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7 July 2015
Home Health Agency Executive Director to Pay U.S. Government over $1 Million to Settle Civil ClaimsRead the Press Release
LEXINGTON – The executive director of a Lexington-based home health agency has agreed to pay the U.S. Government $1,082,416 to settle allegations that she provided unlawful compensation to physicians who referred patients to the agency.
Vicki S. House, a resident of Scott County, was the Secretary and an Executive Director of Nurses’ Registry and Home Health Corporation (“Nurses’ Registry”), an agency that provides home health services to patients throughout Central Kentucky.
According to the settlement agreement, from March 2006 through April 2010, House provided compensation to three local physicians who referred patients to Nurses’ Registry. Nurses’ Registry then submitted claims to Medicare seeking payment for the services it provided to the patients referred by these physicians. The U.S. Government contends that this conduct violated the Stark Law, which prohibits the submission of claims resulting from referrals from physicians to whom the agency has provided compensation.
“We intend to use every tool available to protect the taxpayers from those who abuse federal health care programs for personal gain,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “Every dollar lost to fraud and abuse is a dollar that is unavailable to meet the needs of those who depend on Medicare for vital healthcare needs. We will continue to vigorously protect the interests of the United States in this litigation.”
Nurses’ Registry and the Estate of its former owner and Chief Executive Officer, Lennie G. House, are also defendants in the United States’ complaint that alleges False Claims Act violations.
This settlement only resolves the government’s claims against Vicki House; it does not resolve any allegations for False Claims Act violations against Nurses’ Registry or Lennie House’s Estate. Those defendants are scheduled for trial in August 2015. If they are found liable, Nurses’ Registry and Lennie House’s Estate will be liable for three times the amount of money Medicare paid the agency for false claims, and the agency would be excluded from further participation in federal health care programs.
The investigation was conducted by the Department of Health and Human Services, Office of the Inspector General, Office of Investigations; the FBI; the Office of the Kentucky Attorney General, Medicaid Fraud and Abuse Control Unit; and the U.S. Attorney’s Office for the Eastern District of Kentucky. Assistant U.S. Attorneys Paul McCaffrey and Christine Corndorf represented the federal government in this case.
Fulton Fish Market Dealer and President Plead Guilty in Long Island to Fraud, Falsifying Federal Records, and Lacey Act ViolationsRead the Press Release
Lou’s Fish Market Inc , a federally-licensed fish dealer located in the Bronx, New York, and its company president, Mark Parente, of Englishtown, New Jersey, pleaded guilty today in federal court in Central Islip, New York, to federal felonies stemming from their role in systematically covering up purchases of illegal fluke (summer flounder), scup and black sea bass that were being harvested in violation of the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.
Parente pleaded guilty to two counts of wire fraud, one count of aiding and abetting mail fraud and one count of falsification of federal records for fraud schemes that ran from May through December 2011. Parente’s schemes involved two Long Island trawlers, one based in southern Nassau County and another in northern Suffolk County. The trawlers utilized the RSA Program as a mask for unlawful quota overages. In order to conceal the fishermen’s illicit catch, Parente directed unwitting company personnel to prepare and file at least 78 false dealer reports to the National Oceanic and Atmospheric Administration (NOAA), which omitted or misidentified approximately 203,000 pounds of fluke, 50,000 pounds of scup and 12,000 pounds of black sea bass. The wholesale value of the fish was stipulated as $481,000. Lou’s Fish Market Inc. pleaded guilty to the falsification of federal records charge as well as one count of Lacey Act False Labeling for the knowing use of false documents in connection with approximately 70,000 pounds of fluke that was shipped to interstate customers.
As part of the plea deal, the two defendants agreed to pay $932,000 in combined fines and restitution. The defendants also agreed to make a $110,000 community service payment for the enhancement of seagrass and fluke habitat around Long Island. The jointly proposed sentence includes a ban on Parente from holding a federal dealer license, accessing NOAA’s SAFIS computer system, participating in the RSA program, or being in a position to direct others to complete dealer reports. Lou’s Fish Market also agreed to increased recordkeeping and auditing requirements. The court will hear sentencing recommendations regarding non-agreed terms at a hearing set for Dec. 3, 2015.
“The Department will continue to vigorously prosecute those who jeopardize our nation’s fisheries by providing a market for illegally caught fish,” said Assistant Attorney General John C. Cruden. “In this case, the crime is all the more aggravated because the participants took advantage of a federal program designed to study fish populations and enable law-abiding fishermen to increase their catch.”
“Protecting our nation's honest fishermen is, and will always be, a top priority for NOAA. Egregious acts that undermine the sustainable management of our fisheries resources and steal from those in the industry who follow the rules will not be tolerated,” said Eileen Sobeck, Assistant Administrator for NOAA Fisheries.
The case was investigated by agents of NOAA’s National Marine Fisheries Service. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.
Former Warner Chilcott Sales Manager Pleads Guilty to Conspiracy to Commit Health Care FraudRead the Press Release
BOSTON – A former district manager of Warner Chilcott Sales U.S., LLC (Warner Chilcott), a pharmaceutical company based in Rockaway, N.J., pleaded guilty today in U.S. District Court in Boston in connection with a scheme to deceive insurance companies and Medicare so that they would cover the costs of Warner Chilcott’s osteoporosis medications, Actonel and Atelvia.
Jeffrey Podolsky, 48, of East Meadow, N.Y., pleaded guilty before U.S. District Court Chief Judge Patti B. Saris to an information charging one count of conspiracy to commit health care fraud.
Actonel and Atelvia belong to a class of pharmaceuticals known as bisphosphonates, which physicians prescribe for the prevention and treatment of osteoporosis. There are few, if any, clinical differences between most bisphosphonates on the market, including the generic version. For that reason, in 2010 and throughout 2011, many insurance companies did not include Actonel or Atelvia on their pharmaceutical formularies. The only way to get a prescription for Actonel or Atelvia paid for by an insurance company was through a prior authorization, which required the prescribing physician to explain to the insurance company why the non-formulary drug was medically necessary for the patient, as opposed to the generic version or any other bisphosphonate on the market.
Beginning in 2010 and throughout 2011, Podolsky directed the sales representatives in his district to fill out prior authorizations for physicians who prescribed Actonel and Atelvia using false clinical justifications as to why the patient needed Warner Chilcott drugs and submit them to health insurance companies. In some instances, Podolsky’s sales representatives reviewed patients’ medical charts to get the information necessary to fill out the prior authorizations, in violation of the Health Insurance Portability and Accountability Act (HIPAA). Podolsky also directed sales representatives to utilize a website to submit prior authorizations to insurance companies to disguise their identity as pharmaceutical sales representatives. Podolsky and the sales representatives that he supervised knew that they should not be involved in the preparation or submission of prior authorizations.
As a result of the scheme that Podolsky directed, insurance companies and Medicare paid at least $200,000 for Actonel and Atelvia prescriptions that were not medically necessary and would not have been paid but for the false information submitted by Warner Chilcott sales representatives.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the gross loss to the Medicare program or twice the gross gain to Podolsky (whichever is greater), forfeiture of any proceeds of the offense, and exclusion from the Medicare program. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Antoinette V. Henry, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, Metro Washington Field Office; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General; Leigh Alistair Barzey, Assistant Special Agent in Charge of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; Scott Rezendes, Special Agent in Charge of the U.S. Office of Personnel Management, Office of Inspector General, Office of Investigations; and Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Miranda Hooker and David S. Schumacher of Ortiz’s Health Care Fraud Unit and Sonya Rao of Ortiz’s Civil Division.
Former Manger of Federal Credit Union Sentenced on Embezzlement ChargeRead the Press Release
LYNCHBURG, VIRGINIA – The former manager of a local, federal credit union, who pled guilty in March to federal embezzlement charges, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg.
Claudia Rawes, 61, of Forest, Va., previously waived her right to be indicted and pled guilty to a one-count Information charging her with theft and embezzlement from a federal credit union. Today in District Court, she was sentenced to 78 months in federal prison and five years of supervised release thereafter. In addition, Rawes was ordered to pay $1.97 million in restitution to Centra Health Credit Union.
According to information presented at a previous hearing by Assistant United States Attorney Daniel Bubar, Rawes was hired by the Centra Health Credit Union [CHCU] in 1990 and began managing the Lynchburg General Hospital branch of CHCU around 2005. Rawes admitted that beginning in the early 1990s she began embezzling and stealing funds from CHCU in a variety of ways.
Mostly commonly, Rawes wrote checks from CHCU corporate accounts in order to make payments on her personal credit cards. Rawes also took a variety of steps to hide her theft. The theft created an increasingly large deficit in CHCU’s corporate account. To avoid further scrutiny, Rawes began altering the credit union’s corporate account statements. She would then provide the altered statements to examiners.
Examiners found a variety of inconsistencies, including statements in Rawes’ possession that had differing amounts of corporate account balances written in tape on top of what appeared to be the original statements. Investigators found that there was a shortfall of over $1 million between what CHCU was carrying on its books for its corporate account versus what was actually in the bank where CHCU kept its corporate deposits.
