and two counts of possession of child pornography. This week, he was sentenced to 78 months imprisonment and five years of supervised release by Judge Samuel H. Mays.
The case was investigated by the Department of Homeland Security and the Federal Bureau of Investigation. Both agencies are members of the Memphis Child Exploitation Task Force. Assistant U.S. Attorney Leetra Harris prosecuted the case on the government’s behalf.
Little Rock Man Arrested in Ongoing Scheme to Steal Feeding Program FundsRead the Press Release
LITTLE ROCK – Another feeding program sponsor has been indicted for his role in a scheme to steal federal money. Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced that Michael R. Lee, age 24, of Little Rock, was arrested Wednesday following the filing of a 20-count indictment.
The indictment, returned by a Federal Grand Jury on July 7, 2015, charges Lee with 20 counts of wire fraud as part of a scheme to fraudulently obtain United States Department of Agriculture (USDA) program funds. Lee appeared Thursday, July 9, 2015, before United States Magistrate Judge J. Thomas Ray and was released on bond.
According to the indictment, the USDA funds the Child and Adult Care Feeding Program, which includes an at-risk after school component. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. Once approved, they can provide meals as part of the feeding program and be reimbursed based on the number of eligible meals they serve.
The indictment states that Lee operated as a sponsor for a feeding program through an organization called Our Children of Tomorrow. It alleges that a relative of Lee worked for DHS and processed applications from sponsors applying to participate in the feeding programs.
Lee applied with DHS to participate as a sponsor and then had his relative at DHS approved his applications. The indictment states that Lee falsely represented his average daily attendance and greatly inflated the number of meals provided. At one location, he reported attendance ranging from 115 to 450 children, when no more than 25-30 children 425 West Capitol Avenue, Suite 500 (501) 340-2600 Post Office Box 1229 Little Rock, Arkansas 72203-1229 were ever seen there. At another location, Lee reported between 76 to 350 children, but no children were seen at that feeding site.
The statutory penalty for wire fraud is not more than 20 years’ imprisonment, not more than a $250,000 fine, or both, and not more than three years’ supervised release.
The investigation is ongoing and is conducted by the United States Secret Service, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigations, United States Department of Agriculture—Office of Inspector General, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris and Allison W. Bragg.
If you are aware of any fraudulent activity regarding these feeding programs, please e-mail that information to the U.S. Attorney’s office at [email protected].”
An indictment contains only allegations. Defendants are presumed innocent until proven guilty.
Large-Scale Multi-State Methamphetamine Organization Members Plead Guilty to ConspiracyRead the Press Release
BOISE – Maribel Betancourt, 41, of Meridian, Idaho, pleaded guilty yesterday to conspiracy to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced. Betancourt is scheduled to be sentenced before Chief U.S. District Judge B. Lynn Winmill on September 29, 2015. Conspiracy to distribute methamphetamine is punishable by up to 20 years imprisonment, a $1,000,000 fine, and at least three years of supervised release. Betancourt has also agreed to forfeit $2,000 in cash proceeds.
Betancourt and thirteen co-defendants were charged on February 10, 2015, in a ten count indictment alleging conspiracy to distribute methamphetamine, distributing methamphetamine, possession with intent to distribute methamphetamine, and possession of a firearm in furtherance of a drug trafficking crime. According to court documents, the conspiracy was responsible for bringing over 4.5 kilograms of high purity methamphetamine from California to Idaho from August 2014, to January 2015.
Co-defendants Jose Luis Corrales Cruz, 58, of Ramona, California; Juan Navarrete, 19, of Ontario, Oregon; and Jorge Sandoval, 21, of Placentia, California, pleaded guilty in June to conspiracy to distribute more than 500 grams of methamphetamine and agreed to forfeit $100,000 in cash proceeds. Conspiracy to distribute more than 500 grams of methamphetamine is punishable by at least 10 years in prison and not more than life, a $10,000,000 fine, and at least five years of supervised release. Ruby Martinez, 41, of Nampa, Idaho; Marco Antonio Tinoco, 26, of Ontario, Oregon; and Hernan Arteaga-Solchaga, 23, of Nampa, Idaho, pleaded guilty earlier this month to conspiracy to distribute methamphetamine. Martinez and Arteaga-Solchaga agreed to forfeit $2,500 in cash proceeds, while Tinoco agreed to forfeit $4,500. The six of the above defendants are set for sentencing in September 2015.
Oscar Adan Jaimez-Munoz, 35, of Placentia, California; Ruben Rangel Perez, 34, of Placentia, California; Rafael Sotero Lopez-Vasquez, 43, of Nampa, Idaho; and Andres Navarrette, Jr., 26, of Ontario, Oregon, have change of plea hearings later this month. Carmen J. Gomez-Rangel, 49, of Nampa, Idaho, remains a fugitive.
Francisco Sandoval, 60, of Placentia, California, and Horacio Linares, 47, of Anaheim, California, are currently set for trial on November 16, 2015, before Judge Winmill.
This case was investigated by the Drug Enforcement Administration, the Ada County Sheriff’s Office, the Boise Police Department, the Meridian Police Department and the Nampa Police Department, as well as the Organized Crime and Drug Enforcement Task Force (OCDETF), which includes the cooperative law enforcement efforts of the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.