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Wednesday 20 May 2015
Muldrow Man Sentenced to 180 Months for Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that TERRY WAYNE HYATT, age 34, of Muldrow, Oklahoma, was sentenced to 180 months imprisonment, followed by 3 years of supervised release for Felon in Possession of a Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(e)(l).
The charge arose from an investigation by the Muldrow Police Department. The defendant was indicted in November, 2014 and pled guilty in December, 2014.
The Indictment alleged that on or about February 13, 2014, within the Eastern District of Oklahoma, the defendant, TERRY WAYNE HYATT, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm, which had been shipped and transported in interstate commerce.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Melody Nelson represented the United States.
Moro Man Pleads Guilty to Role in Staged Bank RobberyRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Eugene Babcock, 58, of Moro, IL, pled guilty today in the United States District Court for the Southern District of Illinois to charges stemming from a staged bank robbery at Liberty Bank in Bethalto, Illinois, that occurred on December 13, 2014. Sentencing is scheduled for September 15, 2015, at 9 a.m.
At sentencing, Babcock faces a term of imprisonment of not more than ten years, a fine of up to $250,000, and a term of supervised release of not more than three years.
Facts revealed in open Court today indicated that the bank’s manager had engaged Babcock to assist him with a "staged" bank robbery, which the manager then reported, in order for the two of them to share in funds stolen from the bank. When confronted by the police, Babcock returned over $100,000 taken from the fake bank robbery to investigators.
The case is being investigated by the Federal Bureau of Investigations and the Bethalto Police Department. The case is assigned to Assistant United States Attorney Laura Reppert.
Minneapolis Police Officer Indicted for Criminal Civil Rights Violations for Off-Duty Use of Excessive ForceRead the Press Release
United States Attorney for the District of Minnesota Andrew M. Luger today announced an indictment charging MICHAEL LEWIS GRIFFIN, 40, a Minneapolis police officer, with assaulting at least four people while off-duty and after first identifying himself as a police officer, in violation of the Fourth Amendment to the United States Constitution which protects against the unreasonable use of physical force by law enforcement officers.
The defendant is also charged with lying on official police reports, in civil depositions and at trial. GRIFFIN is expected to appear on May 21, 2015, before Magistrate Judge Mayeron in U.S. District Court in Minneapolis, Minn.
"Police officers cannot use their shield as a weapon against innocent civilians," said U.S. Attorney Luger. "This defendant is charged with assaulting at least four people in his capacity as an off-duty officer, filing false paperwork and lying multiple times while under oath. Minneapolis is well served by the many hard-working and honest officers of the Minneapolis Police Department and I am proud of the close working relationship between the Department and my Office to address violent crime in the city. At the same time, we will not stand for those who abuse their badge and the public’s trust."
"The FBI will vigorously investigate allegations of corruption of public servants," said Special Agent in Charge of the FBI Minneapolis Division Richard T. Thornton. "No quarter will be given to those who would violate the public trust."
According to the indictment and documents filed in court, on May 29, 2010, GRIFFIN was with a friend outside of the Aqua Nightclub and Lounge (Aqua) on First Avenue in downtown Minneapolis. The defendant was off-duty and in plain clothes. GRIFFIN’s friend began arguing with a third person, I.R. The defendant displayed his badge and identified himself to I.R. as a police officer, at which point I.R. tried to walk to the Envy Nightclub about half a block away. GRIFFIN followed I.R. to the Envy Nightclub and punched him in the face until he was unconscious.
According to the indictment and documents filed in court, immediately after GRIFFIN knocked I.R. unconscious, GRIFFIN approached two on-duty Minneapolis police officers standing nearby, identified himself as a police officer, and directed them to arrest I.R. GRIFFIN later wrote a police report falsely indicating that I.R. tried to attack GRIFFIN and that GRIFFIN only punched I.R. after attempting to sweep his legs out from under him. I.R., who suffered lacerations to his lip and head, was charged subsequently with assaulting a police officer. The Minneapolis City Attorney’s Office later dismissed the charge against I.R.
According to the indictment and documents filed in court, in a separate incident on November 5, 2011, GRIFFIN verbally confronted four men at The Loop bar on Washington Avenue North in Minneapolis. GRIFFIN, who was off-duty at the time, threatened to have the men thrown out of the bar. The defendant approached the bouncer, identified himself as a police officer, displayed his badge, and directed the bouncer to throw the four men out of the bar. The bouncer complied with GRIFFIN’s command and told the men to leave.
According to the indictment and documents filed in court, GRIFFIN said he was going to call "his boys" and then followed the men out of the bar. GRIFFIN contacted his partner, Officer W.G., who was working nearby off-duty but in uniform. Officer W.G. arrived at the scene moments later in a squad car and took one of the men, M.M., into custody. As M.M. was being taken into custody, another victim, K.C., questioned where Officer W.G. was taking M.M. In response GRIFFIN grabbed K.C. from behind and threw him to the ground. After both K.C. and M.M. were in Officer W.G.’s squad car, the defendant stood outside the squad car yelling at both men.
According to the indictment and documents filed in court, GRIFFIN ordered M.M. to get out of the squad car and walk toward a loading dock area. There, GRIFFIN kicked M.M. in the chest and knocked him to the ground. Another of the men, J.A., observed the assault from a nearby taxi and approached M.M. GRIFFIN responded by punching J.A. in the head from behind, knocking him unconscious. GRIFFIN then kicked J.A. in the head. M.M. ran to seek help from Officer W.G. and also called 911 to request a "real" cop. Officer W.G. also summoned dispatch for an ambulance and a supervisor. J.A. was taken to the hospital and treated for multiple lacerations on his face and neck.
According to the indictment and documents filed in court, when additional Minneapolis police officers arrived at the scene, GRIFFIN made a false police report that resulted in M.M. being arrested for obstructing a police officer with force. The charges against M.M. were later dismissed by the Minneapolis City Attorney’s Office.
According to the indictment and documents filed in court, the defendant also indicated that J.A. instigated the original confrontation by violently pushing GRIFFIN from behind and that all four men surrounded GRIFFIN on the dance floor and threatened to "kick his ass." GRIFFIN also falsely reported that a bouncer warned him not to go outside of the bar because the men were waiting for him.
According to the indictment and documents filed in court, I.R. and the victims from the November 2011 incident filed civil law suits against GRIFFIN alleging excessive use of force. GRIFFIN lied in civil depositions taken in connection with both law suits. He testified at trial in the case related to the incident at The Loop bar and again lied under oath.
This case is the result of an investigation conducted by the Federal Bureau of Investigation.
This case is being prosecuted by Assistant United States Attorneys Steven L. Schleicher and Manda M. Sertich.
Defendant Information:
MICHAEL LEWIS GRIFFIN, 40
Plymouth, Minn.
Charges:
• Deprivation of rights under color of law, 4 counts
• Destruction, alteration, or falsification of records in Federal investigations, 2 counts
• Perjury at civil deposition, 2 counts
• Perjury at civil trial, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Middleburg Heights man charged with extortion and making threatsRead the Press Release
A federal grand jury returned a two-count indictment charging David Z. Zehnder, 45, of Middleburg Heights, with extortion and use of an electronic communication to threaten harm to a victim known to the grand jury, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that Zehnder extorted and attempted to extort money from the victim by threat of violence.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal records, 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 investigation preceding the indictment was conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Linda H. Barr.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Mesquite Man Sentenced to 25 Years in Federal Prison for Producing Child PornographyRead the Press Release
DALLAS — A 20-year-old Mesquite, Texas, man, Jeremiah Chayse Gardiner, was sentenced today by Chief U.S. District Judge Jorge A. Solis to 25 years in federal prison following his guilty plea in October 2014 to one count of production of child pornography, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
According to plea documents filed in the case, an investigation into cybertips received on April 8, 2014, led a detective with the Mesquite Police Department to determine that Gardiner uploaded images of child pornography to a social networking application called Tumblr. On April 17, 2014, detectives with the Mesquite Police Department went to West Mesquite High School to speak with Gardiner and execute a search warrant on his cellphone.
Gardiner admitted uploading images of child pornography to Tumblr, and he further admitted inappropriately touching “Jane Doe #2,” when she was three-years- old. Based on those admissions, the detectives obtained and executed an arrest warrant and search warrant for Gardiner’s residence, and Gardiner was taken into custody.
An examination of Gardiner’s cell phone revealed several images of child pornography, taken with Gardiner’s phone, depicting “Jane Doe,” a two-year-old girl.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Mesquite Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated. Assistant U.S. Attorney Camille Sparks prosecuted.
Member of Counterfeit Credit Card Ring Sentenced to Four Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Jason Evans, age 32, of Millsboro, Delaware, today to four years in prison followed by five years of supervised release for bank fraud conspiracy and aggravated identity theft, arising from the use of stolen credit and debit cards to manufacture counterfeit credit cards used to buy merchandise and services. Judge Quarles also entered an order that Evans pay restitution of $126,318.99, the amount of the actual loss to victims.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; Chief Gary Gardner of the Howard County Police Department; Commissioner Anthony W. Batts of the Baltimore Police Department; Chief James W. Johnson of the Baltimore County Police Department; Chief Ross C. Buzzuro of the Ocean City Police Department; Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Newport News Police Chief Richard W. Myers; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, co-defendant Michael Crew had an embossing machine, and made credit cards using altered gift cards and the credit card and debit card numbers stolen from others. The stolen credit card account numbers were obtained from a variety of sources. Once a valid number was obtained, Evans and his co-conspirators would use those numbers to derive other valid numbers, which they would confirm by calling customer service for the issuing financial institution. These numbers were used to manufacture counterfeit access devices bearing the stolen credit and debit card account numbers. The counterfeit access devices were then used to make unauthorized purchases of goods and services.
In the fall of 2012, Crew’s embossing machine broke. Crew asked Evans to help him get it fixed or replaced. Ultimately, Evans, Crew and another member of the conspiracy traveled to Pittsburgh, Pennsylvania to obtain another embosser and pick up the repaired embosser. Evans kept the repaired embosser as a backup initially. He used it to make counterfeit credit cards for himself and another co-conspirator.
On March 21, 2013, a search warrant was executed at Evan’s residence. Law enforcement seized the embosser, counterfeit gift cards bearing stolen credit card numbers, computers, notes with credit card account information, and a list of credit card numbers.
During the conspiracy from March 2012 through the arrest of the final defendants on June 7, 2014, Evans and his co-conspirators accessed or attempted to access credit card accounts with credit limits of between $400,000 and $1 million, using the financial account numbers of real people. More than 250 individuals and institutions were defrauded by the scheme.
Michael Crew, age 55, of Owings Mills, Maryland, was sentenced to nine years in prison after Crew pleaded guilty to bank fraud conspiracy and aggravated identity theft. Four other defendants have pleaded guilty to their participation in the scheme and await sentencing.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Secret Service; Howard County, Baltimore City, Baltimore County, Ocean City and Newport News Police Departments, HSI Ocean City and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Tamera L. Fine, who prosecuted the case.
Medco to Pay $7.9 Million to Resolve Kickback AllegationsRead the Press Release
Medco Health Solutions Inc., a wholly-owned subsidiary of the pharmacy benefit manager Express Scripts Holding Company, of Missouri, has agreed to pay the government $7.9 million to settle allegations that it engaged in a kickback scheme in violation of the False Claims Act, the Justice Department announced today. Medco provides pharmacy benefit management services to clients who receive subsidies under the Medicare Retiree Drug Subsidy program.
“We will continue to pursue pharmacy benefit managers that enter into kickback arrangements with pharmaceutical manufacturers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Hidden financial agreements between drug manufacturers and pharmacy benefit managers can improperly influence which drugs are available to patients and the price paid for drugs.”
The settlement resolves allegations that Medco solicited remuneration from AstraZeneca, a pharmaceutical manufacturer, in exchange for identifying Nexium as the “sole and exclusive” proton pump inhibitor on certain of Medco’s prescription drug lists known as formularies. The United States alleged that Medco received some or all of the remuneration from AstraZeneca in the form of reduced prices on the following AstraZeneca drugs: Prilosec, Toprol XL and Plendil. The United States contended that this kickback arrangement between Medco and AstraZeneca violated the Federal Anti-Kickback statute, and thereby caused the submission of false or fraudulent claims for Nexium to the Retiree Drug Subsidy Program. In January 2015, the United States and AstraZeneca reached a $7.9 million settlement to resolve kickback allegations arising out of the same conduct.
“By this agreement we are making important strides in holding pharmacy benefit managers accountable not only in Delaware but nationwide,” said U.S. Attorney Charles M. Oberly III of the District of Delaware. “I am proud of the tireless work by this office to investigate this case.”
“Pharmacy benefit managers that seek or accept kickbacks will be held accountable for their improper conduct,” said Special Agent in Charge Nick DiGiulio of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG). “We will continue to crack down on kickback arrangements, which can undermine drug choices for patients and corrode the public’s trust in the health care system.”
This civil settlement resolves a lawsuit filed under the qui tam, or whistleblower, provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery. The lawsuit was filed by former AstraZeneca employees Paul DiMattia and F. Folger Tuggle, whose share of the settlement has not been determined.
The settlement with Medco was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the District of Delaware and HHS-OIG.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The False Claims Act lawsuit was filed in the U.S. District Court for the District of Delaware and is captioned United States ex rel. DiMattia et al. v. Medco Health Solutions, Inc., No. 13-1285 (D. Del.). The claims settled by this agreement are allegations only; there has been no determination of liability.
Man Sentenced for False Statements in Relation to Blowout Preventer Testing on Oil Platform in Gulf of MexicoRead the Press Release
The United States Attorney’s Office for the Eastern District of Louisiana announced that RACE ADDINGTON, 49, of Houston, was sentenced today for making false statements to agencies or departments of the United States in relation to the veracity of blowout preventer testing on an offshore oil and gas platform located at Ship Shoal 225 on a federal mineral lease in the Gulf of Mexico.
U.S. District Judge Helen G. Berrigan sentenced ADDINGTON to one year probation and 40 hours of community service.
According to court documents, on or about November 27, 2012, production and well workover operations were being conducted on the platform and the blowout preventer system had to be tested. A blowout preventer system is designed to ensure well control and prevent potential release of oil and gas and possible loss of well control. The blowout preventer pressure chart that recorded the testing of the blowout preventer testing done on November 27, only recorded 6 of the 7 required components as being tested and was not signed nor dated by any representative on the platform.