The investigation of the case was conducted by the Federal Bureau of Investigation and the United States Secret Service and the Virginia State Police. Assistant United States Attorney Daniel Bubar is prosecuting the case for the United States.
Former Lynrocten Federal Credit Union Manager Sentenced for Embezzlement, Bank Fraud, Aggravated ID TheftRead the Press Release
LYNCHBURG, VIRGINIA – A Madison Heights woman, the former manager of the Lynrocten Federal Credit Union in Lynchburg who pled guilty in February to embezzlement, bank fraud and identify theft charges, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg.
Linda Sue Newcomb, 64, of Madison Heights, previously pled guilty to one count of embezzlement from a Federal Credit Union, two counts of bank fraud and one count of aggravated identity theft. Today in District Court, Newcomb was sentenced to 120 months in federal prison. Newcomb was also ordered to pay $11,733,683 in restitution, $500,000 of which is due immediately. Teresa Humphries, the former head bank teller at Lynrocten, previously pled guilty to related charges.
“To cover expenses incurred by herself and her family members and to support an extravagant lifestyle, over the course of 14 years Ms. Newcomb stole from her employer, caused untold financial hardship to members of the credit union and betrayed the trust of others who relied upon her,” said Acting United States Attorney Anthony Giorno. “In doing so, she forfeited her integrity and her reputation. The sentence imposed today will provide some measure of compensation to the victims and will send a message that fraudulent conduct will be investigated and punished.”
According to evidence presented at previous hearings by Acting United States Attorney Anthony P. Giorno and Assistant United States Attorney Daniel Bubar, from as early as 2000, Newcomb and Humphries, who were the only two full-time employees of Lynrocten, carried out a scheme to defraud, embezzle and steal funds from the credit union’s accounts. The defendants carried out their scheme in a variety of manners.
Newcomb and Humphries originated loans in the names of credit union members without those members’ knowledge or consent, including forging the member’s name to fictitious loan documents. In order to make the loans look legitimate, they drafted the documents and Newcomb would approve them. They would then take the false loan proceeds and divert them to their personal accounts or use the money to pay off other fictitious loans.
In addition, Newcomb and Humphries transferred funds and wrote checks on certain credit union members’ accounts without their knowledge or consent, an act known as “Check Kiting.” At least three credit union members’ accounts were subject to check kiting. The two also attempted to hide their fraud by altering or withholding credit union member statements from delivery.
In all, the two caused more $12 Million in losses from the deposits of Lynrocten Federal Credit Union.
The investigation of the case was conducted by Federal Bureau of Investigation, the United States Secret Service and the Lynchburg Police Department. Acting United States Attorney Anthony P. Giorno and Assistant United States Attorney Daniel Bubar are prosecuting the case for the United States.
Former Chicago Man Sentenced to 18 Months in Federal Prison for Accepting Cash to Help 80 People Avoid City Impound FeesRead the Press Release
CHICAGO — A former Chicago resident who accepted cash payments to help 80 people file false bankruptcy petitions as a way of avoiding City of Chicago impound fees was sentenced today to 18 months in federal prison.
Daniel Rankins, 32, of Storm Lake, Iowa, and formerly of Chicago, pleaded guilty in December to one count of bankruptcy fraud. He was ordered to pay $142,737.00 in restitution by U.S. District Judge Robert M. Dow Jr. Rankins must surrender to begin serving his sentence on Sept. 29, 2015.
“What he came up with was a pretty sophisticated system,” Judge Dow said in imposing the sentence. “He could have found a better way to apply himself.”
Rankins assisted 80 people with filing false Chapter 7 bankruptcy cases in order to get their vehicles released from the City of Chicago impound lot without paying fines or fees. Rankins had approached these individuals outside a City office or was referred to them by acquaintances. He personally accompanied them to the U.S. Bankruptcy Court in downtown Chicago, and furnished them with partially completed bankruptcy applications which named the City and its impound lot as the only creditors. In exchange, Rankins accepted cash payments from the false debtors which equaled approximately half of what was owed to the City.
“This was a sophisticated hustle,” said Assistant U.S. Attorney Megan Church, who represented the government. “It was a street scam, and he was ripping off the taxpayers.”
The scheme was uncovered in May 2012 when the City of Chicago’s Department of Revenue (now Finance Department) alerted the U.S. Trustee for the Northern District of Illinois to a significant increase in the number of individuals who were using bankruptcy as a means of obtaining their impounded vehicles without paying fines or fees. The U.S. Trustee’s Office reviewed the applications and learned that the false debtors had claimed an inability to pay the $306 Bankruptcy Court filing fee and hadn’t appeared for court hearings. All of the cases were eventually dismissed, and the court fees were never collected.
In January 2013 Rankins arranged for an undercover officer to file a false bankruptcy petition under the guise of obtaining a release of the officer’s vehicle from the impound lot, in exchange for a cash payment to Rankins of $600.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph M. Ferguson, City of Chicago Inspector General. The U.S. Bankruptcy Court and the U.S. Trustee’s Office for the Northern District of Illinois cooperated and assisted with the investigation.
Former Bosnian Prison Guard ExtraditedRead the Press Release
ROANOKE, VIRGINIA – Acting United States Attorney Anthony P. Giorno and Special Agent in Charge Clark Settles of ICE-HSI, announced today that the United States government extradited a wartime camp guard to Bosnia last week, following an extended investigation led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and legal proceedings that spanned multiple years.
Almaz Nezirovic, 54, formerly of Roanoke, Virginia, was extradited to Bosnia on July 1, where he is accused of perpetrating torture and inhumane treatment against Serbian civilians detained at the Rabic Prison Camp in Derventa Municipality. He was charged in Bosnia with committing war crimes against civilians between April and July 1992 during the Bosnian War.
In April 1992, Nezirovic joined a mixed Croatian-Muslim paramilitary group in northern Bosnia, and became a prison guard. Bosnian officials charge that while serving as a prison guard, Nezirovic committed war crimes by beating, humiliating and traumatizing unarmed civilian prisoners, causing severe personal injury. This included allegedly stripping victims naked, beating them severely with a club, and forcing them to eat grass on which others had urinated.
In 2009, ICE’s Human Rights Violators and War Crimes Center received information from the Bosnian Prosecutor’s Office in Sarajevo about suspected war criminals who had absconded. The center and HSI Washington, DC special agents initiated an investigation after identifying and locating Nezirovic in Roanoke, Virginia. In April 2010, HSI special agents identified and interviewed former prisoners of the Bosnian camp who had been severely beaten in 1992. That investigation led to a criminal indictment in the Western District of Virginia U.S. District Court.
On June 23, 2011, HSI Washington, DC special agents arrested Nezirovic at his residence pursuant to a two-count indictment charging him with naturalization fraud due to his omissions and false statements about his wartime activities and other conduct during his application for citizenship. On April 19, 2012, he was indicted on a superseding five-count indictment for unlawful possession of immigration documents and unlawful application for naturalization. In July 2012, the United States, on behalf of the government of Bosnia, filed a complaint to extradite Nezirovic pursuant to an extradition treaty between the two countries, which has been in place since 1901, and the United Nations Convention Against Torture.
Nezirovic was subsequently taken into custody July 17, 2012, on a provisional arrest warrant pending the outcome of the extradition matter. On September 16, 2013, after several hearings, a United States Magistrate Judge in Roanoke, Virginia, found sufficient evidence to sustain the allegation under the treaty and certified the request for extradition to the Secretary of State.
Nezirovic then filed a petition for review with the U.S. District Court in Roanoke, Virginia, and the District Court denied his petition on March 13, 2014. After hearing oral argument in December 2014, the U.S. Court of Appeals for the Fourth Circuit affirmed the District Court’s decision. The Fourth Circuit Court of Appeals rejected Nezirovic’s arguments that his extradition was untimely or precluded by an exception in the treaty for political offenses.
“This extradition marks the culmination of years of legal effort to have Mr. Nezirovic properly face trial for the horrible acts of abuse he is charged with committing against civilian victims while he was a prison guard in Bosnia, despite the fact that he later left that country,” Acting United States Attorney Anthony P. Giorno said. “The case marks a significant achievement in law enforcement’s important, ongoing efforts to help bring international fugitives such as Mr. Nezirovic to justice, consistently with the laws and treaty obligations of the United States.”
“The investigation and extradition of individuals like Mr. Nezirovic are paramount to the mission of Homeland Security Investigations and to the safety and security of the United States,” said Special Agent in Charge Clark Settles. “War criminals will not be left to hide in our communities; they will be hunted down and made to face the consequences of their crimes.”
The investigation was conducted by HSI Washington, DC and ICE’s Human Rights Violators and War Crimes Center along with the United States Attorney’s Office for the Western District of Virginia and the U.S. Department of Justice’s Criminal Division’s Office of International Affairs. Former United States Attorney Timothy J. Heaphy and Assistant U.S. Attorney Elizabeth Wright represented the United States. The extradition was conducted by the U.S. Marshals Service in conjunction with Bosnian law enforcement partners and was facilitated by U.S. Customs and Border Protection.
Former Bank Vice President Pleads Guilty to Financial Institution FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Michael Whipple, 43, of Williamsville, NY, pleaded guilty to financial institution fraud before U.S. District Judge Elizabeth A. Wolford. The charge carries a maximum sentence of 30 years in prison of 30 years and a fine of $1,000,000.“This represents one of the largest fraud schemes in recent years,” said U.S. Attorney Hochul. “A multi-million dollar fraud scheme such as this has the potential to harm more than just the immediate victim of the crime. It also affects the greater community. In this case, thanks to the actions of both the bank and law enforcement, this defendant will not be in a position to commit further crimes in the foreseeable future.”
Assistant U.S. Attorney Trini Ross, who is handling the case, stated that between 2008 and November 2013, Whipple, an M&T Bank Vice President, devised a scheme to defraud the bank involving creation and origination of fraudulent “funding loans.” These loans were created in the names of entities which were credit worthy, or made by the defendant to appear credit worthy. The proceeds were then given to entities of Whipple’s choosing.
As part of the scheme, Whipple forged signatures on loan documentation related to the origination of many of the “funding loans” and had mail diverted to locations other than the credit worthy clients’ addresses to avoid detection. When customers questioned the defendant regarding irregularities in their loan accounts, Whipple told them it was a mistake or a bank error and promised to correct the problem. These problems were never corrected as the defendant stated they would be and he subsequently covered the irregularities up through the creation of new funding loans.
In addition, the defendant caused official checks drawn on M&T Bank to be created to fund the fraudulently originated loans. The proceeds of the fraudulent loans were used to make payments on the fraudulent loans in order to avoid detection by M&T Bank and the customer whose credit was utilized for funding and to divert funds to other business banking customers who likely would not have credit qualified for funding.
At the time the scheme was discovered, there were at least 12 funding loans fraudulently created by Whipple. As a result of the defendant’s actions, M&T Bank suffered a loss of $5,332,397.
The plea is the result of an investigation by Special Agents of the Federal Bureau of Investigation and Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office.
Sentencing is scheduled for October 7, 2015 at 10:00 a.m. before Judge Wolford.
Former Bank Teller Pleads Guilty to EmbezzlementRead the Press Release
WICHITA, KAN. - A former Labette County bank clerk pleaded guilty Tuesday to a federal charge of embezzlement, U.S. Attorney Barry Grissom said.
Angela S. Littlejohn, 41, Chetopa, Kan., pleaded guilty to one count of embezzlement. In her plea, she admitted the crime occurred while she worked as a teller during 2013 and 2014 at the Chetopa State Bank in Chetopa, Kan. She stole a total of at least $82,000 from multiple accounts at the bank.
Sentencing is set for Sept. 28. Both parties are recommending a sentence of time served, two years on probation and restitution of $82,000. Grissom commended the Federal Bureau of Investigation and Assistant U.S. Attorney Lanny Welch for their work on the case.
Final Member of a Scheme that Defrauded Capitol Finance Out of Hundreds of Thousands of Dollars Sentenced to Two Years in PrisonRead the Press Release
LONDON - The final member of a scheme, in which the defendants used other people’s identities to defraud a Leslie County bank out of hundreds of thousands of dollars, has been sentenced today to prison.
On Thursday, July 2, Nicole Lewis, 34, of Leslie County received two years in prison for aggravated identity theft. U.S. District Judge Gregory F. Van Tatenhove had previously sentenced her co-defendants, Deborah Wilson, 53, and Theresa Bowling, 46, to 18 months and 42 months respectively, for their roles in the scheme. Judge Van Tatenhove ordered that all three defendants, together, pay $420,806.60 in restitution to Capitol Finance in Leslie County. Under federal law, all of them must serve at least 85 percent of their prison sentences.
According to court documents, in November 2008 and continuing to April 2009, Bowling, Lewis and Wilson illegally obtained copies of other people’s drivers’ licenses, dates of birth and social security numbers from various sources to apply for loans. Bowling and Lewis, who held management positions at a loan company called Capitol Finance, processed the loans as if they were legitimate and issued the checks for the fraudulent loans. Lewis and Bowling cashed the checks at Hyden Citizens Bank in Leslie County. All three defendants spilt the money and used it for their personal gain.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Craig Hutzell, Acting Special Agent in Charge, United States Secret Service, jointly announced the sentence.
The investigation was conducted by Secret Service. Assistant U.S. Attorney Andrew Sparks prosecuted this case on behalf of the federal government.
Federal Court Prohibits Three Florida Tax Preparers and Their Businesses from Preparing Tax Returns for OthersRead the Press Release
A federal court has barred three Florida men from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction order, to which Geto Dorlizier, Lival Gourdet and Jourmel Thomas consented, was signed by U.S. District Judge Kenneth A. Marra of the U.S. District Court for the Southern District of Florida. The order also bars the businesses the defendants were operating — Atlantic Multi Services LLC, Authentic Financial Services LLC, and JTS Paperworks and Tax Services Inc. — from preparing federal tax returns for others.
According to the complaint, the defendants prepared federal income tax returns for customers that understated the tax that was due or overstated customers’ refunds by improperly claiming fuel tax credits, education credits and earned income tax credits. Of the returns the defendants prepared for tax years 2009 through 2012 that were examined by the Internal Revenue Service (IRS), all returns contained false or frivolous tax credits or deductions. The injunction requires the defendants to provide the government with a list of all customers for whom they have prepared federal tax returns since Jan. 1, 2009.
Dorlizier and Thomas previously were sentenced to serve 111 months in prison to be followed by three years of supervised release and 61 months in prison to be followed by three years of supervised release, respectively, following their guilty pleas to aggravated identity theft, among other crimes, for their participation in a scheme to commit stolen identity tax refund fraud. Dorlizier and Thomas obtained identifying information on individuals, filed fraudulent tax returns on their behalf, and then cashed U.S. Treasury checks they received using these stolen identities, according to the suit. As part of their plea agreements, Dorlizier and Thomas agreed to be permanently enjoined from preparing tax returns for others.
Return preparer fraud is one of the IRS’ 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.
Elko County Residents Charged with Possessing Stolen FirearmsRead the Press Release
RENO, Nev. – Five Elko County residents, including three convicted felons, have been indicted by the federal grand jury in Reno on charges that they possessed multiple stolen firearms, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and ATF Acting Special Agent in Charge Eric D. Harden.
Joshua James Stout, 29, Danny Duane Wharton, 46, and Sarah Gravelle, 25, of Elko, Nev., are charged with two counts of possession of stolen firearms, and Mason Miller Warren, 37, and Janae Stanton, 24, of Wells, Nev., are charged with one count of possession of stolen firearms. Warren, Stout and Wharton are also charged with felon in possession of firearms. The indictment was returned by the grand jury on July 1. The defendants were arrested and had their initial appearances and arraignments on Mon., July 6 before U.S. Magistrate Judge Valerie P. Cooke in Reno. Defendants Stout, Wharton, and Warren were detained pending trial. Defendants Gravelle and Stanton were released on personal recognizance bonds pending trial.
“Stolen firearms frequently end up being used in violent crimes and drug trafficking offenses,” said U.S. Attorney Bogden. “We will pursue federal charges against persons who possess stolen weapons, especially against persons who previously have been convicted of felony offenses.”
”Fortunately, we recovered a significant number of stolen handguns, rifles and shotguns in this case before they were used to harm others,” stated Acting Special Agent Harden. “I would like to specifically thank the Elko County Sheriff’s Office and Assistant U.S. Attorney Megan Rachow for their partnership in the course of this investigation.”
According to the charges in the indictment, on June 3, 2015, the defendants possessed 64 stolen firearms, including handguns, shotguns, and rifles. On the same date, Stout, Wharton and Gravelle allegedly possessed an additional 12 stolen firearms. Wharton is charged with felon in possession, as he was previously convicted of a drug trafficking offense in Nevada. Stout is charged with felon in possession, as he was previously convicted of a stolen goods offense in Nevada. Warren is charged with felon in possession, as he was previously convicted of being a prohibited person in possession of a firearm in federal court in Nevada.
The case is being investigated by ATF and the Elko County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Megan Rachow.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Edgecombe County Man Sentenced for Cocaine Conspiracy and Firearm OffenseRead the Press Release
NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise W. Flanagan sentenced JOSHUA MICHAEL EDMONDSON, 26,of Pinetops, North Carolina, to 79 months in prison and 5 years of supervised release for conspiracy to distribute and possess with the intent to distribute cocaine and for using and carrying a firearm during and in relation to a drug trafficking crime. EDMONDSON previously pled guilty to these charges on July 15, 2014.