On or about November 28, 2012, ADDINGTON, as the well site supervisor for the platform saw the results of the blowout preventer testing and had workers create a false blowout preventer test. The next day when Bureau of Safety and Environmental Enforcement (BSEE) inspectors conducted a routine inspection of the platform, ADDINGTON presented the fabricated blowout preventer pressure test chart to the BSEE inspectors with the expectation that it would be a passing test and the inspectors would not find the platform to be in non-compliance for failing to properly test the blowout preventer system.
On December 6, 2012, during an investigation of the veracity of the blowout preventer test by the Department of Interior’s Investigation and Review Unit, ADDINGTON lied and told investigators the false chart he provided inspectors was a test of the chart recorder and that the inspectors mistakenly retrieved the wrong pressure chart from the files when in truth and in fact he knew that he had the blowout preventer pressure test chart fabricated and personally presented the chart to inspectors as the actual test record for the platform’s blowout preventer system.
The case was investigated by the Department of Interior-Office of Inspector General (Energy Investigations Unit) with assistance from the Investigations and Review Unit, Bureau of Safety and Environmental Enforcement and the Environmental Protection Agency-Criminal Investigation Division. The case was prosecuted by Assistant United States Attorney Emily K. Greenfield of the United States Attorney’s Office’s National Security Unit.
Man from El Salvador Sentenced to 12 Years in Prison for Child Pornography and Sexual Abuse ChargesRead the Press Release
WASHINGTON – David Alberto Canales, 47, formerly of El Salvador, was sentenced today to 12 years in prison for possession of child pornography, second-degree sexual abuse, first-degree child sexual abuse and illegal re-entry of a removed alien, announced Acting U.S. Attorney Vincent H. Cohen, Jr.; Clark E. Settles, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Washington, D.C.; and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Canales pled guilty to these charges in August 2014 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Christopher R. Cooper. Upon completion of his prison term, he will be placed on 25 years of supervised release. Canales also will be required to register for 15 years as a sex offender.
According to the government’s evidence, on Aug. 7, 2013, Special Agents for the Homeland Security Investigations arrested the defendant at an apartment in Washington, D.C. for violations of the Immigration and Nationality Act. During a search of a cellphone in Canales’s possession, agents recovered approximately eight images of child pornography. In addition, during the course of the investigation, law enforcement discovered that Canales had sexually assaulted an adult victim in Northwest Washington in July 2013 and two minor victims, ages 12 and 10 at the time of the abuse, in or about 2006 and 2008 respectively, in various locations in the District of Columbia and Maryland.
Canales was removed from the United States and deported to El Salvador in 1999 following his conviction in the Superior Court of the District of Columbia for drug offenses.
In announcing the sentence, Acting U.S. Attorney Cohen, Special Agent in Charge Settles and Chief Lanier praised the work of those who investigated the case. They also commended the efforts of Victim/Witness Specialists Elsa Resendiz and Yvonne Bryant and Assistant U.S. Attorneys Cassidy Kesler Pinegar and Ari Redbord.
MEDCO to Pay $7.9 Million to Resolve Kickback AllegationsRead the Press Release
WILMINGTON, Del. – Medco Health Solutions Inc., a wholly-owned subsidiary of the pharmacy benefit manager Express Scripts Holding Company, of Missouri, has agreed to pay the government $7.9 million to settle allegations that it engaged in a kickback scheme in violation of the False Claims Act, the Justice Department announced today. Medco provides pharmacy benefit management services to clients who receive subsidies under the Medicare Retiree Drug Subsidy program.
“We will continue to pursue pharmacy benefit managers that enter into kickback arrangements with pharmaceutical manufacturers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Hidden financial agreements between drug manufacturers and pharmacy benefit managers can improperly influence which drugs are available to patients and the price paid for drugs.”
The settlement resolves allegations that Medco solicited remuneration from AstraZeneca, a pharmaceutical manufacturer, in exchange for identifying Nexium as the “sole and exclusive” proton pump inhibitor on certain of Medco’s prescription drug lists known as formularies. The United States alleged that Medco received some or all of the remuneration from AstraZeneca in the form of reduced prices on the following AstraZeneca drugs: Prilosec, Toprol XL and Plendil. The United States contended that this kickback arrangement between Medco and AstraZeneca violated the Federal Anti-Kickback statute, and thereby caused the submission of false or fraudulent claims for Nexium to the Retiree Drug Subsidy Program. In January 2015, the United States and AstraZeneca reached a $7.9 million settlement to resolve kickback allegations arising out of the same conduct.
“By this agreement we are making important strides in holding pharmacy benefit managers accountable not only in Delaware but nationwide,” said U.S. Attorney Charles M. Oberly III of the District of Delaware. “I am proud of the tireless work by this office to investigate this case.”
“Pharmacy benefit managers that seek or accept kickbacks will be held accountable for their improper conduct,” said Special Agent in Charge Nick DiGiulio of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG). “We will continue to crack down on kickback arrangements, which can undermine drug choices for patients and corrode the public’s trust in the health care system.”
This civil settlement resolves a lawsuit filed under the qui tam, or whistleblower, provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery. The lawsuit was filed by former AstraZeneca employees Paul DiMattia and F. Folger Tuggle, whose share of the settlement has not been determined.
The settlement with Medco was the result of a coordinated effort among the Civil Division, the U.S. Attorney's Office for the District of Delaware, the HHS-OIG, the U.S. Postal Service's Office of Inspector General and the FBI Wilmington, Delaware, Resident Agency Office and the FBI's Major Provider Response Team.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The False Claims Act lawsuit was filed in the U.S. District Court for the District of Delaware and is captioned United States ex rel. DiMattia et al. v. Medco Health Solutions, Inc.,No. 13-1285 (D. Del.). The claims settled by this agreement are allegations only; there has been no determination of liability.
Lebanon Man Indicted for Drug Trafficking and Firearms OffensesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Lebanon man was indicted by a federal grand jury and arrested today for distribution of synthetic marijuana, possession of a stolen firearm and possession of body armor.
According to United States Attorney Peter Smith, the Indictment alleges that Angel M. Pagan, age 41, distributed XLR11, a Schedule I controlled substance (synthetic marijuana) out of his residence in Lebanon, Pennsylvania. A search of the residence located synthetic marijuana, body armor and a stolen AK-47 rifle.
This case was investigated by the Lebanon County Drug Task Force, the Lebanon City Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant U.S. Attorney Daryl Bloom is prosecuting the case.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Lebanon County Couple Indicted Federally for Distribution of CocaineRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Lebanon County couple have been indicted by a federal grand jury in Harrisburg and arrested for possession of cocaine and criminal conspiracy.
According to United States Attorney Peter Smith, the Indictment charges that Ray Leonard, age 40, of Jonestown and Saleam Moeun, age 30, of Lebanon City, distributed and conspired to distribute more than 500 grams of cocaine in Lebanon County, between January and April 2015.
The charges stem from a joint investigation by the Drug Enforcement Administration and the Pennsylvania Office of Attorney General. The case is being prosecuted by Special Assistant United States Attorney Robert Smulktis.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is for Leonard and Moeun is 80 years of imprisonment, a term of supervised release following imprisonment, and a $ 50 million 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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Las Cruces Man Pleads Guilty to Federal Methamphetamine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Mario A. Oros, 32, of Las Cruces, N.M., pleaded guilty today in federal court in Las Cruces to methamphetamine trafficking charges.
Oros was arrested on Feb. 20, 2015, on an indictment charging him with distributing methamphetamine on Sept. 5, 2014 and Sept. 12, 2014, in Doña Ana County, N.M. The indictment also calls for Oros to forfeit $3,000.00, representing the amount of money he derived from the drug trafficking offenses.
During today’s proceedings, Oros pled guilty to a felony information charging him with two counts of distributing methamphetamine. Oros admitted that on Sept. 5, 2014, he sold approximately 28 grams of methamphetamine to an undercover law enforcement agent for $1,000.00. He also admitted selling approximately 54 grams of methamphetamine to an undercover law enforcement agent for $2,000.00on Sept. 12, 2014. Oros admitted committing these offenses in Mesilla Park, N.M.
At sentencing, Oros faces a statutory maximum penalty of 20 years in prison followed by not less than three years of supervised release. He will also be required forfeit $3,000.00. Oros remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the FBI and the HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force, and is being prosecuted by Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office.
The HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force is comprised of officers from the Las Cruces Police Department, the Doña Ana County Sheriff’s Office, the FBI, HSI and the New Mexico State Police. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Laredo Man Sentenced for Possessing Firearms and 200+ Rounds of AmmunitionRead the Press Release
LAREDO, Texas – Pedro Rodriguez III, 25, of Laredo, has been ordered to federal prison for his conviction of felon in possession of a firearm, announced United States Attorney Kenneth Magidson. Rodriguez pleaded guilty Dec. 10, 2014.
Today, U.S. District Judge Diana Saldana handed Rodriguez a sentence of 60 months in federal prison to be immediately followed by three years of supervised release. He was further ordered to serve 50 hours of community service. At the hearing, an agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) testified that Rodriguez had firearms and ammunition scattered throughout his residence, including near his infant children. When imposing the sentence, Judge Saldana noted that Rodriguez was a danger to society and that prison would help with his rehabilitation.
On Oct. 2, 2014, agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrived at a residence on Springfield Avenue in Laredo. As they approached, Rodriguez fled the scene in his vehicle. After an exhaustive police chase, he was eventually apprehended by the Laredo Police Department (LPD).
At the time of the search, agents discovered a .45 caliber Colt semi-automatic pistol, a 9 mm Beretta semi-automatic pistol (loaded with six rounds of ammunition), 100 rounds of .22 caliber ammunition, 118 rounds of 9mm ammunition, 45 rounds of .45 caliber ammunition, a magazine assist speed loaded, two firearm holsters, a Winchester firearms cleaning kit, 71 rounds of ammunition of various manufacturers and calibers, one high-capacity magazine loaded with 27 rounds of 9mm ammunition, one magazine loaded with 10 rounds of 9mm ammunition, one camouflage ski mask and various cell phones.
He admitted responsibility for all the firearms and ammunitions in the Springfield Avenue residence. Rodriguez has a prior felony conviction for possession of controlled substances and is, therefore, prohibited from possessing such items.
Previously convicted for possession of a controlled substance, he is prohibited by federal law of possessing firearms or ammunition.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by ATF and LPD. Assistant U.S. Attorney Sanjeev Bhasker is prosecuting.
Lakewood man indicted on child pornography chargesRead the Press Release
Daniel J. Quellos, Jr., 39, of Lakewood, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that from on or about January 9, 2015, through on or about April 3, 2015, Quellos knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct. The indictment also charges that on April 24, 2015, Quellos possessed a computer, an external hard drive, a USB storage device, numerous compact disks, and numerous printed pages, all that contained child pornography.
If convicted, the sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique 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.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Ohio Internet Crimes Against Children Task Force and the United States Secret Service.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Lake City Man Indicted for Manufacturing and Passing Counterfeit Federal Reserve NotesRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging James Steven Hall (47, Lake City) with manufacturing and passing counterfeit currency. If convicted on all counts, he faces a maximum penalty of 40 years in federal prison. Hall was arraigned on May 19, 2015, and released on bond. He is scheduled for trial during the July 2015 trial term.
According to the indictment, Hall began manufacturing and passing counterfeit currency beginning at least in February 2015 through March 2015, in Columbia County, Florida.
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Columbia County Sheriff’s Office and the United States Secret Service. It will be prosecuted by Assistant United States Attorney Kevin C. Frein.
Justice Department Honors Law Enforcement Officers, School Administrator in Missing Children's Day CeremonyRead the Press Release
Attorney General Loretta E. Lynch presided over the Justice Department’s Missing Children’s Day ceremony on Wednesday, May 20, 2015, at 2 p.m. The event honored three law enforcement officers and an assistant principal for their efforts to recover missing children, rescue children from abuse and prosecute sexual predators.
“This Department of Justice will never pause; will never rest; and will never cease in our effort to protect this country’s young people," said Attorney General Lynch. "We will do everything we can to find children who have gone missing, to reunite them with their loved ones, and to stand beside them and their families as they do the hard work necessary to recover their lives and restore their futures. And we will continue to expand and advance this work together."
Speakers included Assistant Attorney General for the Office of Justice Programs Karol V. Mason, Office of Juvenile Justice and Delinquency Prevention (OJJDP) Administrator Robert L. Listenbee, and an abduction survivor and child advocate Carlina White. More than 250 people attended the annual ceremony, including families of missing children, law enforcement officers, advocates, and others who support programs to recover missing and exploited children.
During the ceremony, the department recognized efforts to protect children and presented the following awards:
The Attorney General’s Special Commendation recognizes an Internet Crimes Against Children (ICAC) task force or affiliate agency for significant investigative contributions. Recipient: Special Agent William Thompson, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, for identifying 28 child victims in 10 states who were manipulated into sharing sexually explicit images of themselves.
The Missing Children’s Law Enforcement Award recognizes a law enforcement officer who made a significant investigative contribution to the safety of children. Recipient: Cpl. Christopher Heid, Child Recovery Unit, Maryland State Police, for investigating 109 missing children cases and recovering 99 children, as well as participating in 227 human trafficking investigations, and developing an anti-trafficking training program that has educated more than 550 law enforcement officers and victim advocates.
The OJJDP Administrator Missing Children’s Citizen Award honors private citizens for their unselfish acts to safely recover missing or abducted children. Recipient: Assistant Principal Jenee’ Littrell, Chaparral High School, El Cajon, California, for supporting an investigation by local law enforcement and the U.S. Departments of Justice and Homeland Security that led to the arrest of 22 people who had recruited nearly 100 middle and high school girls for a gang-related prostitution ring.
The Missing Children’s Child Protection Award honors a law enforcement officer who made a significant investigative contribution to protect children from abuse or victimization. Recipient: Special Agent Paul Wolpert, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, for uncovering the videotaped sexual abuse of children between one and five years old. His investigation led five women to plead guilty to producing child pornography, and to the conviction and life sentence of one man on 31 counts, including producing child pornography.