The Greenville Regional Drug Task Force used a confidential informant to buy cocaine and Vicodin pills from EDMONDSON in September 2012. On October 3, 2012, EDMONDSON met with the informant to sell him 12 ounces of cocaine. Detectives arrested EDMONDSON during the meeting and found EDMONDSON in possession of 348 grams of cocaine and a stolen 9 mm pistol. The investigation revealed that EDMONDSON was responsible for trafficking 476 grams of cocaine.
The investigation of this case was conducted by the Greenville Regional Drug Task Force. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
District Man Sentenced to 18 Years in Prison for Armed Carjacking on Christmas Eve and Other OffensesRead the Press Release
WASHINGTON – Andy Thompson, 23, was sentenced today to 18 years in prison for various crimes, including a carjacking of a delivery truck on Christmas Eve 2014 and a subsequent shoot-out with police, Acting U.S. Attorney Vincent H. Cohen, Jr., announced.
Thompson, of Washington, D.C., pled guilty in April 2015, in the Superior Court of the District of Columbia, to four counts: armed carjacking, assault on a police officer while armed, attempted robbery, and attempted burglary. He was sentenced by the Honorable Zoe Bush. Upon completion of his prison term, Thompson will be placed on six years of supervised release.
The armed carjacking and confrontation with police took place on Dec. 24, 2014. According to the government’s evidence, at approximately 5:20 p.m., Thompson put on a mask and approached a FedEx employee making deliveries in the 1300 block of Adams Street NE. Thompson pointed a gun at the driver and demanded that he leave the FedEx truck. The driver complied, and Thompson drove away in the FedEx vehicle. An officer with the Metropolitan Police Department (MPD) spotted the vehicle almost immediately and attempted to pull it over. Thompson refused to pull over and fled into an alleyway off the 2200 block of 16th Street NE. There, the FedEx truck became wedged between an exterior brick wall and a police cruiser.
When the police ordered Thompson to display his hands and exit the vehicle, he pointed his gun at the police officers and fired. The police returned fire. Thompson was the only person struck in the exchange of gunfire, with a bullet grazing him in the head. The police recovered a 9mm handgun next to where the stolen truck was stopped.
The other crimes targeted convenience stores. The attempted robbery took place at about 2:30 a.m. on Dec. 16, 2014 at a 7-Eleven convenience store in the 300 block of Hawaii Avenue NE. Thompson approached a store employee, asked that new milk be placed in the coffee machine, and then reached behind the counter and stole four cartons of cigarettes. He smacked at the hand of a second employee who tried to stop him.
The attempted burglary took place at about 8 a.m. on June 29, 2013, at another 7-Eleven store, this time in the 2200 block of New York Avenue NE. Thompson took multiple packs of cigarettes from the store. In pleading guilty, he admitted that he stole cartons of cigarettes from four different 7-Eleven stores on 11 different occasions.
In announcing the sentence, Acting U.S. Attorney Cohen commended the work of those who investigated the case for the Metropolitan Police Department (MPD). He also expressed appreciation for the work of Assistant U.S. Attorneys Christine Macey and Gilead Light, of the Felony Major Crimes Trial Section, who prosecuted the matters.
Dennis Helmer Sentenced to More Than 12 Years in Prison for Orchestrating $1.3 Million Coin Fraud SchemeRead the Press Release
United States Attorney Andrew M. Luger today announced the sentence of DENNIS CHARLES HELMER, a/k/a “Jeff Jones,” a/k/a, “Mr. Diamond,” a/k/a, “Dennis Dimon,” 54, to 150 months in prison for devising an elaborate coin fraud scheme and defrauding dozens of elderly victims of more than $1.3 million. HELMER was indicted on August 5, 2014, and pleaded guilty on September 25, 2014. He was sentenced today before Senior Judge David S. Doty.
According to the defendant’s guilty plea and documents filed in court, HELMER operated Wholesale Assets Worldwide, LLC (WAW) and Best Price International, LLC (BPI), which engaged in appraising, buying, selling, and trading of coins and precious metals. From November 2009 through January 2014, through WAW and BPI, HELMER contacted dozens of victims, many of whom were in their 80s and 90s. He visited potential victims in their homes and persuaded them to entrust to him money, coins, and precious metals, based on false promises. HELMER falsely told victims that his businesses had more than 75 employees and $500 million in annual revenue, and also provided a falsely obtained “Dun & Bradstreet Credibility Review” of his business.
According to the defendant’s guilty plea and documents filed in court, WAW and BPI received over $1.3 million in coins, precious metals, and cash from victims. Instead of fulfilling their orders, HELMER sold many of the coins and used customers’ money and proceeds from those sales to fulfill other orders, make payments to other customers, pay his own personal expenses, and attempt to fund start-up costs for another purported company, Smoke Shack, LLC.
According to the defendant’s guilty plea and documents filed in court, HELMER targeted elderly victims because they were particularly vulnerable. HELMER took note of anything that would make it easier to steal from them. For example, HELMER targeted a 79-year-old stroke victim, an 86-year-old victim who fell asleep during an in-person meeting with HELMER, a 99-year-old victim suffering from dementia, a victim in hospice care, and a legally blind octogenarian.
According to the defendant’s guilty plea and documents filed in court, HELMER used various aliases, including “Jeff Jones,” in an attempt to hide his three prior criminal convictions for similar conduct in both Dakota and Hennepin Counties. In November 2013, when HELMER learned that WAW was under investigation, he moved his coin fraud operation to Florida where he continued to operate his scheme under the newly formed BPI under the aliases, “Mr. Diamond” and “Dennis Dimon.”
This case is the result of an investigation conducted by the United States Postal Inspection Service and the Minnesota Department of Commerce.
Assistant U.S. Attorney Kimberly A. Svendsen prosecuted this case.
Defendant Information:
DENNIS CHARLES HELMER, 54
Farmington, Minn.
Convicted:
- Mail Fraud, 1 count
Sentenced:
- 150 months in federal prison
- 3 years supervised release
- $1,329,873.25 restitution
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Dallas Man Pleads Guilty to Federal Offense in Bankruptcy-Related CaseRead the Press Release
DALLAS — Al Hakeem Muhammad, II, 26, appeared today before U.S. Magistrate Judge David L. Horan and pleaded guilty to one count of misrepresentation of a Social Security number, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Muhammad, who is on bond, faces a maximum statutory penalty of five years in federal prison and a $250,000 fine. Sentencing is set for October 21, 2015, before U.S. District Judge Barbara M. G. Lynn.
According to plea documents filed in the case, in early January 2015, Muhammad used a Social Security number that he knew was not his when he completed a credit application to fraudulently obtain a lease on an apartment located in Victory Park in Dallas.
This case represents one of the felony prosecutions of bankruptcy-related crimes generated by the recent Bankruptcy Fraud Initiative within the Northern District of Texas. Since February 2013, 12 defendants have been charged with various felony offenses as a result of criminal referrals from the U.S. Trustee Program to the U.S. Attorney’s Office. Eight defendants have been convicted either following a trial or guilty plea. Five defendants have been sentenced. Three defendants are awaiting trial, and one defendant remains in fugitive status with an outstanding arrest warrant.
The FBI investigated the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Dallas Man Pleads Guilty to Child Sex Trafficking OffenseRead the Press Release
DALLAS — A Dallas man who facilitated his 16-year-old girlfriend’s commercial sex acts appeared in federal court this morning and pleaded guilty before U.S. Magistrate Judge Paul D. Stickney to one count of sex trafficking of children, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Trenton McLemore, 29, faces a statutory maximum penalty of not less than 10 years and up to life in federal prison and a $250,000 fine. However, the parties agree if the Court accepts the plea agreement, the appropriate term of imprisonment in this case is 252 months (21 years) in federal prison. Sentencing is set for October 21,2015, before U.S. District Judge Barbara M. G. Lynn.
According to documents filed in the case, McLemore met “Jane Doe” and her family when she was 11-years-old. In July 2013, when Jane Doe was 16-years-old, she ran away from home to be with McLemore, and the two began living in motels.
On August 1, 2013, McLemore began facilitating Jane Doe’s commercial sex acts in several ways. He asked friends and family to rent rooms for them at a Super 8 Motel and a Motel 6 in the Dallas area for her to use with commercial sex customers. McLemore also provided Jane Doe a cell phone for her to use to communicate with commercial sex customers. McLemore often used that phone to communicate with Jane Doe’s customers, sometimes posing as her and texting her customers to arrange “dates” and then leaving the motel room shortly before the customer arrived.
McLemore also took sexually explicit photos of Jane Doe that he distributed via text message to potential customers. Often, McLemore would stay near the motel room to act as Jane Doe’s bodyguard while she engaged in the commercial sex acts, and he would return to the room shortly after the customer left to collect the proceeds.
In mid-September 2013, a detective with the Irving Police Department conducting an operation to identify possible victims of human trafficking, found a commercial sex advertisement on Mocospace.com with photographs of a female who appeared to be underage. He contacted the number, and after exchanging several messages regarding a potential commercial sex act, they agreed to meet on September 19, 2013, in a specific room at a Super 8 Motel in Irving, Texas.