Since 2000, OJJDP has also hosted a national poster contest for fifth-graders to raise greater awareness about missing children. This year Sydney Kekel from City School in Grand Blanc, Michigan, received the Missing Children’s Day Art Contest Award.
Affirming its long-standing commitment to help find missing children, the U.S. Postal Service® issued a new stamp on May 18, 2015. Designed by Ethel Kessler, the new Forever® stamp features a photograph by Harald Biebel showing a small bunch of purple forget-me-nots with a lone flower against a white background. The forget-me-not is the symbol for International Missing Children’s Day, which occurs on the same day as National Missing Children’s Day, May 25.
President Ronald Reagan proclaimed May 25, 1983, the first National Missing Children’s Day to remember Etan Patz, a six-year-old boy who disappeared from a New York City street corner on May 25, 1979. Missing Children’s Day honors his memory and the memories of children still missing.
About the Office of Justice Programs (OJP)
OJP, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP can be found at www.ojp.gov.
Indianapolis man sentenced to 15 years for pharmacy robberyRead the Press Release
INDIANAPOLIS - Josh J. Minkler, United States Attorney announced today an Indianapolis man was sentenced to 15 years in federal prison for the armed robbery of an Indianapolis pharmacy in July of 2013. Glen Robert Wines, Jr., 46, was sentenced in federal court by U.S. District Judge Jane Magnus-Stinson after pleading guilty to charges of interference with interstate commerce by robbery and possession of a firearm by an armed career criminal.
“A mandatory minimum sentence of 15 years is reserved for the worst-of-the-worst,” said Minkler. “After being convicted of multiple violent felonies, Wines chose to commit an armed robbery of a pharmacy. He deserves every day of the 15 year mandatory minimum sentence.”
The joint FBI/IMPD investigation in this case revealed that on July 21, 2013, Wines entered the CVS Pharmacy located at 7915 South Emerson Avenue, Indianapolis, Indiana, wearing a straw hat, gray dress, red cardigan sweater, and sunglasses. Wines proceeded to the pharmacy counter and handed CVS employees a note which read, in part, “Don’t be stupid, I have a gun.” The note also demanded that employees hand over Oxycontin, Oxycodone, and Suboxone. After handing the note to the CVS employees, Wines pulled back his red cardigan sweater to reveal that he indeed had a gun in a holster on his hip. In response to the note, CVS employees filled a brown paper bag with prescription pills and handed the paper bag to Wines who then fled the store.
Responding IMPD officers quickly intercepted Wines’ getaway vehicle at the intersection of West Raymond Street and Interstate 65. Located in plain site on the front passenger floorboard was a straw hat and gray dress. In the trunk of the vehicle, IMPD officers located a brown paper bag containing all the pills taken during the robbery of the CVS. The brown paper bag with the pills was sitting on top of a 9mm pistol that was loaded with several rounds of live ammunition. Also located in the subject vehicle were a black nylon holster and a pair of sunglasses.
Wines, who has multiple prior felony convictions, is considered an armed career criminal under federal law and received an enhanced sentence for the firearm possession charge due to his violent criminal history.
According to Assistant United States Attorney Matthew Rinka, who prosecuted the case for the government, Judge Stinson also ordered Wines to serve five years of supervised release upon discharge from the U.S. Bureau of Prisons.
Hunter Roberts Construction to Pay More Than $7 Million in Penalties and Restitution for Engaging in A Fraudulent Overbilling SchemeRead the Press Release
Hunter Roberts Construction Group, LLC (“Hunter Roberts”), one of the largest construction companies in New York City, has entered into a non-prosecution agreement and agreed to pay more than $7 million in penalties to the federal government and restitution to victims to resolve a criminal investigation into the company’s past fraudulent billing practices. In addition, pursuant to the non-prosecution agreement, Hunter Roberts will provide continuing cooperation and maintain far-reaching corporate reforms.
The resolution was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Michael Nestor, Inspector General, Port Authority of New York and New Jersey; Robert Erickson, Acting Inspector General, General Services Administration, Office of the Inspector General; Cheryl Garcia, Special Agent-in-Charge, Department of Labor, Office of Inspector General; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Mark G. Peters, Commissioner, New York City Department of Investigation.
“Hunter Roberts defrauded its clients by fraudulently billing them for work that was not performed and at rates that were higher than contracted. Today’s resolution marks a significant step in our continued effort to eliminate fraud in New York City’s construction industry and also recognizes Hunter Roberts’s decision to timely accept full responsibility, provide complete cooperation, and take remedial measures to enforce best industry practices,” stated Acting U.S. Attorney Currie. Mr. Currie thanked the investigative agencies for their outstanding commitment and dedication over the course of this six-year industry investigation.
“Responsible for overseeing billions of dollars of publicly funded construction throughout the region, the Port Authority’s Office of Inspector General is committed to ensuring that industry participants operate with integrity and accountability,” stated Inspector General Nestor. Inspector General Nestor thanked his law enforcement partners for their dedication and professionalism in investigating these practices.
“We will continue working with our law enforcement partners on important construction contract fraud cases such as this, ensuring that the United States always gets what it bargained for,” said Acting Inspector General Erickson.
“Contractors that inflate invoices for union labor threaten the integrity of collective bargaining agreements and the viability of federally funded projects and private development. We will continue to work with our law enforcement partners to identify practices that jeopardize the employment opportunities for American workers,” stated Special Agent-in-Charge Garcia.
“Both public and private projects across the New York City metropolitan area were victims of Hunter Roberts’ fraudulent billing practices for more than eight years. Today’s restitution settlement of more than $7 million should help make right on a practice so wrong. The FBI is committed to working with our law enforcement partners to investigate and bring justice to those who seek to profit from fraudulent schemes, especially those in the city’s construction industry,” stated Assistant Director-in-Charge Rodriguez.
Commissioner Peters said, “This fraudulent overbilling scheme was insidious – bilking publicly-funded vendors and, in the end, taxpayers paid the ultimate cost. DOI will continue to work with its law enforcement partners to expose and stop these crimes because fraud has no business in New York City.”
Pursuant to the non-prosecution agreement signed today, Hunter Roberts acknowledged and accepted responsibility for engaging in an eight-year-long fraudulent overbilling scheme that impacted virtually all of its projects. Specifically, from 2006 through 2011, Hunter Roberts billed clients, including government contracting and funding agencies, for hours that were not worked by labor foremen from Local 79 Mason Tenders’ District Council of Greater New York (“Local 79”). Hunter Roberts effectuated this overbilling by systemically adding one to two hours of unworked or unnecessary overtime per day to the labor foremen’s time sheets and falsely listing unworked hours as worked when labor foremen were absent for vacation days, sick days, and major holidays. Additionally, from 2010 through November 2013, without seeking advance approval from its clients, Hunter Roberts paid a select group of labor foremen, and billed its clients, at wage rates that exceeded those specified in Hunter Roberts’ contracts with its clients. In admitting responsibility, Hunter Roberts acknowledged that it engaged in fraudulent overbilling on a wide number of public and private projects across the New York City metropolitan area. These projects included the Dormitory Authority of the State of New York’s Queens Hospital Center Ambulatory Care Pavilion, the Harvey Theater at the Brooklyn Academy of Music, the Borough of Manhattan Community College’s Fiterman Hall, and the PAVE Academy Charter School in Red Hook, Brooklyn.
In light of Hunter Roberts’ comprehensive internal investigation, prompt and complete acceptance of responsibility for the full breadth of its unlawful conduct, exemplary cooperation and far-reaching remedial measures, the government has agreed not to prosecute Hunter Roberts for its criminal conduct, provided that Hunter Roberts complies for two years with all the terms of the agreement executed today. Significantly, this agreement secures immediate compensation for victimized companies who were overbilled on their projects.
This resolution was the result of efforts by the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Whitman Knapp and Special Assistant United States Attorney Jonathan P. Lax are in charge of the prosecution.
HRCC NP, Stmt of Fact & Bd Cert -- FULLY EXECUTED
High-ranking Sinaloa Cartel Member Admits to Drug Trafficking and ViolenceRead the Press Release
SAN DIEGO – Jose Rodrigo Arechiga-Gamboa, also known as “Chino Antrax,” pleaded guilty in federal court today, admitting that as a high-level member of the Mexico-based Sinaloa Cartel he and his co-conspirators coordinated the transportation of tons of cocaine and marijuana into the United States and ordered or participated in cartel-related violence. He also agreed to forfeit $1 million in drug-trafficking proceeds.
Arechiga-Gamboa, 34, entered his plea before U.S. District Judge Dana M. Sabraw to a superseding information charging him with conspiracy to import cocaine and marijuana into the United States. Arechiga-Gamboa faces a maximum term of life in prison when he is sentenced on October 16, 2015 at 1:30 p.m. before Judge Sabraw.
According to his plea agreement, Arechiga-Gamboa admitted that the Sinaloa Cartel uses violence and threats to intimidate rival cartels, and that he himself was “a direct participant in, and communicated to other members of the Sinaloa Cartel, orders to commit acts of violence or threats of violence.”
As set forth in an indictment in a related case, the Sinaloa Cartel operates across multiple continents and countries, importing large quantities of narcotics into Mexico from Asia and Central and South American countries including Colombia, Ecuador, Venezuela, Peru, Panama, Costa Rica, Honduras and Guatemala.
The Sinaloa Cartel moves drugs by land, air, and sea, including cargo aircraft, private aircraft, submarines and other submersible and semi-submersible vessels, container ships, supply vessels, go-fast boats, fishing vessels, buses, rail cars, tractor trailers, trucks, automobiles, and private and commercial interstate and foreign carriers, according to the indictment.
Those narcotics are then smuggled across the international border to San Diego via automobiles, tractor trailers, trucks, fishing vessels and tunnels and stored at various stash houses, safe houses and warehouses in San Diego County. The narcotics are transported and distributed from there to locations throughout the United States.
“Chino Antrax is one of the highest-ranking Sinaloa Cartel kingpins ever prosecuted in the United States,” said U.S. Attorney Laura Duffy. “While we know that the world’s most powerful drug syndicate continues to operate, we also know that it is under intense pressure after a succession of high-impact, high-profile arrests and indictments of the organization’s highest-ranking players.”
“This plea today marks the end of a reign of terror that this particular violent enforcement arm of the Sinaloa Cartel has inflicted on innocent people both in Mexico and the United States,” says DEA San Diego Special Agent in Charge William R. Sherman. “Jose Rodrigo Arechiga-Gamboa, aka: Chino Antrax was the head of this violent group under the powerful Sinaloa Cartel. Once again, DEA commits to hunting down the remaining members of this weakening cartel and making sure the public is safe from any more drug related violence.”
Arechiga-Gamboa’s arrest and guilty plea come in spite of significant efforts by him to elude capture.
A federal grand jury in San Diego returned an indictment on December 20, 2013, charging Arechiga-Gamboa with Conspiracy to Distribute Controlled Substances Intended for Importation and Conspiracy to Import Controlled Substances. That same day, the Clerk of the Court issued a sealed warrant for his arrest.
Arechiga-Gamboa was arrested on December 30, 2013, at the Schiphol Airport in Amsterdam, Netherlands at the request of the United States. Arechiga-Gamboa was taken into custody at the airport traveling under a fraudulent name, “Norberto Sicairos-Garcia,” as he deplaned a KLM flight from Mexico City, Mexico to Amsterdam. The United States made formal requests for assistance from foreign authorities via a provisional arrest warrant and an Interpol Red Notice.
According to formal documents filed in support of Arechiga-Gamboa’s extradition from the Netherlands, Arechiga-Gamboa is alleged to have worked for the Sinaloa Cartel as a bodyguard and the leader of an enforcement group called “Los Antrax.” In this position, he assisted the Sinaloa Cartel by providing security for narcotics shipments and conducting enforcement operations.
According to extradition documents, Arechiga-Gamboa later rose to become one of the highest-level leaders of the Sinaloa Cartel. Despite traveling under a fraudulent Mexican passport by assuming the identity of a deceased individual, undergoing significant plastic surgery and attempting to alter his fingerprints, U.S. law enforcement officials were able to confirm Arechiga-Gamboa’s identity through forensic techniques. A Dutch Court considered the extradition request and, on May 28, 2014, ordered that Arechiga-Gamboa be extradited to the United States to stand trial on the narcotics trafficking offenses. Arechiga-Gamboa was extradited to the United States on July 11, 2014 and arrived at San Diego International airport under heavy security.
The investigation and prosecution of Arechiga-Gamboa was conducted by agents with the Drug Enforcement Administration in San Diego, along with federal law enforcement from numerous other agencies. It was also conducted in close coordination with DEA agents in Chicago and the United States Attorney’s Office for the Northern District of Illinois.
DEFENDANT Case Number: 13-CR-4517-DMS Jose Rodrigo Arechiga-Gamboa, aka “Chino Antrax,”
aka “Norberto Sicairos-Garcia” Age: 34 CHARGESConspiracy to Import 5 kilograms and more of cocaine and 1,000 kilograms and more of marijuana into the United States, in violation of Title 21, United States Code, Sections 952, 960 and 963.
Maximum Penalties: Life in prison and a mandatory minimum of 10 years; a maximum $10 million fine; forfeiture of all property constituting or derived from proceeds obtained as a result of the violation and all property used or intended to be used to commit the violation.
INVESTIGATING AGENCIESDrug Enforcement Administration
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
Internal Revenue Service
United States Attorney’s Office, Northern District of Illinois
Department of Treasury, Office of Foreign Asset Control
Department of Justice, Office of International Affairs
InterpolHartford Man Pleads Guilty to Tax EvasionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and William Offord, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that TROY HESTER, 42, of Hartford, pleaded guilty yesterday in Bridgeport federal court to one count of tax evasion.
This matter stems from an Internal Revenue Service investigation into State of Connecticut employees and others who had little or no federal withholding taken out of their paychecks and who failed to file income tax returns. The investigation revealed that certain individuals submitted fraudulent W-4 forms claiming numerous exemptions, or that they were exempt, and had little or no money withheld from their wages.
According to court documents and statements made in court, during the 2008 through 2013 tax years, HESTER, while employed by the Metropolitan District Commission, paid little or no federal income taxes on approximately $438,877 in income he received, resulting in a federal tax loss of approximately $70,480.
HESTER is scheduled to be sentenced on August 11, 2015, by U.S. District Judge Alvin W. Thompson in Hartford. He faces a maximum term of imprisonment of five years, a fine of up to $250,000, and is required to pay all back taxes, plus interest and penalties.
This case is being investigated by the Internal Revenue Service – Criminal Investigation Division, and is being prosecuted by Assistant U.S. Attorney Susan Wines.
Harrison County, WV prevention advocate recognized for outstanding community engagement effortsRead the Press Release
WHEELING, WEST VIRGINIA – Jo Anne McNemar of the Harrison County Prevention Partnership was recently presented with the 2015 Community Outreach Award from United States Attorney William J. Ihlenfeld, II, in recognition of her efforts to prevent substance abuse and promote overall wellness in Harrison County, West Virginia.
McNemar was honored by Ihlenfeld for her work with the Prevention Partnership, including her efforts to facilitate the Harrison County DREAM Team, known as “Teens Encouraging Advocacy and Motivation.” With McNemar’s leadership, ambitious student leaders are selected from each Harrison County high school to form the team. The group receives training on substance abuse and prevention and, in turn, the students serve as role models in their communities by designing and delivering drug education and prevention programs to younger students.
“Jo Anne is relentless in her efforts to empower the youth of Harrison County, West Virginia to make healthy decisions and to have successful, fulfilling futures,” said U.S. Attorney Ihlenfeld. “She has a ‘can’t stop, won’t stop’ attitude and puts everything she has into making Harrison County stronger and safer for all.”
McNemar, who currently serves as the Partnership for Success Coordinator with the Harrison County Family Resource Network, Inc. in Clarksburg, is a certified Substance Abuse Prevention Specialist with a Master's Degree in Community Health Education from the WVU School of Medicine.
The United States Attorney’s Awards ceremony was held at the United States Post Office and Federal Courthouse in Wheeling and included remarks from U.S. District Judge John Preston Bailey and U.S. Attorney Ihlenfeld. A variety of local, state, and federal law enforcement agencies were represented along with community leaders, volunteers, and advocates.
Government Settles False Claims Act Allegations against Florida Neurologist for $150,000Read the Press Release
Dr. Sean Orr of Jacksonville, Florida, has agreed to pay $150,000 to settle allegations that he violated the False Claims Act by providing medically unnecessary services and drugs to federal health care program beneficiaries, the Department of Justice announced today. Dr. Orr is a neurologist formerly employed by Baptist Neurology Inc. and Baptist Medical Center-Jacksonville.
“The public relies on doctors to treat their patients with integrity and not waste taxpayer dollars,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Justice Department will continue to hold accountable physicians who make false diagnoses or otherwise provide medically unnecessary treatment.”
This settlement resolves allegations that, from September 2009 to April 2012, Orr knowingly misdiagnosed certain patients with various neurological disorders, such as multiple sclerosis (MS), which caused federal health care programs to be billed for medically unnecessary services and drugs. The alleged misconduct affected beneficiaries in the Medicare, TRICARE and the Federal Employees Health Benefits programs. The settlement is based on Orr’s ability to pay.
“Our office will relentlessly pursue physicians who misdiagnose and harm patients to satisfy their financial greed,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida. “We expect physicians to act honestly, with integrity, and in accordance with the approved standards of medical care. When they do not, we all suffer.”
“Physicians who knowingly misdiagnose serious illnesses and provide unnecessary services in order to bill federal healthcare programs violate the trust their patients and the taxpayers have in the medical profession,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “Our agency will continue to thoroughly investigate health care professionals involved in such duplicity and waste.”
In 2014, the government settled related allegations against Baptist Health System Inc. – Orr’s former employer and the parent company for Baptist Neurology Inc. and Baptist Medical Center-Jacksonville – for $2.5 million.
“Dr. Orr violated the trust placed in him by his patients,” said Inspector General Patrick E. McFarland of the U.S. Office of Personnel Management (OPM). “Federal employees deserve health care providers who meet the highest standards of ethical and professional behavior. Today’s settlement reminds all providers that they must observe those standards, and reflects the commitment of federal law enforcement organizations to pursue improper and illegal conduct that puts the health and wellbeing of their patients at risk.”
The government’s investigation was initiated by a qui tam, or whistleblower, lawsuit filed under the False Claims Act by Verchetta Wells, a former Baptist Neurology Inc. employee. The act allows private citizens to file suit for false claims on behalf of the government and to share in the government’s recovery. Wells will receive $26,250 from the settlement with Orr.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
This settlement is the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Middle District of Florida, HHS-OIG, the Defense Health Agency’s Program Integrity Office, and OPM’s Office of Inspector General.
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The lawsuit against Orr was filed in the U.S. District Court for the Middle District of Florida and is captioned United States ex rel. Wells v. Sean Orr, M.D. et al.
Government Settles False Claims Act Allegations Against Florida Neurologist for $150,000Read the Press Release
Jacksonville, FL – Dr. Sean Orr of Jacksonville, Florida, has agreed to pay $150,000 to settle allegations that he violated the False Claims Act by providing medically unnecessary services and drugs to federal health care program beneficiaries, the Department of Justice announced today. Dr. Orr is a neurologist formerly employed by Baptist Neurology Inc. and Baptist Medical Center-Jacksonville.
“The public relies on doctors to treat their patients with integrity and not waste taxpayer dollars,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Justice Department will continue to hold accountable physicians who make false diagnoses or otherwise provide medically unnecessary treatment.”
This settlement resolves allegations that, from September 2009 to April 2012, Orr knowingly misdiagnosed certain patients with various neurological disorders, such as multiple sclerosis (MS), which caused federal health care programs to be billed for medically unnecessary services and drugs. The alleged misconduct affected beneficiaries in the Medicare, TRICARE and the Federal Employees Health Benefits programs. The settlement is based on Orr’s ability to pay.
“Our office will relentlessly pursue physicians who misdiagnose and harm patients to satisfy their financial greed,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida. “We expect physicians to act honestly, with integrity, and in accordance with the approved standards of medical care. When they do not, we all suffer.”
“Physicians who knowingly misdiagnose serious illnesses and provide unnecessary services in order to bill federal healthcare programs violate the trust their patients and the taxpayers have in the medical profession,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “Our agency will continue to thoroughly investigate health care professionals involved in such duplicity and waste.”
In 2014, the government settled related allegations against Baptist Health System Inc. – Orr’s former employer and the parent company for Baptist Neurology Inc. and Baptist Medical Center-Jacksonville – for $2.5 million.
“Dr. Orr violated the trust placed in him by his patients,” said Inspector General Patrick E. McFarland of the U.S. Office of Personnel Management (OPM). “Federal employees deserve health care providers who meet the highest standards of ethical and professional behavior. Today’s settlement reminds all providers that they must observe those standards, and reflects the commitment of federal law enforcement organizations to pursue improper and illegal conduct that puts the health and wellbeing of their patients at risk.”
The government’s investigation was initiated by a qui tam, or whistleblower, lawsuit filed under the False Claims Act by Verchetta Wells, a former Baptist Neurology Inc. employee. The act allows private citizens to file suit for false claims on behalf of the government and to share in the government’s recovery. Wells will receive $26,250 from the settlement with Orr.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
This settlement is the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Middle District of Florida, HHS-OIG, the Defense Health Agency’s Program Integrity Office, and OPM’s Office of Inspector General.
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The lawsuit against Orr was filed in the U.S. District Court for the Middle District of Florida and is captioned United States ex rel. Wells v. Sean Orr, M.D. et al.
Glen Burnie Attorney Sentenced to Prison for Filing Fraudulent Tax ReturnsRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles Jr. sentenced Maryland attorney Don F. Lindner, age 61, of Severna Park, Maryland, today to a year and a day in prison, followed by one year of supervised release, for filing a false tax return. Judge Quarles also entered an order requiring Lindner to pay restitution of $341,730 to the IRS for the tax years 2007 to 2011, which is the total amount of taxes he owed as a result of falsely reporting gross receipts and rental expenses.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to his plea, Lindner practiced law in Glen Burnie, Maryland, and treated his law practice as a sole proprietorship. For his tax returns for 2007 and 2011, Lindner omitted $1,230,614 of gross receipts from his law practice. Lindner also maintained a rental property. Lindner falsely reported on his tax returns that he paid over $82,700 in repairs on the rental property during the same tax years, when in fact no repairs were done, thereby fraudulently decreasing his purported taxable income.
United States Attorney Rod J. Rosenstein praised the IRS-Criminal Investigation for its work in the investigation and thanked Assistant United States Attorney David I. Sharfstein, who prosecuted the case.
Glasgow Man Ordered to Pay 6K for Killing Golden EagleRead the Press Release
GREAT FALLS – Keith Morehouse, 60, of Glasgow, Montana, pleaded guilty and was sentenced today in federal court for killing a golden eagle near Glasgow, Montana. U.S. Magistrate Judge John T. Johnston sentenced Morehouse to a $3,000 fine and $3,000 in restitution to the Montana Raptor Conservation Center in Bozeman, Montana. The Center rehabilitates injured birds, and engages in community education, conservation and research. The eagle Morehouse killed was strangled to death in a trap set in violation of state regulations.
Assistant U.S. Attorney Laura Weiss told the Court that Morehouse unlawfully killed the eagle with a snare located about five feet from the bait station in violation of state trapping regulations, which require a 30-foot setback from bait stations visible from above. An examination of the eagle revealed that it had been strangled to death by a loop of wire around its neck that was part of the trap set by Morehouse. Morehouse’s name and contact information was found on a copper tag attached to it. When Morehouse was interviewed by law enforcement he said that he tried not to catch eagles, but it was the cost of doing business. Morehouse added that he’s “out to make money.” Under federal law, a defendant must kill an eagle either knowingly or with wanton disregard for the consequences of his or her act.
The case was investigated by the U.S. Fish and Wildlife Service. Assistant United States Attorney Laura B. Weiss prosecuted the case.
Galion man faces child pornography chargesRead the Press Release
Troy B. Schuuring, 39, of Galion, Ohio, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that from on or about February 24, 2015, through on or about February 25, 2015, Schuuring knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct. The indictment also charges that on April 21, 2015, Schuuring possessed a computer that contained child pornography.
If convicted, the sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique 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.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Canton Office of the Federal Bureau of Investigation and the Canton Police Department.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Four Akron residents indicted for conspiring to harbor undocumented workers and hire them at restaurantRead the Press Release
A federal grand jury returned a four-count indictment charging four Akron residents with conspiracy and harboring undocumented and illegal aliens in relation to their operation of a restaurant in Akron, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio
Indicted are Chau Fang Lam, age 56, Rui Xu, age 27, Xin Hsu, age 33, and Zhou Qiang Zou, age 32.
Lam, Xu, Hsu, and Zou owned and operated the Royal Buffet and Grill restaurant in the Chapel Hill area of Akron, Ohio. Lam, Xu, Hsu, and Zou conspired to harbor and harbored at least 10 undocumented workers for the purpose of commercial advantage and private financial gain. The conspiracy included employing the undocumented workers at the Royal Buffet and Grill, where they worked for below minium wage or only for tips, according to the indictment.
The defendants also housed the undocumented worker at one of their residences on Annapolis Avenue in Akron and transporting them to and from the Royal Buffet and Grill as part of the conspiracy. At one time, Lam, Xu, Hsu, and Zou housed as many as 14 undocumented workers inside a single-family resident on Annapolis Avenue, according to the indictment.
Count 1 charges Lam, Xu, Hsu, and Zou with conspiracy to harbor illegal aliens, Count 2 charges Lam with harboring illegal aliens at her residence on Annapolis Avenue. Count 3 charges Xu with harboring illegal aliens at his residence on Annapolis Avenue. Count 4 charges Hsu and Xu with harboring illegal aliens by permitting them to be transported to and from their work at the Royal Buffet and Grill in their 2006 Dodge Caravan.
The case is being prosecuted by Assistant U.S. Attorney Teresa Riley following an investigation by the U.S. Department of Homeland Security Investigations in Cleveland.
If convicted, their sentence will be determined by the court after review of factors unique to this case, including prior criminal records, if any, their role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Fort Thompson Man Sentenced for ArsonRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that a Fort Thompson, South Dakota, man convicted of Arson was sentenced on May 12, 2015, by U.S. District Judge Roberto A. Lange.
Lewis Brown, Jr., age 21, was sentenced to 42 months in custody, 4 years of supervised release, $45,661.86 in restitution, and a $100 special assessment to the Federal Crime Victims Fund.
Brown was indicted by a federal grand jury on December 9, 2014. He pled guilty on March 9, 2015.
The conviction stems from an incident on or about October 15, 2014, when Brown, who was at the residence of the victim in Fort Thompson, had a disagreement with the victim’s family and was asked to leave. He left and then came back, but went to the residence next door which shares a common wall with the first victim’s home. Brown started the apartment on fire and then fled the residence. A Bureau of Indian Affairs (BIA) officer responded to the call that the duplex was on fire and people may be trapped inside. The officer was also informed that Brown had been present across the street, watching the fire, but fled before the fire department and police arrived.
This case was investigated by the BIA Crow Creek Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Brown was immediately turned over to the custody of the U.S. Marshals Service.
Former Sandwich, Illinois Business Owner Sentenced for Making A False Statement to A Financial InstitutionRead the Press Release
ROCKFORD — A former Sandwich, Ill. business owner was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for making a false statement to a financial institution. The defendant, STEVEN J. MOORHOUSE, 62, was sentenced to 21 months in federal prison, to be followed by 3 years supervised release, and was ordered to pay restitution of $881,012.38 to Old Second National Bank, Aurora, Ill. Moorhouse, who was President and majority owner of Jefsco Manufacturing Co., Inc., a manufacturing business, pled guilty to the charge on Jan. 12, 2015.
According to the plea agreement, during July 2009, Moorhouse sought a lender to make business loans to Jefsco and began to provide Jefsco’s financial information to Old Second National Bank (OSNB). The plea agreement further states that on Dec. 4, 2009, Moorhouse provided OSNB with a document that falsely inflated the value of the accounts receivable owed to Jefsco by hundreds of thousands of dollars. Moorhouse admitted he was aware that the amount of loan proceeds that OSNB would disburse would be, in part, determined by the amount of receivables.