As McLemore left that room shortly before the “date,” he was seen texting at the same time the detective was receiving messages about the “date.” When the detective arrived and entered the motel room, Jane Doe agreed to engage in a commercial sex act with him. She was then placed in custody and law enforcement determined she was a 16-year-old runaway from Dallas.
McLemore had stayed nearby while that “date” occurred, and his personal items were later found inside that motel room. When law enforcement learned Jane Doe’s age, they arrested McLemore for compelling prostitution of a person under the age of 18 and human trafficking. He has been in custody since that time.
The Irving Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), both members of the North Texas Trafficking Taskforce, investigated. Assistant U.S. Attorney Cara Foos Pierce is in charge of the prosecution.
# # #
Convenience Store Owner Pleads Guilty to Trafficking in Food StampsRead the Press Release
ATLANTA - Tessema Lulseged, the owner and operator of Big T Supermarket in Decatur, Georgia, has pleaded guilty to trafficking in food stamps. Lulseged allowed his customers to exchange their food stamp benefits for cash in a scheme that netted him $6.5 million.
“Food stamps are intended to provide assistance to our citizens most in need,” said Acting U.S. Attorney John A. Horn. “This defendant ran a corrupt exchange scheme that, until his scheme was discovered, undermined the purpose of the program and resulted in great financial benefit to himself.”
“This defendant, in knowingly and so aggressively stealing government assistance from vulnerable individuals who were already struggling, demonstrates a new level of insensitivity and greed. The FBI will continue to provide assets and resources to assist in ensuring that these much needed federally funded assistance programs are used as intended and not abused by such individuals as Mr. Lulseged,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“USDA-OIG dedicates its resources to ensuring integrity in its programs. One of the ways in which USDA-OIG does this is through vigorously investigating allegations of fraud in the EBT program,” said Karen Citizen-Wilcox, Special Agent-in-Charge, USDA-OIG. “Tessema Lulseged made a choice to defraud the EBT program and in doing so defrauded the taxpayers of millions of dollars through purchasing benefits from recipients. He, like countless others, may look at this as a victimless crime. However, it is not a victimless crime, but rather a crime that takes away needed food from the mouths of those the program was intended for. More often than not, those victims, many of whom are children, have no say in how the benefits are used. USDA-OIG will continue to work with DOJ and its law enforcement partners to investigate and prosecute those who greedily and selfishly traffic in EBT benefits.”
According to Acting U.S. Attorney Horn, the charges, and other information presented in court: From January 2009 through April 2014, Lulseged unlawfully allowed his customers to exchange their food stamp benefits for cash at the rate of 60 cents on the dollar. As part of the deal, Lulseged required customers to purchase eligible food products equal to 10% of the value of the transaction. For example, if a customer wanted to sell $100 worth of food stamp benefits for $60, that customer also had to purchase $10 worth of eligible food products from Lulseged’s store. The fraudulent scheme netted Lulseged approximately $6.5 million.
Pursuant to search and seizure warrants that were executed in February 2014, the government seized and forfeited over $700,000 in funds tainted by the fraud. The government also forfeited two pieces of real property – the defendant’s personal residence in Gray, Georgia, and his store property in Decatur, Georgia, on the grounds that they were proceeds of the fraud and properties involved in money laundering transactions.
Lulseged, 49, of Decatur, Georgia, pleaded guilty before U.S. District Court Judge Leigh Martin May. His sentencing hearing is scheduled for September 22, 2015, at 10:00 a.m.
This case is being investigated by the United States Department of Agriculture, Office of Inspector General, Investigations Division, and the Federal Bureau of Investigation.
Assistant United States Attorneys J. Russell Phillips and Jenny R. Turner are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Chattanooga, Tennessee, Man Charged with Solicitation to Burn Down a Mosque in Islamberg, New YorkRead the Press Release
Vanita Gupta, the head of the Civil Rights Division, and William C. Killian, the U.S. Attorney for the Eastern District of Tennessee, announced today that a federal grand jury in Knoxville, Tennessee, returned a one-count indictment charging Robert Doggart, 63, with soliciting another person to violate federal civil rights laws by burning down a mosque in Islamberg, a hamlet in Hancock, New York.
According to court documents, Doggart planned an attack on Islamberg, a small settlement that is home to a large Muslim community. Doggart’s plans included burning a mosque, a school and a cafeteria in the community, and he solicited others to join in his plan through Facebook posts and in telephone conversations.
Doggart has been charged with one count of soliciting others to violate federal civil rights laws by intentionally defacing, damaging or destroying any religious property, because of the religious character of that property, or attempting to do so. If convicted, the defendant faces a maximum penalty of 10 years in prison.
This case is being investigated by the Federal Bureau of Investigation. It is being prosecuted by Civil Rights Division Trial Attorney Saeed Mody and Assistant U.S. Attorneys Perry H. Piper and Chris Poole of the Eastern District of Tennessee.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Chattanooga Man Charged with Solicitation to Burn Down A Mosque in Islamberg, New YorkRead the Press Release
WASHINGTON—Vanita Gupta, the head of the Civil Rights Division, and William C. Killian, the U.S. Attorney for the Eastern District of Tennessee, announced today that a federal grand jury in Knoxville, Tennessee, returned a one-count indictment charging Robert Doggart, 63, with soliciting another person to violate federal civil rights laws by burning down a mosque in Islamberg, a hamlet in Hancock, New York.
According to court documents, Doggart planned an attack on Islamberg, a small settlement that is home to a large Muslim community. Doggart’s plans included burning a mosque, a school and a cafeteria in the community, and he solicited others to join in his plan through Facebook posts and in telephone conversations.
Doggart has been charged with one count of soliciting others to violate federal civil rights laws by intentionally defacing, damaging or destroying any religious property, because of the religious character of that property, or attempting to do so. If convicted, the defendant faces a maximum penalty of 10 years in prison.
This case is being investigated by the Federal Bureau of Investigation. It is being prosecuted by Civil Rights Division Trial Attorney Saeed Mody and Assistant U.S. Attorneys Perry H. Piper and Chris Poole of the Eastern District of Tennessee.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
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Charleston felon pleads guilty to illegally possessing handgunRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Travis Leonard Sumpter, 38, of Charleston, pleaded guilty to being a felon in possession of a firearm. On December 4, 2014, members of the Charleston Police Department found Sumpter to be in possession of a Cobra Enterprises .38 Special derringer. Sumpter was prohibited from possessing a firearm by virtue of a 2007 felony conviction in Kanawha County Circuit Court for wanton endangerment involving a firearm.
Sumpter faces up to ten years' imprisonment and a fine of up to $250,000 when he is sentenced on October 7, 2015, by United States District Judge John T. Copenhaver, Jr.
This case was investigated by the Charleston Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Timothy D. Boggess is in charge of the prosecution.
Buffalo Man Pleads Guilty to Stealing MailRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Michael Lamacchia, 48, of Buffalo, N.Y., pleaded guilty to theft of mail before U.S. District Judge Elizabeth A. Wolford. The charge carries a maximum penalty of five years in prison and a $5,000 fine.Assistant U.S. Attorney Trini E. Ross stated that the defendant, who worked as a mail carrier for the U.S. Postal Service, took a letter containing New York State Safety Inspection Certificate stickers and used the stickers on vehicles owned by him or members of his family. Lamacchia did so in order to avoid having the vehicles inspected or repaired to pass inspection.
The plea is the culmination of an investigation by Special Agents of The United States Postal Service, Office of the Inspector General, under the direction of Monica Weyler.
Sentencing is scheduled for October 7, 2015 at 11:00 a.m. before Judge Wolford.
Brooklyn man charged for operating sports wagering businessRead the Press Release
A Brooklyn, Ohio, man faces charges related to his operation of a sports wagering business, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Jay Jacobs, 63, was charged via criminal information with one count of transmission of wagering information and one count of money laundering.
Jacobs engaged in the business of betting and wagering between 2009 and 2012. He used communication facilities in interstate commerce to transmit bets, wagers and information assisting in the placing of bets and wagers on sporting events and contests, according to the information.
He also engaged in monetary transactions derived from unlawful activity. On August 31, 2010, he transferred $20,000 from his Fire Fighters Community Credit Union account to his TD Ameritrade account, according to the information.
This case is being prosecuted by Assistant U.S. Attorney Robert J. Patton following an investigation by the U.S. Secret Service’s Money Laundering Task Force, which is comprised of representatives from the Internal Revenue Service – Criminal Investigation Division, Immigration and Customs Enforcement, the U.S. Department of Housing and Urban Development - Office of Inspector General, Social Security Administration – Office of Inspector General, Ohio Investigative Unit, Ohio Adult Parole Authority, the Cleveland Division of Police and the Lake County Prosecutor’s Office.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
A charge is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Anchorage Man Sentenced to 6 Years for Drug TraffickingRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen Loeffler announced today that an Anchorage man has been sentenced by Senior United States District Court Judge H. Russel Holland to serve 72 months in federal prison for distributing methamphetamine on two separate occasions.