The sentencing was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Christy Romero, Special Inspector General for the Troubled Asset Relief Program; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The investigation was conducted jointly by the Office of the Special Inspector General for the Troubled Asset Relief Program and the Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Michael D. Love.
Former National Guardsman charged with theft of public money and aggravated identity theftRead the Press Release
A federal grand jury today returned an indictment in U.S. District Court charging Jack Lori Reppart, 46, of Southington, Ohio, with theft of public money and aggravated identity theft, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Reppart, a former recruiting assistant with the Ohio Army National Guard based in Springfield, Ohio, is alleged to have used the means of identification of six individuals to steal approximately $14,000 from the Department of Defense between 2006 and 2011, according to the indictment.
The U.S. Army Criminal Investigation Command conducted the investigation. The case is being prosecuted by Assistant United States Attorney Justin Seabury Gould.
If convicted, the defendant’s sentence will be determined by the court after consideration of the federal sentencing guidelines which depend upon a number of 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.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial, in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Florida Highway Patrol Trooper Pleads Guilty to Bribery SchemeRead the Press Release
Kirk Chambers, a former Trooper with the Florida Highway Patrol (FHP), pled guilty today before U.S. District Court Judge Cecilia Altonaga to participation in a bribery scheme.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida and George L. Piro, Special Agent in Charge, FBI, Miami Field Office, made the announcement.
On May 20, 2015, former FHP Trooper Kirk Chambers pleaded guilty to violating Title 18, United States Code, 1951(a) by participating in a conspiracy to affect commerce through extortion under color of law. Based upon his guilty plea, Chambers faces a maximum sentence of 20 years’ imprisonment, followed by up to three years’ supervised release, and a maximum fine of $250,000. Pursuant to the terms of the plea agreement, Chambers will also forfeit profits from his illegal activity.
According to the facts set forth in court documents, Chambers was employed as a sworn FHP Trooper between 2006 and 2015. In 2013, the FBI and local law enforcement agencies opened an investigation into allegations that South Florida law enforcement personnel were being paid bribes by local wrecker operators to illegally solicit business from stranded drivers at accident scenes. Chambers was one of the officers identified as taking bribes.
In 2014, an FBI confidential source (CHS) approached Guillermo “Tony” Sepulveda, the owner and operator of a local Miami based towing company. Under FBI direction, the CHS told Sepulveda that he had a corrupt “chiropractor” that was interested in purchasing confidential accident information from law enforcement in order to permit the chiropractor to illegally solicit business from the accident victims. Sepulveda agreed to participate and introduced the CHS to Trooper Chambers.
Between September and November 2014, Chambers used his position to download the personal information of approximately 100 accident victims from FHP servers. Chambers provided that information to the CHS in return for $5,000, during a series of transactions. For his part in the conspiracy, Sepulveda was paid $1,200.
On January 22, 2015, Chambers was interviewed by the FBI and admitted participating in the bribery scheme. Chambers also admitted being paid thousands of dollars in bribes by various tow truck operators for a number of years.
U.S. Attorney Wifredo A. Ferrer stated, “Public corruption erodes the bond between our public institutions and the communities that they serve. Today’s prosecution demonstrates the Justice Department’s commitment to holding officials accountable for their actions and upholding their oath to serve the public interest.”
Mr. Ferrer commended the investigative efforts of the FBI Miami Area Corruption Task Force, Florida Division of Insurance Fraud and the Florida Highway Patrol. This case is being prosecuted by Assistant U.S. Attorney Anthony Lacosta.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former DEA Supervisor and Employee Charged with False Statements Regarding Employment at Adult Entertainment EstablishmentRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Ronald G. Gardella, Special Agent-in-Charge of the Department of Justice Office of the Inspector General (“DOJ OIG”), announced today the arrest of DAVID POLOS, until recently an Assistant Special Agent-in-Charge with the Drug Enforcement Administration (“DEA”), and GLEN GLOVER, a DEA Information Technology Specialist, for allegedly making false statements to the government regarding their employment at an adult entertainment establishment. The Complaint alleges that POLOS, who supervised the Organized Crime and Drug Enforcement Strike Force, and GLOVER failed to disclose their employment at, and ownership interests in, an adult entertainment establishment (the “Club”) in Northern New Jersey in connection with a background check to determine their suitability as employees of a federal law enforcement agency with access to classified information. The national security forms POLOS and GLOVER allegedly submitted in connection with the background check require disclosure of outside employment in part due to concerns attendant to certain types of employment, including proximity to crime and persons involved in crime and the risk of employee blackmail. POLOS and GLOVER surrendered to the FBI in Manhattan this morning, and are scheduled to appear before U.S. Magistrate Judge Kevin Nathaniel Fox in Manhattan federal court later today.
Manhattan U.S. Attorney Bharara said: “David Polos and Glen Glover had important and sensitive law enforcement jobs with the DEA. As alleged in the Complaint, they also had other secret jobs, which they concealed from DEA in order to maintain their national security clearance, betraying the oaths they had taken and creating needless risk for the agency they worked for.”
FBI Assistant Director-in-Charge Rodriguez said: “We expect those in government—and particularly those charged with enforcing the law—to tell the truth. As alleged, the defendants’ lack of candor is what finds them before a judge today in Manhattan Federal Court.”
DOJ OIG Special Agent-in-Charge Gardella said: “Federal law enforcement officers must be held to the highest standards of integrity. The alleged conduct is serious and we will do everything we can to ensure that justice is done in this case.”
According to the allegations in the Complaint unsealed today in Manhattan federal court*:
GLOVER and POLOS submitted national security forms in August and September 2011, respectively, that stated, among other things, that they did not have employment other than their DEA jobs within the previous seven years. In fact, as charged, GLOVER was the part owner of, and POLOS had a convertible ownership interest in, the Club, which featured scantily clad and sometimes topless women dancers and offered private stalls for what were supposed to be limited-contact dances between dancers and their patrons. As POLOS and GLOVER knew, many of the dancers – who at times engaged in sexual acts with club patrons and staff – were undocumented immigrants not lawfully in the United States.
GLOVER and POLOS both worked regular shifts at the Club in the months prior to and following their submission of the national security forms. They also hired, fired, and paid bartenders, dancers, and bouncers; advertised the Club in local periodicals; manned a back office available only to employees; remotely monitored video camera feed from the Club when not present; and generally tended to various Club-related matters. GLOVER and POLOS at times attended to Club matters during DEA work hours.
Had POLOS and GLOVER truthfully disclosed their employment at the Club, their ownership and involvement in the affairs of the Club would have been investigated as part of their background checks, and the security clearances that they were required to maintain as federal law enforcement employees likely would have been denied.
* * *
POLOS, 51, of West Nyack, New York, and GLOVER, 45, of Lyndhurst, New Jersey, are each charged with one count of making false statements, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Bharara praised the investigative work of the FBI and DOJ OIG. He also thanked the Internal Revenue Service-Criminal Investigation Division for its assistance.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Martin S. Bell and Andrew D. Goldstein are in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
* As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations and every fact described should be treated as an allegation.
Former Chief Financial Officer Pleads Guilty for Role in $30 Million Bank Fraud SchemeRead the Press Release
Earlier today, Thomas Torre, the former Chief Financial Officer of Metro Fuel Oil Corp., pled guilty to conspiracy to commit bank fraud. According to court filings and facts presented during the plea proceeding, Torre conspired in a scheme to overstate Metro Fuel’s accounts receivable in order to draw from a revolving line of credit issued by New York Commercial Bank. The fuel company later filed for bankruptcy after fraudulently obtaining over $30 million from the bank.
The guilty plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office.
“Through his deceit and trickery, Torre defrauded New York Commercial Bank in an amount exceeding $30 million,” stated Acting United States Attorney Currie. “We will remain alert to such schemes and will aggressively prosecute those who would steal from our financial institutions.” Mr. Currie extended his grateful appreciation to the Federal Bureau of Investigation, the agency which led the government’s investigation.
From approximately July 2007 to July 2012, Torre and others falsely overstated the company’s accounts receivable on certificates submitted to the bank at least once per month by not recording cash payments from customers and by creating fictitious invoice amounts. The bank relied on this misinformation in determining the amount Metro Fuel could borrow on its revolving line of credit. By September 2012, Metro Fuel could no longer pay its bills and filed a voluntary petition for bankruptcy.
Today’s guilty plea took place before United States District Judge Pamela K. Chen. When sentenced, Torre faces up to 30 years in prison, as well as forfeiture and a fine. The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney William P. Campos is in charge of the prosecution. Assistant United States Attorney Brian D. Morris is handling the forfeiture aspect of the case.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The Defendant:
THOMAS TORRE
Age: 63
Albertson, New York
E.D.N.Y. Docket No. 14 - CR - 514 (PKC)
Former Chairman of Board of Trustees for South Carolina State Sentenced to 5 Years for Racketeering ConspiracyRead the Press Release
Contact Person: J.D. Rowell, (803) 929-3000
Columbia, South Carolina---- The United States Attorney’s Office announced that Jonathan Pinson, age 45, of Greenville, South Carolina was sentenced today in federal court in Columbia, South Carolina, for Conspiracy to Commit Racketeering (Count 1), Theft Concerning Programs Receiving Federal Funds (Counts 2,3) Conspiracy to Commit Wire Fraud (Counts 12, 18), Mail Fraud (Counts 25, 26), Wire Fraud (Counts 27-34), Money Laundering (Counts 35-41) and False Statements (Counts 43-46 and 48-50). United States District Judge David C. Norton of Columbia sentenced Mr. Pinson to 60 months concurrent on each count of conviction, to be followed by 5 years supervised release. Judge Norton imposed restitution in the amount of $337,843.05.
In June 2014, a jury convicted Mr. Pinson for his involvement in four different schemes. One scheme revolved around the 2011 homecoming concert at SCSU and Mr. Pinson’s efforts to steer the concert promotion contract to his close friend and former SCSU roommate in exchange for a kickback.
Other schemes included Mr. Pinson’s theft of government funds earmarked for the installation of a diaper plant in Marion County. Evidence showed that proceeds from the grant, intended to create jobs in rural Marion County, were instead pocketed by Mr. Pinson and his associates, Lance Wright, Tony Williams, and Phil Mims, each of whom has pled guilty to charges related to the fraud.
Mr. Pinson was also convicted of theft of government funds received from a 10 million dollar American Recovery and Reinvestment Act (ARRA) grant (commonly known as stimulus money) intended for the development known as the Village at Rivers Edge (VRE).
In the final scheme Mr. Pinson again used his position as Chairman of the Board of SCSU to influence officials at SCSU to purchase land known as “Sportsman’s Retreat”. The seller of the property, Richard Zahn, Pinson’s business partner, testified that he agreed to pay a kickback to Mr. Pinson in the form of a new Porsche Cayenne, an SUV valued at approximately 90 thousand dollars.
During the two and one-half week trial, the Government called twenty witnesses, introduced approximately 200 exhibits and played 118 secretly recorded telephone calls. The calls, authorized by a court ordered wiretap, covered from July 21 to November 20, 2011.
“The FBI, and its local, state, and federal law enforcement partners, remain vigilant in the fight against Public Corruption and are committed to bringing to justice those who abuse public trust,” said FBI Special Agent in Charge David A. Thomas. In thanking his law enforcement partners, SAC Thomas added, “The investigation that gave rise to this indictment and the conviction of Mr. Pinson and others is an example of the excellent work being done by the South Carolina Public Corruption Task Force which includes the FBI, the South Carolina Law Enforcement Division and IRS.”
Special Agent in Charge Thomas Holloman said, “The Internal Revenue Service, Criminal Investigations, is committed to using our agent’s expertise in ‘following the money’ to bring accountability to public officials who steal taxpayer dollars to fund their prodigal lifestyles.”
The case was investigated by agents of the Federal Bureau of Investigation (FBI), State Law Enforcement Division (SLED), Department of Housing and Urban Development, Office of Inspector General (HUD-OIG) and Internal Revenue Service, Criminal Investigations (IRS-CI). Assistant United States Attorney Nancy Wicker, Jane Taylor, Dewayne Pearson, and J.D. Rowell of the Columbia office prosecuted the case.
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Former Alabama State Employee Sentenced to Prison for Stealing Identities Used to Request over $7 Million in Tax RefundsRead the Press Release
Montgomery, Alabama – A Phenix City, Alabama, resident and former state employee was sentenced to serve more than seven years in prison for her role in a stolen identity tax refund fraud ring, announced U.S. Attorney George L. Beck Jr. of the Middle District of Alabama, and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Tamika Floyd (30) was sentenced by U.S. District Court Judge W. Keith Watkins to serve 87 months in prison, three years of supervised release and ordered to pay $3,092,885 in restitution. Floyd pleaded guilty on Oct. 2, 2014, to one count of conspiracy to file false claims and one count of aggravated identity theft. Floyd’s co-conspirators, including Keisha Lanier, Tracy Mitchell, Latasha Mitchell, Talarious Paige and others, pleaded guilty on April 1 and are scheduled to be sentenced on Aug. 7.
According to court documents, between 2006 and 2014, Tamika Floyd worked at two Alabama state agencies located in Opelika, Alabama: the Department of Public Health and the Department of Human Resources. In both positions, she had access to the personal identifying information of individuals. Beginning in 2012, Floyd was approached by co-conspirator Lanier. As part of the scheme, Floyd stole names and personal information from the state agencies and provided the information to Lanier to be used to file false federal income tax returns. Most of the stolen identifying information consisted of names of teenagers. Lanier then provided the stolen information to co-conspirators Tracy Mitchell, Latasha Mitchell, Paige and others to use to file false tax returns. These co-conspirators filed more than 3,000 fraudulent federal income tax returns claiming more than $7.5 million in tax refunds using the stolen information provided by Floyd.
U.S. Attorney Beck Jr. and Acting Assistant Attorney General Ciraolo commended special agents of Internal Revenue Service (IRS)-Criminal Investigation, who investigated the case, and Trial Attorneys Michael C. Boteler and Gregory P. Bailey of the Tax Division and Assistant U.S. Attorney Todd A. Brown of the Middle District of Alabama, who are prosecuting the case.
Forfeited Assets Seized in Internet Gambling and Money Laundering Case DistributedRead the Press Release
ALBANY, NEW YORK - United States Attorney Richard S. Hartunian announced today the distribution to numerous law enforcement agencies of over $9.6 million dollars of forfeited assets seized during a multi-agency investigation of an international internet gambling operation. Joining U.S. Attorney Hartunian were United States Marshal David McNulty, Albany County Sheriff Craig Apple, Sr., Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation, IRS Supervisory Special Agent Thomas Fattorusso, and Saratoga County District Attorney Karen Heggen.
The assets were forfeited in connection with guilty pleas entered in U.S. District Court in the Northern District of New York by Philip Gurian, Michele Lasso, and Alan Gould, each of whom pled guilty to Conspiracy to Launder Monetary Instruments, and Jay Goldman, who pled guilty to Transmission of Wagering Information.
A total of $9,628,093.75 was distributed by the U.S. Marshal’s Service to the Albany County Sheriff’s Office, the Federal Bureau of Investigation, the Internal Revenue Service, the Albany County District Attorney’s Office, the Saratoga County District Attorney’s Office and the Broward County Sheriff’s Office as follows:
Albany County Sheriff’s Office $4,662,393.21
Albany County District Attorney’s Office $862,468.22
Saratoga County District Attorney’s Office $363,833.85
Broward County Sheriff’s Office $104,946.22
IRS $1,653,579.39
FBI $1,980,872.86
All of the above law enforcement agencies participated in an investigation which revealed that the above-named defendants operated a large-scale illegal gambling business using internet websites which allowed bettors to place thousands of wagers from New York, Florida, Indiana, California, Texas, Kansas, Nevada, and elsewhere. Over a four year period, at least $10 million in illegal gambling proceeds was deposited into accounts in the names of sham corporations and accounts in Panama, Andorra, and the Cayman Islands. Gurian admitted having said that he was making $150,000 each day. Lasso admitted helping Gurian launder the gambling proceeds to conceal the source and control of the money, depositing at least $8 million. Gould admitted involvement in $3.8 million in transactions. Jay Goldman admitted accepting nearly 9,000 bets totaling over $1.5 million using foreign websites and eighteen different routers.
U.S. Attorney Hartunian said, "Stripping criminals of illegal profits deprives them of the fuel that sustains their illegitimate enterprises. In illegal gambling, money is both the way the crime is committed and the reason for committing it. No money = no crime. Forfeiting the proceeds and instrumentalities of crime puts the money to work for good – helping the victims of crime, funding community programs, and providing resources to be used to promote public safety. Equitable sharing redirects these illegal proceeds toward the local law enforcement agencies who work with their federal counterparts and United States Attorneys to dismantle large scale criminal enterprises like this one. Such sharing can enable a local police chief, sheriff, or district attorney to commit the necessary resources to conduct a complex, long term investigation that in the end enhances public safety."
This case was prosecuted by Assistant U.S. Attorney Robert A. Sharpe.
Florida Man Indicted on Federal Charges for Flying Gyrocopter to U.S. Capitol GroundsRead the Press Release
WASHINGTON – Douglas Hughes, 61, of Ruskin, Fla., was indicted today by a federal grand jury on charges stemming from the April 15, 2015 incident in which he flew a gyrocopter into Washington, D.C., and landed on the West Lawn of the Capitol.
The indictment was announced by Acting U.S. Attorney Vincent H. Cohen, Jr., Kim C. Dine, Chief of the United States Capitol Police, and David C. Williams, Inspector General for the U.S. Postal Service.
Hughes was arrested immediately after landing the gyrocopter. The grand jury indicted him on a total of six charges. They include two felonies: one count each of operating as an airman without an airman’s certificate and violating registration requirements involving aircraft. In addition, he was indicted on four misdemeanor counts: three counts of violation of national defense airspace, and one of operating a vehicle falsely labeled as a postal carrier.
In addition, the indictment includes a forfeiture allegation seeking a judgment for the gyrocopter, which has been seized by law enforcement. Each of the felony charges carries a statutory maximum of three years in prison and potential financial penalties. Each of the misdemeanor charges of violations of national defense airspace carries a statutory maximum of one year in prison and potential fines, and the misdemeanor offense of operating a vehicle falsely labeled as postal carrier carries a statutory maximum of six months in prison and potential fines.
Hughes is to be arraigned on the charges on May 21, 2015, in the U.S. District Court for the District of Columbia.
According to the government’s evidence, Hughes flew the gyrocopter into Washington, D.C. from Gettysburg, Pa., passing through three no-fly zones. An investigation determined that he does not have a pilot’s certificate or registration for the aircraft. The gyrocopter was privately owned by Hughes, but had the logo and emblem of the United States Postal Service without authorization. Hughes was employed by the U.S. Postal Service as a postal carrier in Florida, but he was on leave at the time of the incident, and had no official duties in the Washington, D.C. area.
Hughes has been free on personal recognizance since his initial court appearance in this matter on April 16, 2015. At that time, the Court ordered that he be placed on home detention in Florida. He is barred from returning to the District of Columbia except for court appearances and meetings with his attorney. Any time that he is in the District of Columbia, Hughes must stay away from the Capitol, White House and nearby areas. He also was barred from operating any aircraft while he is on release and ordered to surrender his passport.
Charges contained in an indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case is being investigated by the United States Capitol Police and the Office of the Inspector General for the U.S. Postal Service. Assistance has been provided by the United States Park Police. The case is being prosecuted by Assistant U.S. Attorney Tejpal S. Chawla, of the National Security Section of the U.S. Attorney’s Office for the District of Columbia.
Five Major Banks Agree to Parent-Level Guilty PleasRead the Press Release
Citicorp, JPMorgan Chase & Co., Barclays PLC, The Royal Bank of Scotland plc Agree to Plead Guilty In Connection With The Foreign Exchange Market and Agree to Pay More Than $2.5 Billion In Criminal Fines
Five major banks – Citicorp, JPMorgan Chase & Co., Barclays PLC, The Royal Bank of Scotland plc and UBS AG – have agreed to plead guilty to felony charges. Citicorp, JPMorgan Chase & Co., Barclays PLC, and The Royal Bank of Scotland plc have agreed to plead guilty to conspiring to manipulate the price of U.S. dollars and euros exchanged in the foreign currency exchange (FX) spot market and the banks have agreed to pay criminal fines totaling more than $2.5 billion. A fifth bank, UBS AG, has agreed to plead guilty to manipulating the London Interbank Offered Rate (LIBOR) and other benchmark interest rates and pay a $203 million criminal penalty, after breaching its December 2012 non-prosecution agreement resolving the LIBOR investigation.
Attorney General Loretta E. Lynch, Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office and Director Aitan Goelman of the Commodity Futures Trading Commission’s Division made the announcement.
“Today’s historic resolutions are the latest in our ongoing efforts to investigate and prosecute financial crimes, and they serve as a stark reminder that this Department of Justice intends to vigorously prosecute all those who tilt the economic system in their favor; who subvert our marketplaces; and who enrich themselves at the expense of American consumers,” said Attorney General Lynch. “The penalty these banks will now pay is fitting considering the long-running and egregious nature of their anticompetitive conduct. It is commensurate with the pervasive harm done. And it should deter competitors in the future from chasing profits without regard to fairness, to the law, or to the public welfare.”
“The charged conspiracy fixed the U.S. dollar – euro exchange rate, affecting currencies that are at the heart of international commerce and undermining the integrity and the competitiveness of foreign currency exchange markets which account for hundreds of billions of dollars worth of transactions every day,” said Assistant Attorney General Baer. “The seriousness of the crime warrants the parent-level guilty pleas by Citicorp, Barclays, JPMorgan and RBS.”
“The five parent-level guilty pleas that the department is announcing today communicate loud and clear that we will hold financial institutions accountable for criminal misconduct,” said Assistant Attorney General Caldwell. “And we will enforce the agreements that we enter into with corporations. If appropriate and proportional to the misconduct and the company’s track record, we will tear up an NPA or a DPA and prosecute the offending company.”
“These resolutions make clear that the U.S. Government will not tolerate criminal behavior in any sector of the financial markets,” said Assistant Director in Charge McCabe. “This investigation represents another step in the FBI’s ongoing efforts to find and stop those responsible for complex financial schemes for their own personal benefit. I commend the special agents, forensic accountants, and analysts, as well as the prosecutors for the significant time and resources they committed to investigating this case.”
According to plea agreements to be filed in the District of Connecticut, between December 2007 and January 2013, euro-dollar traders at Citicorp, JPMorgan, Barclays and RBS – self-described members of “The Cartel” – used an exclusive electronic chat room and coded language to manipulate benchmark exchange rates. Those rates are set through, among other ways, two major daily “fixes,” the 1:15 p.m. European Central Bank fix and the 4:00 p.m. World Markets/Reuters fix. Third parties collect trading data at these times to calculate and publish a daily “fix rate,” which in turn is used to price orders for many large customers. “The Cartel” traders coordinated their trading of U.S. dollars and euros to manipulate the benchmark rates set at the 1:15 p.m. and 4:00 p.m. fixes in an effort to increase their profits.
As detailed in the plea agreements, these traders also used their exclusive electronic chats to manipulate the euro-dollar exchange rate in other ways. Members of “The Cartel” manipulated the euro-dollar exchange rate by agreeing to withhold bids or offers for euros or dollars to avoid moving the exchange rate in a direction adverse to open positions held by co-conspirators. By agreeing not to buy or sell at certain times, the traders protected each other’s trading positions by withholding supply of or demand for currency and suppressing competition in the FX market.
Citicorp, Barclays, JPMorgan and RBS each have agreed to plead guilty to a one-count felony charge of conspiring to fix prices and rig bids for U.S. dollars and euros exchanged in the FX spot market in the United States and elsewhere. Each bank has agreed to pay a criminal fine proportional to its involvement in the conspiracy:
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Citicorp, which was involved from as early as December 2007 until at least January 2013,has agreed to pay a fine of $925 million;
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Barclays, which was involved from as early as December 2007 until July 2011, and then from December 2011 until August 2012, has agreed to pay a fine of $650 million;
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JPMorgan, which was involved from at least as early as July 2010 until January 2013, has agreed to pay a fine of $550 million; and
- RBS, which was involved from at least as early as December 2007 until at least April 2010, has agreed to pay a fine of $395 million.
Barclays has further agreed that its FX trading and sales practices and its FX collusive conduct constitute federal crimes that violated a principal term of its June 2012 non-prosecution agreement resolving the department’s investigation of the manipulation of LIBOR and other benchmark interests rates. Barclays has agreed to pay an additional $60 million criminal penalty based on its violation of the non-prosecution agreement.
In addition, according to court documents to be filed, the Justice Department has determined that UBS’s deceptive currency trading and sales practices in conducting certain FX market transactions, as well as its collusive conduct in certain FX markets, violated its December 2012 non-prosecution agreement resolving the LIBOR investigation. The department has declared UBS in breach of the agreement, and UBS has agreed to plead guilty to a one-count felony charge of wire fraud in connection with a scheme to manipulate LIBOR and other benchmark interest rates. UBS has also agreed to pay a criminal penalty of $203 million.
According to the factual statement of breach attached to UBS’s plea agreement, UBS engaged in deceptive FX trading and sales practices after it signed the LIBOR non-prosecution agreement, including undisclosed markups added to certain FX transactions of customers. UBS traders and sales staff misrepresented to customers on certain transactions that markups were not being added, when in fact they were. On other occasions, UBS traders and sales staff used hand signals to conceal those markups from customers. On still other occasions, certain UBS traders also tracked and executed limit orders at a level different from the customer’s specified level in order to add undisclosed markups. In addition, according to court documents, a UBS FX trader conspired with other banks acting as dealers in the FX spot market by agreeing to restrain competition in the purchase and sale of dollars and euros. UBS participated in this collusive conduct from October 2011 to at least January 2013.
In declaring UBS in breach of its non-prosecution agreement, the Justice Department considered UBS’s conduct described above in light of UBS’s obligation under the non-prosecution agreement to commit no further crimes. The department also considered UBS’s three recent prior criminal resolutions and multiple civil and regulatory resolutions. Further, the department also considered that UBS’s post-LIBOR compliance and remediation efforts failed to detect the illegal conduct until an article was published pointing to potential misconduct in the FX markets.
Citicorp, Barclays, JPMorgan, RBS and UBS have each agreed to a three-year period of corporate probation, which, if approved by the court, will be overseen by the court and require regular reporting to authorities as well as cessation of all criminal activity. All five banks will continue cooperating with the government’s ongoing criminal investigations, and no plea agreement prevents the department from prosecuting culpable individuals for related misconduct. Citicorp, Barclays, JPMorgan and RBS have agreed to send disclosure notices to all of their customers and counter-parties that may have been affected by the sales and trading practices described in the plea agreements.
Today, in connection with its FX investigation, the Federal Reserve also announced that it was imposing on the five banks fines of over $1.6 billion; and Barclays settled related claims with the New York State Department of Financial Services (DFS), the Commodity Futures Trading Commission (CFTC) and the United Kingdom’s Financial Conduct Authority (FCA) for an additional combined penalty of approximately $1.3 billion. In conjunction with previously announced settlements with regulatory agencies in the United States and abroad, including the Office of the Comptroller of the Currency (OCC) and the Swiss Financial Market Supervisory Authority (FINMA), today’s resolutions bring the total fines and penalties paid by these five banks for their conduct in the FX spot market to nearly $9 billion.
This investigation is being conducted by the FBI’s Washington Field Office.This prosecution is being handled by the Antitrust Division’s New York Office and other criminal enforcement sections and the Criminal Division’s Fraud Section.The Justice Department appreciates the substantial assistance provided by the CFTC, OCC, FINMA, FCA, DFS, Securities and Exchange Commission, Federal Reserve Board, and the U.K. Serious Fraud Office. The Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office in the District of Connecticut have also provided assistance in this matter.
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Federal Grand Jury Indicts Dallas Anesthesiologist on Health Care Fraud OffensesRead the Press Release
DALLAS — Dr. Richard Ferdinand Toussaint, Jr., a licensed anesthesiologist who allegedly ran a scheme to defraud health care benefit plans by submitting false and fraudulent claims, has been indicted by a federal grand jury in Dallas on 17 counts of health care fraud, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
According to the indictment, Toussaint, 57, provided anesthesia services personally and through a company he founded, Ascendant Anesthesia. From approximately 2009-2010, Toussaint practiced medicine at two Dallas hospitals - Forest Park Medical Center located on North Central Expressway and Doctors Hospital at White Rock Lake, located on North Buckner Boulevard.