Boonchan Yang, a/k/a “Chowmein,” 22, of Anchorage, Alaska, was previously convicted by a jury of two separate drug trafficking crimes. He was found guilty of distributing $1100 worth of methamphetamine on June 19, 2014, as part of combined gun and drug transaction. Four months later, on October 3, 2014, Yang was involved in another drug sale involving an ounce of methamphetamine. The jury convicted him of two counts of distribution and possession with intent to distribute narcotics as a result of these actions.
According to Assistant United States Attorney Stephanie C. Courter, who prosecuted the case, the evidence at trial showed that on June 19, 2014, Yang arranged to sell an informant half an ounce of methamphetamine and an AK-47. Text messages and recorded telephone conversations played at trial captured Yang arranging the deal. Law enforcement also videotaped the deal itself, which allowed the trial jury to actually watch Yang committing the crime in real time.
On October 3, 2014, Yang was again involved in drug trafficking activity. On that day, the evidence at trial showed that Yang brought an ounce of methamphetamine to a store parking lot in Anchorage intending to sell it for $1700. When he was confronted by law enforcement, Yang tried unsuccessfully to hide the drugs inside the car where he was sitting. Inside the car, he also had dime baggies used for drug distribution and a digital scale.
At sentencing, Judge Holland also considered the fact that, between the two drug deals of which he was convicted, Yang was also involved in more drug related conduct. Specifically, on June 26, 2014, Yang was stopped by the Anchorage Police Department while in possession of methamphetamine, baggies used for drug distribution, and a handgun.
In sentencing Yang, Judge Holland noted the need for the sentence to promote respect for the law and protect the public from future drug trafficking crimes. He also remarked that the trajectory of Yang’s conduct was worrisome, calling Yang an intermediate level drug dealer whose conduct was made all the more dangerous given his introduction of firearms.
In announcing the sentence, U.S. Attorney Loeffler praised the Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations, IRS Criminal Investigations, and the Anchorage Police Department, whose investigative efforts led to Yang’s prosecution and conviction.
Allston Bakery Owner Settles Alleged Violations of Federal Food Safety LawsRead the Press Release
BOSTON – Yi Soon Bakery, Inc. of Allston, Mass., and its owner, Kung Hung, have settled allegations that they violated the Federal Meat Inspection Act by making meat pastries and selling them to wholesale customers without having the pastries inspected by the Food Safety and Inspection Service, part of the U.S. Department of Agriculture (USDA).
Food preparation businesses may lawfully purchase USDA-inspected meat and use it to make food products that they sell to retail customers. But if the food products are to be sold wholesale, they must be reinspected by USDA.
In December 2012, the United States sued Yi Soon Bakery and Hung, alleging that they had bought and used USDA-inspected beef and pork to make pastries, which they had sold to a food store in Lowell, for resale without the required USDA reinspection. The bakery and Mr. Hung signed a consent decree in which they agreed to stop selling uninspected food products to wholesale customers.
The United States later discovered that the bakery and Mr. Hung had violated the consent decree by selling 187 pounds of uninspected meat pastries to Asian food markets in Worcester, Amherst, and Boston for resale. In March 2015, the government notified the court of the violation. The bakery and Mr. Hung then agreed to settle.
Under the terms of the settlement, Mr. Hung has agreed to pay the United States a civil penalty of $30,000, to sell Yi Soon Bakery, and to cease working in the food industry altogether. The purchaser of the bakery will be advised of the government’s lawsuit, the settlement, and the legal prohibition on selling uninspected meat food products to wholesale customers.
The announcement was made today by Untied States Attorney Carmen M. Ortiz and Alfred V. Almanza, Deputy Under Secretary for Food Safety of the U.S. Department of Agriculture. The case was handled by Assistant U.S. Attorney Christine Wichers of Ortiz’s Civil Division.
16 Convicted in Joint Federal and State Drug Trafficking InvestigationRead the Press Release
More than $30,000 in drug proceeds and 10 firearms seized and forfeited in charges stemming from heroin connection between Chicago and Steubenville, Ohio
STEUBENVILLE, Ohio – Local, state and federal law enforcement agencies were recognized today for their efforts in the eventual conviction of 16 individuals and the seizure and forfeiture of more than $30,000 and 10 firearms.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and William J. Ihlenfeld, II, United States Attorney for the Northern District of West Virginia, commended the two-year investigation by law enforcement in Steubenville and Jefferson County, Ohio; Weirton, W. Va. and Chicago, Ill.
The investigation, dubbed “Chicago Boys” due to significant ties between the drug traffickers in the Steubenville area and suppliers and traffickers from the Greater Chicago area, led to the conviction of 16 individuals on federal and state charges related to narcotics trafficking and evidence tampering, as well as the seizure and forfeiture of more than $30,000 and 10 firearms. Leaders of the drug organization ultimately admitted responsibility for distributing as much as 30 kilograms of heroin in the Steubenville area during an approximate two year period.
“Heroin is impacting the lives of Americans in every state, in every region, and from every background and walk of life,” U.S. Attorney Stewart said. “The Steubenville area is no exception to this, which is why cooperative law enforcement efforts such as this one are so needed. The coordination represented by this effort illustrates a serious law enforcement commitment to loosening the grip that heroin has on our communities.”
“Whenever drug traffickers travel to the Ohio Valley from places like Chicago to sell heroin, significant federal resources will be allocated to disrupt and dismantle their operation,” said U.S. Attorney Ihlenfeld. “The convictions and sentences announced today are proof that great results can be achieved by combining intelligence and resources from law enforcement agencies that span multiple jurisdictions. My office in Northern West Virginia will continue to work with Mr. Stewart’s office in Southern Ohio to investigate and prosecute these cases, and in the end the communities that we serve will be safer places to live and raise a family.”
Stewart and Ihlenfeld, joined by officials from the Federal Bureau of Investigation (FBI), United States Marshal Peter Tobin, Cincinnati Field Division, representatives of the Ohio State Highway Patrol, Jefferson County Prosecutor Jane M. Hanlin, Jefferson County Sheriff Fred Abdalla, Steubenville Police Chief Bill McCafferty, Wintersville Police Chief Edward Laman and Toronto Police Chief Randy Henry praised the investigative and prosecutorial efforts of the coalition of agencies, and recognized the Jefferson County Prosecutor’s Office, the Jefferson County Drug Task Force, the Hancock-Brooke-Weirton Drug Task Force, and agents in the Cambridge FBI Office, recognizing their collaboration, professionalism and effectiveness in the investigation.
Convicted of federal charges for conspiracy to possess with intent to distribute heroin were:
Kinlawyed Hendrix, aka “Lo”, 27, Steubenville, Ohio
Calvin D. Bryant Jr., aka “Gunz”, 26, Canton, Ohio
Robert L. Simmons Jr., aka “Chase”, 19, Steubenville, Ohio
Jessie O. Birden, aka “J-Money”, 21, Steubenville, Ohio
Berryon F. Moore, III, aka “Pumpkin”, 25, Steubenville, Ohio
Joseph L. Dennis, 30, aka “JD” Toronto, Ohio
Sean Loveless, 29 aka “Puff” Steubenville, Ohio
Steven James, 36, Chicago, Ill.
Kyle M. Irvin, 30, Chicago, Ill.
Charles H. Thompson, 28, Chicago, Ill.Convicted of state charges related to drug trafficking and tampering with evidence were:
Lavinia Hearon, 29, Chicago, Ill.
Jacari Benson, 30, Weirton, W. Va.
Frederick L. McGowan, 39, Madison WI
Robert Jackson, 32, Steubenville, Ohio
Harry E. Stackhouse, 25, Steubenville, Ohio
Rashann D. Mukes, 28, Steubenville, Ohio
Conspiracy to possess with intent to distribute more than one kilogram of heroin is a federal crime punishable by 10 years to up to life in prison. Possession of a firearm in furtherance of a drug trafficking crime carries a maximum federal sentence of 40 years in prison.U.S. Attorneys Stewart and Ihlenfeld also commended the cooperative efforts of the Ohio State Highway Patrol in the investigation and the U.S. Marshals Service in Ohio and Illinois who participated in the arrests in the case, as well as Assistant United States Attorney Michael Hunter and Special Assistant United States Attorney Jane Hanlin who prosecuted the federal cases.
6 July 2015
Youngstown men indicted for unrelated bank robberiesRead the Press Release
Two Youngstown men were indicted for their roles in unrelated bank robberies in Youngstown, said said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
On or about May 29, 2015, Randy L. Jamison, 40, robbed the Huntington Bank at 23 Federal Plaza East, of approximately $2248, according to the indictment.
On or about February 24, 2015, Jayquawn T. Manigault, 22, robbed the Chase Bank at 2900 Market Street, of approximately $12,997, according to the indictment.
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 record, if any, the defendant’s role in the offense and the 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.
The investigation preceding the both indictments was conducted by the Federal Bureau of Investigation and the Youngstown Police Department. These matters are being prosecuted by Assistant United States Attorney David M. Toepfer.
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.