The indictment alleges that during this time, Toussaint ran a scheme to defraud Blue Cross Blue Shield of Texas (BCBS), United Healthcare (UHC), and the Federal Employees Health Benefits Program (FEHBP) by submitting, or causing to be submitted, false and fraudulent claims for personally performing medical direction of anesthesia services for certified registered nurse anesthetists (CRNAs). Toussaint falsely represented he was “present for” these services when: 1) he was under anesthesia undergoing surgery himself; 2) he was flying on his private jet; 3) he was in another state; and 4) he was at another hospital several miles away. For example, Toussaint submitted or caused to be submitted several claims representing he was present for and medically directing six patients at two different hospitals and was medically directing two patients while under anesthesia himself.
The indictment further alleges that Toussaint also inflated the amount of time the procedures took and pre-signed patients’ medical records representing the services were provided before the procedures even took place. In addition to personally creating false medical records and inflating anesthesia procedure time, Toussaint directed others to do the same, representing he was present for procedures when he knew he was not.
As part of his approximate 18-month-long fraud scheme, Toussaint billed BCBS, UHC, and the FEHBP more than $8 million, of which at least $5 million was fraudulent.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. Upon conviction, however, the maximum statutory penalty for each count of health care fraud is 10 years in federal prison and a $250,000 fine. Restitution could also be ordered.
The indictment also includes a forfeiture allegation that would require Toussaint, upon conviction, to forfeit proceeds obtained from his fraud scheme, including a 2010 and a 2012 Rolls Royce Ghost; a 2011 Mercedes ML350; a 2011 Bentley Mulsanne, a 2012 Bentley Continental GT and a 2016 Bentley Mulsanne; a 2012 McLaren MP4-12C and a 2015 McLaren 650S Spider; and any and all real property and any and all interests in aircraft.
The FBI; U.S. Department of Labor OIG; U.S. Department of Labor Employee Benefits Security Administration; U.S. Postal Service OIG; U.S. Department of Defense, OIG, Defense Criminal Investigative Service; U.S. Office of Personnel Management OIG; U.S. Department of Health and Human Services, Food and Drug Administration, Office of Criminal Investigation; and Internal Revenue Service Criminal Investigation are investigating. Assistant U.S. Attorneys Brandon McCarthy and Andrew Wirmani are prosecuting.
Federal Court Shuts Down California Tax Preparer and Convicted FelonRead the Press Release
A federal court in Sacramento, California, has permanently barred a former Ripon, California, man from preparing tax returns for others, the Justice Department announced today.
The civil injunction order, to which Sarad Chand consented, was entered by U.S. District Judge Garland E. Burrell Jr. of the Eastern District of California. According to stipulation, the defendant admitted to repeatedly preparing federal tax returns that understated his customers’ federal tax liabilities.
The complaint alleged that Chand, and others working with him under the business name S. Chand Tax & Accounting Services, prepared tax returns that falsely claimed inflated or fabricated tax credits or deductions. The suit noted that Chand most frequently prepared returns that falsely inflated unreimbursed employee business expenses. Chand also created Schedule Cs (Profit or Loss From Business) with false income, while for other clients he created false losses or inflated expenses, according to the suit. According to the complaint, these fabrications served to improperly reduce the customers’ taxable income and resulted in reduced tax liability or inappropriate tax refunds. Moreover, according to the complaint, Chand also led his customers to believe that he was a former Internal Revenue Service (IRS) employee, when he was not.
The suit also noted that on May 15, 2014, Chand pleaded guilty to aiding and assisting in the preparation and presentation of a false and fraudulent tax return. As part of his plea agreement, Chand agreed to the entry of a permanent civil injunction.
The suit alleged that the IRS had completed examinations of 919 of the approximately 8,155 tax returns Chand prepared from 2008 to 2012, and that nearly all of the examined returns resulted in a finding of deficiency or denial of a refund claim. The 886 returns found to be inaccurate had a total tax understatement of more than $2.7 million.
The injunction requires Chand to provide a list of customers for whom he has prepared federal tax returns or claims for refund since Jan. 1, 2012.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Federal Correctional Officer Charged in Bribery SchemeRead the Press Release
Petersburg Prison Guard Indicted for Smuggling Heroin, Marijuana,
and Cigarettes to Inmates in Exchange for BribesRICHMOND, Va. – Jermaine Brown, 37, of Chesterfield, Virginia, was charged by a federal grand jury on Tuesday with conspiracy to commit bribery and bribery for his alleged role in a prison bribery scheme.
According to the indictment, from the Fall of 2010 until March 25, 2013, while employed as a federal correctional officer and recreational specialist at the Federal Correctional Institution-Medium, Petersburg, Virginia, Brown engaged in a conspiracy to smuggle heroin, marijuana, and cigarettes to multiple inmates within the prison in exchange for bribes. The indictment charges that inmates would have friends or family outside of the prison wire transfer money to Brown’s co-conspirator, who would then pay Brown. From December 2010 through March 2011, the indictment alleges, Brown received at least five wire transfers from inmates totaling $3,050 in exchange for contraband.
Brown faces a maximum penalty of 15 years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent-In-Charge of the FBI’s Richmond Field Office; and Michael Tompkins, Special Agent-In-Charge, Department of Justice, Office of the Inspector General, made the announcement after Brown’s initial appearance before U.S. Magistrate Judge David J. Novak.
This case was investigated by Department of Justice-Office of Inspector General and the FBI’s Richmond Field Office. Assistant U.S. Attorney Erik S. Siebert is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15CR93.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Federal Grand Jury in Hammond Returns a 34 Count Superseding Indictment of Jack WeichmanRead the Press Release
HAMMOND- United States Attorney David Capp announced today that a federal grand jury returned a 34 count superseding indictment charging Jack Weichman with nine counts of bank fraud, fourteen counts of bankruptcy fraud, two counts of money laundering, four counts of wire fraud, and five counts of filing false federal income tax returns.
According to the superseding indictment, Weichman, a CPA, owned and operated an accounting firm and a medical billing firm in Munster, Indiana that managed medical practices and provided payroll, billing, accounting and tax services for its physician clients. Weichman is alleged to have illegally obtained over three million dollars from a local bank by obtaining money from his physician clients’ bank accounts, and obtaining lines of credit in the name of a client without the knowledge or permission of his clients. The proceeds from the lines of credit are alleged to have gone directly to Weichman who in turn used the money to, among other things, pay debts he owed to casinos. Weichman is also charged with defrauding a second bank into renewing a $355,133.68 term loan by omitting critical information he was required to provide the bank regarding his assets and liabilities. Specifically, it is alleged that Weichman failed to advise the bank that he owed the IRS approximately $2 million dollars in back taxes.
The superseding indictment also alleges that Weichman hid assets from his creditors and bankruptcy trustee during his Chapter 11 bankruptcy. As outlined in the superseding indictment, Weichman is alleged to have hidden hundreds of thousands of dollars that he paid to area casinos as well as tens of thousands of dollars in credit card payments for the purchase of items such as cigars, luxury handbags, sports memorabilia, and cruises. The bankruptcy charges identified in Counts 10 and 20 of the superseding indictment also trigger allegations of money laundering, alleging hundreds of thousands of dollars in criminally derived property.
A wire fraud scheme is also alleged in the superseding indictment. As part of the wire fraud scheme, the superseding indictment alleges that Weichman and employees at his accounting firm caused the transmission of withdrawal requests on a client’s IRA accounts to be faxed to brokerage offices in San Diego, CA and St. Louis Mo., without the client’s knowledge or permission. It is alleged in the superseding indictment that Weichman would direct his accounting firm employees to pretend to be the actual owner of the IRA accounts when contacting the brokerage firm. The money obtained from this scheme is alleged to have been used by Weichman for his own benefit, including gambling.
Finally, the superseding indictment alleges that Weichman filed five false income tax returns from approximately August 2009 through October 15, 2013.
This case was investigated by the Internal Revenue Service-Criminal Investigation Division, the Federal Deposit Insurance Corporation-Office of Inspector General, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Diane L. Berkowitz and David Nozick.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
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Essex County, New Jersey, Man Sentenced to 148 Months in Prison for Armed Carjacking and Bribing A Corrections Officer to Smuggle Contraband into Essex County JailRead the Press Release
TRENTON, N.J. – A Newark, New Jersey, man was sentenced today to 148 months in prison for his role in an armed carjacking and subsequent involvement in a scheme to bribe a corrections officer to smuggle contraband, including marijuana and cell phones, into the Essex County Correctional Facility, a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.
Quasim Nichols, 30, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of committing an armed carjacking and one count of conspiring with others, including Essex County Corrections Officer Stephon Solomon, 27, of Irvington, New Jersey, to commit extortion under color of official right. Judge Cooper imposed the sentence today in Trenton federal court.
According to the documents filed in this case, other cases, and statements made in court:
On May 28, 2012, Nichols and three men were traveling in a gray Dodge Magnum toward Elizabeth, New Jersey. Nichols was driving the vehicle. Upon arriving in Elizabeth, the three men exited the car and approached a 2005 BMW 645. The men pointed handguns in the direction of the BMW’s passengers and ordered them out of the car. Two of the men then entered the BMW and drove it away. The third man re-entered the Dodge Magnum driven by Nichols. The third man was carrying a black Taurus Millennium semi-automatic handgun and a cell phone that had been stolen from one of the occupants of the BMW. Nichols and the third man drove away and followed the stolen BMW.
While driving away from the scene, multiple police vehicles activated their overhead lights and turned on their sirens in an effort to stop Nichols. Nichols continued to drive the Dodge Magnum at a high rate of speed from Elizabeth into Newark, drove through a red light and struck a vehicle at the intersection of Martin Luther King Boulevard and Market Street. The driver of the other vehicle suffered serious injury. Nichols and the other man then attempted to flee the area on foot.
Subsequently, while detained at the Essex County Correctional Facility on the armed carjacking charge, Nichols conspired with others, including Solomon, Dwayne Harper, 31, of Newark, and Darsell Davis, 29, of Newark, to pay cash bribes to Solomon so that he would smuggle contraband – including cell phones, tobacco, and marijuana – into the Essex County Correctional Facility. After Davis and Harper collected the contraband, Davis delivered the items and cash bribes to Solomon, who then smuggled the contraband to Nichols. Nichols ultimately sold the marijuana and cell phones to other inmates. The inmates purchasing marijuana and cell phones had their friends and family pay for the items by sending Western Union money transfers to Nichols, who enlisted Davis and others to retrieve those payments. Davis obtained at least $4,300 in Western Union payments for Nichols.
In addition to the prison term, Judge Cooper sentenced Nichols to serve five years of supervised release.
Solomon pleaded guilty to conspiring to commit extortion under color of official right and was sentenced to 18 months in prison on March 25, 2015. Davis pleaded guilty to conspiring to commit extortion under color of official right and was sentenced to 15 months in prison on March 23, 2015. Harper pleaded guilty to conspiring to smuggle marijuana into the Essex County Correctional Facility and was sentenced to 12 months in prison on March 23, 2015.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; investigators with the Internal Affairs Division of Essex County Correctional Facility, under the leadership of Warden Roy Hendricks; the Port Authority of New York and New Jersey; the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; and the Elizabeth Police Department, under the direction of Director James Cosgrove, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Jim Donnelly and Rob Frazer of the Criminal Division, Organized Crime/Gangs Unit, and Rahul Agarwal of the U.S. Attorney’s Office, Special Prosecutions Division, in Newark.
Defense counsel: Michael J. Pappa Esq., Hazlet, New Jersey
Eight Sentenced for Their Role in a Prescription Pill SchemeRead the Press Release
Montgomery, Ala. – Eight individuals have been sentenced for their participation in a scheme to unlawfully obtain prescriptions for Oxycodone from a clinic in Opelika, Alabama, announced U.S. Attorney George L. Beck Jr. of the Middle District of Alabama. Sentencing for one additional individual is still pending.
The individuals involved in the scheme are as follows: Jean Herby Thelomat (28), of Miami, Florida; Joseph M. McCann (31), of Huntsville, Alabama; Laura Amelia Robinson (46), of Ellerslie, Georgia; Quinton Michael Corbett (28), of Belle Mina, Alabama; Mauricia Adaryll Corbett (35), of Harvest, Alabama; Porcha Donielle Cawthorn (25), of Huntsville, Alabama; Zachary Cornez Lilley (26), of Huntsville, Alabama; Brittney Lashelle McCauley (27), of Toney, Alabama; and James Richard Lawlor (35), of Huntsville, Alabama.
According to the indictment and court documents, Thelomat developed a plan to create fraudulent medical paperwork that would be presented to EMeds Medical Clinic in Opelika, Alabama for Oxycodone prescriptions. The paperwork included fraudulent reports of Magnetic Resonance Imaging (MRI) testing results that were designed to appear legitimate, but contained false information with respect to medical conditions and diagnoses.
Thelomat obtained the cooperation of two other individuals to carry out this scheme. Joseph McCann was a patient of the clinic who assisted Thelomat by serving as a "sponsor" that recruited others to pose as patients at the clinic and receive prescriptions. McCann provided these patients with fraudulent medical paperwork that he created with the help of Thelomat. In exchange for the paperwork, the drug-seeking recruits would pay Thelomat and McCann a fee. These recruits would travel hundreds of miles from their known residences in north Alabama to the EMeds clinic in Opelika, Alabama.
Laura Robinson was an employee of EMeds and was responsible for various day-to-day administrative functions, including the responsibility of verifying the legitimacy of paperwork submitted to the clinic by patients. In that capacity, Robinson verified MRI paperwork prepared by McCann and Thelomat even though she knew that the paperwork was fraudulent. Robinson would also advise McCann on modifications that needed to be made to the fraudulent medical paperwork in order to make the documents appear more legitimate and to justify prescriptions for large volumes of Oxycodone. For her participation in this scheme, Robinson was paid a fee per patient, and also received portions of these payments in the form of pills.
The remaining six individuals listed were recruits who posed as patients and utilized fraudulent MRI paperwork at the EMeds clinic to obtain illegitimate and illegal prescriptions.