Youngstown man indicted for four bank robberiesRead the Press Release
A Youngstown man was indicted for four bank robberies that took place earlier this year, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
G. Shannon McColor, 27, was indicted on four counts of bank robbery.
Count one of the indictment alleges that on or about January 9, 2015, McColor robbed the Huntington Bank, Boardman, Ohio.
Count two of the indictment alleges that on or about February 4, 2015, McColor robbed the PNC Bank, Struthers, Ohio.
Count three of the indictment alleges that on or about February 6, 2015, McColor robbed the Fifth Third Bank, Toledo, Ohio.
Count four of the indictment alleges that on or about February 14, 2015, McColor robbed the Chase Bank, Canfield, Ohio.
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 record, if any, the defendant’s role in the offense and the 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.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation, the Boardman Police Department, the Struthers Police Department, the Toledo Police Department and the Canfield Police Department. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
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.
Youngstown man faces firearms, narcotics chargesRead the Press Release
A federal grand jury returned a four-count superseding indictment charging Jeffery C. Howell, aka Jeffrey C. Howell, aka “J”, 34, of Youngstown, Ohio, with possessing with intent to distribute cocaine base (crack); possessing with intent to distribute heroin; and with being a felon in possession of firearms and ammunition, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Count one of the indictment alleges that on or about February 26, 2015, Howell possessed with intent to distribute less than 28 grams of crack cocaine.
Count two of the indictment alleges that on or about February 26, 2015, Howell possessed with intent to distribute less than 100 grams of heroin.
Count three of the indictment alleges that on or about February 26, 2015, Howell possessed a Glock, model 30, .45 caliber semi-automatic pistol and ammunition, after having been convicted of Improper Handling of Firearm in Motor Vehicle (2008); Possession of Cocaine and Having Weapon while Under Disability (2011); and Failure to Comply with Order or Signal of Peace Officer (2011); all in the Mahoning County Court of Common Pleas, Ohio.
Count four of the indictment alleges that on or about May 29, 2015, Howell possessed a Smith and Wesson, model SM40VE, .40 caliber semi-automatic handgun and ammunition, after having been convicted of Improper Handling of Firearm in Motor Vehicle (2008); Possession of Cocaine and Having Weapon while Under Disability (2011); and Failure to Comply with Order or Signal of Peace Officer (2011); all in the Mahoning County Court of Common Pleas, Ohio.
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 record, if any, the defendant’s role in the offense and the 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.
The investigation preceding the indictment was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Liberty Police Department. The matter is being prosecuted by Assistant United States Attorney Jason M. Katz.
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.
West Haven Man Pleads Guilty to Federal Crack Cocaine Trafficking OffenseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ANTHONY SABATO, 57, of West Haven, pleaded guilty today in Hartford federal court to trafficking crack cocaine.
According to court documents and statements made in court, from approximately March 2013 to March 2015, SABATO conspired to distribute crack cocaine. During the investigation of this matter, an undercover officer purchased crack from SABATO and a co-defendant.
SABATO pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 280 grams or more of cocaine base (“crack cocaine”), an offense that that carries a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life. He is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on September 30, 2015.
SABATO has been detained since his arrest on March 24, 2015.
This investigation is being conducted by the FBI’s New Haven Safe Streets Task Force, the West Haven Police Department and the Darien Police Department. The Task Force includes personnel from the FBI, West Haven Police Department, New Haven Police Department, Milford Police Department and Connecticut Department of Correction. The case is being prosecuted by Assistant U.S. Attorney Tracy Lee Dayton.
Two Upshur County residents convicted of methamphetamine traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Arwen Tinuviel Palmer, 35, and Dustin Lynn Phillips, 33, both of Buckhannon, West Virginia, were convicted today of methamphetamine trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Palmer and Phillips each possessed and distributed methamphetamine in Upshur County, West Virginia throughout 2014.
Both defendants pled guilty today to one count of “Possession with Intent to Distribute Methamphetamine – Aiding and Abetting.” They each face up to 20 years in prison and a fine of up to $1,000,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant U.S. Attorney Stephen Warner prosecuted the case on behalf of the government. The Upshur County Sheriff’s Office and the Mountain Region Drug and Violent Crime Task Force led the investigation.
U.S. Magistrate Judge John S. Kaull presided.
Two Louisville Felons Sentenced to Federal Prison for Their Roles in A String of Armed Robberies of Local BusinessesRead the Press Release
LOUISVILLE, Ky. – Two Louisville felons were sentenced today in U.S. District Court by Chief Judge Joseph H. McKinley, to serve prison terms for their roles in a string of armed robberies announced Acting United States Attorney John E. Kuhn, Jr. The federal charges stemmed from “Project Recoil,” the on-going partnership of multiple Jefferson County, Kentucky law enforcement agencies, developed by the U.S. Attorney’s Office for the Western District of Kentucky, to maximize penalties for the most violent offenders and to reduce violent crime in our community.
James Gore, Jr. was sentenced to serve 72 months in prison followed by a 3 year period of supervised release, and Tony Trumbo, Jr. was sentenced to 255 months in prison followed by a 3 year period of supervised release for their roles in the armed robberies of three businesses located in Jefferson County, Kentucky.
Gore was sentenced after pleading guilty to aiding and abetting the obstruction of interstate commerce through robbery of two businesses. Trumbo was sentenced after pleading guilty to aiding and abetting the obstruction of interstate commerce through robbery, attempted robbery of three businesses, and aiding and abetting the discharge of a firearm during a robbery.
According to the plea agreement, Gore admitted to aiding and abetting the robbery of a Thorntons located at 4516 Poplar Level Road, with several other people, on October 30, 2012, and to aiding and abetting the robbery of a Speedway, with several other individuals, located on 3030 Taylor Boulevard on October 31, 2012.
In a separate plea agreement, defendant Trumbo admitted to attempting to rob the Cricket Wireless store, located at 3125 W. Broadway, along with other individuals, on October 23, 2012. Surveillance video taken from the store shows Trumbo along with an accomplice who was brandishing a firearm, attempting to rob the store. Trumbo also admitted to being one of several people to rob the Thorntons located at 4516 Poplar Level Road, on October 30, 2012. Trumbo further admitted to being one of several people to rob the Speedway located at 3030 Taylor Boulevard on October 31, 2012. During the course of that robbery, one of Trumbo’s accomplices shot a Speedway customer in the back causing serious bodily injury.
Co-defendants Jescell Whittle and Dahntel Newsome face separate charges for their alleged roles in the armed robberies and attempted robbery of five Jefferson County businesses.
This case is being prosecuted by Assistant United States Attorney A. Spencer McKiness and is being investigated by the Louisville Metro Police Department.
Three Alleged MS-13 Members Charged in Violent Racketeering ConspiracyRead the Press Release
Greenbelt, Maryland – A federal grand jury returned a superseding indictment today charging the following defendants, all of Maryland, in connection with a conspiracy to participate in a racketeering enterprise known as the La Mara Salvatrucha, or MS-13:
Aldair Garcia-Miranda, a/k/a “Callado” and “Poseido,” age 21, of Wheaton,
Selvin Raymundo Salazar, a/k/a “Little” and “Inquieto,” age 23, of Wheaton, and
Raul Ernesto Landaverde-Giron, a/k/a “Decente” and “Humilde,” age 25, of Silver Spring.
All of the defendants are in custody.
“Transnational criminal gangs inflict violence and fear upon our community,” said Ivan Arvelo, Acting Special Agent in Charge Baltimore, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations. “Enforcement of gang-related crimes is a high priority for our agency. We appreciate opportunities to collaborate with our law enforcement colleagues to bring these violent criminals to justice.”
The superseding indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Ivan Arvelo of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Mark A. Magaw of the Prince George’s County Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; Chief Douglas Holland of the Hyattsville Police Department; Acting Chief Patrick Grossman of the Frederick Police Department; Frederick County State’s Attorney J. Charles Smith; Chief J. Thomas Manger of the Montgomery County Police Department; and Montgomery County State’s Attorney John McCarthy.
MS-13 is a national and international gang composed primarily of immigrants or descendants from El Salvador. Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Prince George’s County and Montgomery County, Maryland, with a presence in Frederick. The defendants were members of the Normandie Clique of MS-13. For a period of time beginning at least in late 2013 or early 2014, Garcia-Miranda and Salazar served as leaders of the Normandie Clique in the area of Prince George’s County and Montgomery County.
The four count indictment alleges that from at least prior to 2012 through 2014, the defendants were members and associates of MS-13 who planned and committed murders, attempted murders and extortion.
More specifically, on February 28, 2013, Salazar and other MS-13 members allegedly shot and killed an individual suspected of being a member of a rival gang.
The indictment further alleges that on November 30, 2013, MS-13 members, including Garcia-Miranda and Landaverde-Giron, armed themselves with knives and a gun in order kill a person who had fled from El Salvador to Frederick, Maryland to escape an order to kill by MS-13 in El Salvador. They lured the victim to a wooded area between Greenwall Place and Hoke Place in Frederick, shot him in the head and stabbed him multiple times, killing him.