Of the nine who pled guilty, eight have been sentenced and one is still pending. The sentences are as follows: McCann- 60 months; Thelomat- 57 months; Robinson- 21 months; M. Corbett- 12 months; Q. Corbett- 6 months; Lilley- 6 months; McCauley- 4 years of probation; and Cawthorn- 3 years of probation. Lawlor’s sentencing is pending and he faces a maximum sentence of 4 years.
"Prescription drug abuse is the fastest growing drug problem in the country. It is particularly troubling to find medical practitioners so complicit in this epidemic,” said DEA Assistant Special Agent in Charge Clay Morris. “We trust our medical practitioners to heal our bodies, not poison our communities. We will not tolerate or accept this illegal behavior, and we will bring justice to those that condone this type of practice."
“This prescription pill scheme highlights the serious epidemic of prescription drug addiction that threatens our communities,” said FBI Mobile Special Agent in Charge Robert F. Lasky. “This addiction results in disastrous consequences affecting every sector of our society – families, employment, and our children’s futures. Those motivated by greed who unlawfully abuse our healthcare system will be tirelessly pursued by the FBI and prosecuted for their crimes.”
“Corruption at any level diminishes the hard work and dedication of the thousands of health care workers who are dedicated to providing services to the American public,” stated Special Agent in Charge, IRS Criminal Investigation Veronica F. Hyman-Pillot. “IRS-CI stands committed to weed out individuals who ignore the public's well-being and choose to take the path to financial success by using greed and corruption. We are proud to contribute our financial expertise in an effort to halt the illegal sale and distribution of prescription drugs.”
“Prescription drug abuse is a rising problem in Alabama,” said ALEA’s State Bureau of Investigations Director Gene Wiggins. “Over the past several months ALEA has teamed with our federal and local partners to combat this problem and we are committed to continuing this effort.”
“The over-prescription and excessive use of pain medications can lead to a dangerous cycle of addiction,” stated U.S. Attorney George L. Beck Jr. “Whether accomplished by the use of fraud, or by the reckless actions of medical providers, too often this cycle leads to overdose and death. My office will continue to work with our partners to prevent these unscrupulous individuals from peddling pills and endangering the public. However, the responsibility of breaking this dangerous cycle of addiction lies not only with law enforcement, but the entire medical community. From the drug manufacturers, to the clinics, to the pharmacies, we all have a duty to safeguard the public from this epidemic.”
The case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, IRS Criminal Investigation (CI) in Montgomery, the Opelika Police Department, and the Alabama Law Enforcement Agency. It was prosecuted by Assistant United States Attorneys Gray Borden, Brandon Essig, and Bob Anderson.
Eagle Butte Woman Sentenced for Simple AssaultRead the Press Release
Acting United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, woman charged with Simple Assault pled guilty and was sentenced on May 18, 2015, by U.S. Magistrate Judge Mark A. Moreno.
Lisa Lone Eagle, age 34, was sentenced to 83 days in custody and a $10.00 special assessment to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on December 9, 2014, when Lone Eagle and her brother were walking down the street in Cherry Creek, South Dakota, and the victim was walking ahead of them. Lone Eagle and her brother were angry at the victim for providing an interview with the Cheyenne River Sioux Police Department that implicated Lone Eagle’s brother in a federal crime. Lone Eagle threatened and yelled obscenities at the victim and picked up an iron bar and threw it at the victim. The iron bar missed the victim and she was not injured.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. This case was prosecuted by Assistant U.S. Attorney Mikal Hanson.
Lone Eagle was remanded to the custody of the U.S. Marshals Service.
Dover Teacher Sentenced to 15 Years in Child Exploitation CaseRead the Press Release
HARRISBURG - The United States Attorney's Office for the Middle District of Pennsylvania announced that Senior United States District Court Judge Sylvia H. Rambo sentenced Matthew B. Puterbaugh, age 47, of Dover, Pennsylvania today to 180 months imprisonment for production of child pornography.
According to U.S. Attorney Peter Smith, Puterbaugh was a music teacher and band director at Dover Intermediate School in York County. Between 2010 and 2014, he secretly recorded images of female students at the school that constitute child pornography. In February 2014, school officials reported a complaint to the Northern York County Regional Police Department. Police conducted searches and allegedly found thousands of images depicting minors engaged in sexually explicit conduct on computers in Puterbaugh's home.
Puterbaugh was initially charged in August 2013. He pled guilty on January 21, 2015 pursuant to a plea agreement filed December 11, 2014.
This case was brought as part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
This case was investigated by the Federal Bureau of Investigation and the Northern York County Regional Police Department in cooperation with the York County District Attorney’s Office. The case was prosecuted by Assistant United States Attorney Meredith A. Taylor.
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Delaware Woman Sentenced on Fraud ChargesRead the Press Release
NORFOLK, Va. – Linda M. Avila, 50, of Frankford, DE, was sentenced today to 144 months in prison, followed by 3 years of supervised release for conspiring to obtain payment for false claims and mail fraud.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigations; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.; made the announcement after sentencing by U.S. District Judge Raymond A. Jackson.
Avila pled guilty on November 17, 2014. According to court documents, Linda Avila and unindicted co-conspirators devised a scheme to file false income tax returns using forms obtained from illegal aliens on the Eastern Shore of Virginia and elsewhere. Avila altered the W-2 forms by using white out to cover up the names, social security numbers, and addresses and then wrote in other names and addresses and filed the fraudulent returns. According to court documents, she also created fake W-2 forms and notarized fake identity documents to facilitate her fraudulent filings. The addresses listed on the forms were for post office boxes and residential addresses to which she or a co-conspirator had access. Once the refund checks arrived, she provided fake identification documents to co-conspirators so they could cash the checks. An arrest warrant and search warrant were executed at her home in Delaware and agents seized approximately 17 boxes of fraudulent tax records. Templates for fraudulent W-2 forms and identification documents were also found on her computer. The records included copies of approximately 1,754 tax returns filed between 2008 and 2014 for tax years 2004 through 2013. The total loss to the IRS based on the fraudulent returns is approximately $7.2 million.
This case was investigated by the Internal Revenue Service and Homeland Security Investigations. Assistant United States Attorney Randy Stoker is prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-108.
###Cruz Pleads Guilty to Possession of Methamphetamine; Admits 73.8 Pounds of Meth Were Destined for Distribution in Salt Lake CityRead the Press Release
SALT LAKE CITY – Travis Javier Cruz, age 38, of the Salt Lake City area, who traveled to California in October to pick up 73.8 pounds of methamphetamine from a supplier destined for distribution in Salt Lake City, pleaded guilty to possession of methamphetamine with intent to distribute in U.S. District Court Wednesday morning.
As a part of the plea agreement reached with federal prosecutors, Cruz admitted that he traveled to the Orange County area of California on Oct. 28, 2014, to pick up a large quantity of methamphetamine for distribution in the Salt Lake City area. According to a complaint filed in the case, Cruz was already under surveillance by the FBI’s Safe Streets Task Force, in conjunction with the Salt Lake Unified Police Department, the Davis County Sheriff’s Office, and other law enforcement agencies prior to making the trip to California.
Cruz arrived at a hotel in Huntington Beach, where the narcotics transaction would take place, with approximately $300,000 in cash to pay for 70 pounds of narcotics. Cruz admitted meeting with a courier for the methamphetamine source of supply at the hotel on Oct. 28, 2014, and giving him $300,000.
The next day, according to the plea agreement, the courier returned to the hotel with five or six five-gallon buckets. He took the buckets into Cruz’s room. The buckets contained the methamphetamine Cruz planned to distribute in the Salt Lake City area. Cruz admitted that he and others packaged the methamphetamine into plastic wrap and mustard to transport it back to Salt Lake City. The narcotics were placed in a roller bag and two backpacks and loaded into the trunk of the Cruz’s car for transportation back to Salt Lake City.
Agents and officers, who had been conducting surveillance at the hotel, conducted a vehicle stop after the narcotics were loaded in the car. A dog alerted to the presence of narcotics in the trunk of the vehicle. Cruz admitted as a part of the plea agreement that the amount of narcotics recovered was approximately 73.8 pounds.
On the same day, officers executed a federal search warrant at a storage unit in Salt Lake City and recovered approximately 1.5 pounds of methamphetamine. Cruz admitted it was his intent to distribute the methamphetamine in the Salt Lake City area.
As a part of the plea agreement, Cruz agreed to forfeit vehicles and cash used to facilitate the criminal conduct.
Sentencing is set for Aug. 4, 2014, in U.S. District Judge Robert J. Shelby’s courtroom. Federal prosecutors agreed in the plea agreement to recommend that Cruz be sentenced at the mid-range level of the federal sentencing guidelines in the case, as determined by the court. He faces a 10-year minimum mandatory sentence in the case.
Cruz was charged with conspiracy to distribute methamphetamine and possession of methamphetamine with intent to distribute in an indictment returned by a federal grand jury in November.
ConAgra Subsidiary Agrees to Enter Guilty Plea in Connection with 2006 through 2007 Outbreak of Salmonella Poisoning Related to Peanut ButterRead the Press Release
ConAgra Grocery Products LLC, a subsidiary of ConAgra Foods Inc., today agreed to plead guilty and pay $11.2 million in connection with the shipment of contaminated peanut butter linked to a 2006 through 2007 nationwide outbreak of salmonellosis, or salmonella poisoning, the Department of Justice announced today. ConAgra Grocery Products LLC is based in Omaha, Nebraska, with a manufacturing facility in Sylvester, Georgia.
Acting Associate Attorney General Stuart F. Delery, Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia announced the filing of a criminal information against ConAgra Grocery Products alleging a misdemeanor violation of the federal Food, Drug and Cosmetic Act. The company signed a plea agreement admitting that it introduced Peter Pan and private label peanut butter contaminated with salmonella into interstate commerce during the 2006 through 2007 outbreak. The plea agreement provides that ConAgra Grocery Products will pay a criminal fine of $8 million and forfeit assets of $3.2 million. The criminal fine is the largest ever paid in a food safety case.
“As parents, we can make sure that our kids look both ways before they cross the street and wear a helmet when they ride their bikes,” said Acting Associate Attorney General Delery. “But we have to rely on the companies that make their food to make sure it is safe. That’s why the Department of Justice is dedicated to using all the tools we have to ensure the processors and handlers of our food live up to their legal obligations to keep the public’s safety in mind.”
“The safety of the nation’s food supply is a top concern, and every company, large and small, must take appropriate measures to ensure that their products don’t make customers sick,” said Principal Deputy Assistant Attorney General Mizer. “No company can let down its guard when it comes to these kinds of microbiological contaminants. Salmonellosis is a serious condition, and a food like peanut butter can deliver it straight to children and other vulnerable populations.”
In February 2007, the U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) announced that an ongoing outbreak of salmonellosis cases in the United States could be traced to Peter Pan and private label peanut butter produced and shipped from the company’s Sylvester peanut butter plant. The company voluntarily terminated production at the plant on Feb. 14, 2007, and recalled all peanut butter manufactured there since January 2004. The CDC eventually identified more than 700 cases of salmonellosis linked to the outbreak with illness onset dates beginning in August 2006. The CDC estimated that thousands of additional related cases went unreported. The CDC did not identify any deaths related to the outbreak.
The criminal information, filed in the Middle District of Georgia, specifically alleges that on or about Dec. 7, 2006, the company shipped from Georgia to Texas peanut butter that was adulterated, in that it contained salmonella and had been prepared under conditions whereby it may have become contaminated with salmonella. The company admitted in the plea agreement that samples obtained after the recall showed that peanut butter made at the Sylvester plant on nine different dates between Aug. 4, 2006, and Jan. 29, 2007, was contaminated with salmonella. Environmental testing conducted after the recall identified the same strain of salmonella in at least nine locations throughout the Sylvester plant.
“We, as consumers, take for granted that the food we feed our families is safe,” said U.S. Attorney Moore. “We count on the companies who prepare and package the things we eat to be just as concerned with the product we put in our mouths as they are with the profit they put in their pockets. The proposed criminal fine and sentence in this case should sound the alarm to food companies across the country – we are watching, and we are expecting you to hold yourselves to a standard reflective of the trust that your consumers have placed in you. No more excuses. A lot of people got very sick because of the conduct in this case and we are committed to doing all we can to make sure that does not happen again.”
As part of the plea agreement, the company admitted that it had previously been aware of some risk of salmonella contamination in peanut butter. On two dates in October 2004, routine testing at the Sylvester plant revealed what later was confirmed to be salmonella in samples of finished peanut butter. Company employees attempting to locate the cause of the contamination identified several potential contributing factors, including an old peanut roaster that was not uniformly heating raw peanuts, a storm-damaged sugar silo, and a leaky roof that allowed moisture into the plant and airflow that could allow potential contaminants to move around the plant. As stated in the plea agreement, while efforts to address some of these issues had occurred or were underway, the company did not fully correct these conditions until after the 2006 through 2007 outbreak. In public statements after the 2007 recall, company officials hypothesized that moisture entered the production process and enabled the growth of salmonella present in the raw peanuts or peanut dust.
The company also admitted in the plea agreement that between October 2004 and February 2007, employees charged with analyzing finished product tests at the Sylvester plant failed to detect salmonella in the peanut butter, and that the company was unaware some of the employees did not know how to properly interpret the results of the tests.
“U.S. consumers expect and deserve the highest standards of food safety and integrity,” said Acting Commissioner Dr. Stephen Ostroff of the FDA. “Today’s plea agreement reflects the FDA’s commitment to ensuring the safety of the nation’s food supply and demonstrates that those who risk the health of Americans will be held accountable.”
Following the outbreak and shutdown, the company made significant upgrades to the Sylvester plant to address conditions the company identified after the 2004 incident as potential factors that could contribute to salmonella contamination. The company also instituted new and enhanced safety protocols and procedures regarding manufacturing, testing and sanitation, which it affirmed in the plea agreement it would continue to follow.
Information about the case and any upcoming court hearings can be found on the Justice Department’s website in the “Food and Dietary Supplements” section. The case is being prosecuted by the U.S. Attorney’s Office of the Middle District of Georgia and the Civil Division’s Consumer Protection Branch. This matter was investigated by the FDA’s Office of Criminal Investigations.
The proposed plea agreement and recommended sentence is not final until accepted by the U.S. District Court.