According to the indictment, on July 30, 2014, Garcia-Miranda, Salazar and other MS-13 members traveled to the 5700 block of 30th Avenue in Hyattsville, Maryland with guns to search for and shoot suspected rival gang members and others who were believed to have taken property from an MS-13 associate. They arrived at a nearby location where three individuals were walking. Garcia-Miranda and an MS-13 associate, while in the company of Salazar, fired multiple shots from handguns at the three victims, striking one victim seven times and another victim once.
All three defendants face a maximum sentence of life in prison for conspiring to participate in a racketeering enterprise. Garcia-Miranda and Salazar also face a maximum sentence of 10 years in prison for conspiracy to commit murder in aid of racketeering, and for attempted murder in aid of racketeering; and a mandatory minimum of 10 years in prison consecutive to any other sentence and a maximum sentence of life in prison for using a gun to conspire to commit murder in aid of racketeering and attempted murder in aid of racketeering.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the HSI Baltimore, Prince George’s County Police Department, Frederick Police Department, Hyattsville Police Department, Montgomery County Police Department, Prince George’s County State’s Attorney’s Office and its Strategic Investigations Unit, Frederick County State’s Attorney’s Office and Montgomery County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein also recognized the Prince George’s County Sheriff’s Office, Prince George’s County Department of Corrections, HSI Baltimore’s Operation Community Shield Task Force, and the Maryland Department of Corrections Intelligence Unit for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau and Lindsay Eyler Kaplan, who are prosecuting this case.
Texas Man Sentenced for Traveling to Missouri for Illicit Sex with Two ChildrenRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Texas man was sentenced in federal court today for traveling to Missouri to engage in sex with two minor sisters whose “father” (actually an undercover police detective) he met online.
John Paul Christian, 42, of San Marcos, Texas, was sentenced by U.S. District Judge Dean Whipple to 10 years in federal prison without parole.
On Sept. 17, 2014, Christian pleaded guilty to two counts of attempting to entice a minor to engage in sexual activity and to one count of traveling across state lines to engage in illicit sexual conduct.
According to court documents, Christian communicated through an online social media site with a man he believed to be the father of two minor females, ages 11 and 15, on Feb. 19, 2014. The father was actually an undercover Kansas City, Mo., Police Department detective.
Christian called the undercover detective on his cell phone to discuss his interest in having sex with the girls, and sent e-mail and text messages to the undercover detective to arrange a meeting to further discuss this opportunity to have sex with his children. On Feb. 26, 2014, Christian sent a text to the undercover detective stating that he wanted to have sex with the 11-year-old girl first and describing all of the sex acts he desired to perform on and with her. On Feb. 28, 2014, Christian sent a $200 Money Gram to the undercover detective as partial payment of the $400 agreed price for sex with the girls.
On March 1, 2014, Christian traveled from Texas to Missouri, to a location where he believed the man and his daughters lived, with the intent to have sex with the girls as previously arranged. Christian arrived in a taxi at about 8:10 p.m. and was arrested as he got out of the taxi.
When he was taken into custody, Christian was in possession of two bags. According to court documents, one of the bags contained a “Hello Kitty” backpack doll, two “Hello Kitty” underwear outfits for young girls, two pairs of young girls’ panties, two cans of Red Bull, rope necklaces, Q-Tips and a teal iPod Nano with headphones. The other bag contained an Acer Chromebook laptop computer with power cables, a Samsung flip phone, and a bottle of Astroglide lubricant.
When officers searched Christian’s hotel room, according to court documents, they found a notebook with what appears to be a letter written to the 15-year-old daughter. The letter details the various sex acts that Christian was going to be engaged in with the sisters. Christian wrote that he wanted to get the 15-year-old girl pregnant so that they could have a “little baby girl together” that they in turn would sexually molest.
This case was prosecuted by Assistant U.S. Attorney Catherine A. Connelly. It was investigated by the Kansas City, Mo., Police Department in conjunction with the Human Trafficking Rescue Project.
Sunnyside Man Sentenced to Concurrent 10 Year Prison Terms for Drug Trafficking and Being an Illegal Alien in Possession of AmmunitionRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Omar Alarcon Fuentes, 37, of Sunnyside, Washington, was sentenced today after having been convicted after a one-day jury trial in December 2014 of one count of distributing 50 grams or more of pure methamphetamine, and pleading guilty on March 19, 2015, to being an illegal alien in possession of ammunition. In the methamphetamine case, United States District Court Judge Thomas O. Rice sentenced Fuentes to a 10-year term of imprisonment and a 5-year term of court supervision following release from federal prison. The Court also ordered Fuentes to pay $4,000 in restitution to the United States Drug Enforcement Administration. In the ammunition case, Judge Rice sentenced Fuentes to a 10-year term of imprisonment to run concurrent to the sentence imposed in the methamphetamine case, followed by a 3-year term of court supervision following release from federal prison. Fuentes has been in custody since his arrest on July 25, 2013.
According to information disclosed during court proceedings, on July 18, 2013, using a confidential informant, the U.S. Drug Enforcement Administration (DEA) and Spokane Regional Drug Task Force (SRDTF) conducted a controlled buy of four ounces of methamphetamine from Henry Patrick Bevans, III, at a hotel on North Division. When the confidential informant arrived at Bevans’ room to buy four ounces, he gave Bevans $4,000 in buy money provided by DEA. However, Bevans did not have the drugs to distribute, indicating he was waiting for his supplier to arrive. While maintaining surveillance outside the hotel, DEA special agents SRDTF officers observed Fuentes driving a minivan into the hotel’s rear parking lot. Shortly afterward, DEA and SRDTF units observed Bevans exit the back of the hotel and enter Fuentes’ minivan. Surveillance units observed Fuentes drive Bevans from the hotel’s rear parking lot to the front entrance. Bevans exited Fuentes’ minivan and went inside the hotel. In the meantime, the confidential informant was waiting in Bevans’ hotel room. Upon returning to his hotel room, Bevans distributed four ounces of methamphetamine that he had received from Fuentes in the parking lot. After leaving the hotel room, the confidential informant turned over the suspected methamphetamine to DEA. DEA laboratory testing confirmed that the substance Fuentes distributed to Bevans who in turn distributed it the confidential informant was 119 grams of pure methamphetamine. Surveillance units followed Fuentes to his residence in Sunnyside, Washington.
On July 24, 2013, SRDTF obtained a State warrant to search Fuentes’ residence. During execution of the warrant, a Spokane County Sheriff’s Office detective found 16 loose rounds of .45 caliber ammunition and a Mexican permanent resident identification card in the name of “Omar Fuentes” in a drawer in the master bedroom. The ammunition was photographed and seized. Fuentes, a citizen and national of Mexico, had been arrested and deported from the United States in 2009, but had illegally reentered the United States.
After previously pleading guilty to two counts of distributing 50 grams or more of pure methamphetamine, Henry Patrick Bevans, III, was sentenced in April 2014 by Senior District Court Judge Fred Van Sickle to a 10-year term of imprisonment followed by 10 years of court supervision and was ordered to pay $8,000 restitution to DEA.
Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington, said, “The sentence imposed in this case reflects the seriousness of drug trafficking and firearm-related crimes. This case is yet another example of the commitment of the United States Attorney’s Office to prosecute aggressively drug and firearm-related cases in the Eastern District of Washington. The United States Drug Enforcement Administration, Spokane Regional Drug Task Force and Spokane County Sheriff’s Office are commended for its tireless efforts in thoroughly investigating this case.”
The investigation was conducted by the United States Drug Enforcement Administration, Spokane Regional Drug Task Force and Spokane County Sheriff’s Office. The case was prosecuted by George J.C. Jacobs, III, Assistant United States Attorney for the Eastern District of Washington.
Settlements Announced with Two Pharmaceutical Companies Regarding the Medicaid Drug Rebate ProgramRead the Press Release
PHILADELPHIA – AstraZeneca LP has agreed to pay the United States and participating states a total of $46.5 million, plus interest, to resolve allegations that it knowingly underpaid rebates owed under the Medicaid Drug Rebate Program, the Justice Department announced today. Of that amount, AstraZeneca will pay roughly $26.7 million, plus interest, to the United States, and the remainder to states participating in the settlement.
In a separate settlement arising out of the same case, Cephalon Inc. has agreed to pay the United States and participating states a total of $7.5 million, plus interest, to resolve similar allegations. Of that amount, Cephalon will pay roughly $4.3 million, plus interest, to the United States, and the remainder to states participating in the settlement.
Pursuant to the Medicaid Drug Rebate Program, drug manufacturers are required to pay quarterly rebates to state Medicaid programs in exchange for Medicaid’s coverage of the manufacturers’ drugs. The quarterly rebates are based, in part, on the Average Manufacturer Prices (AMPs) that the manufacturers report to the government for each of their covered drugs. Generally, the higher the reported AMP for a drug, the greater the rebate the manufacturer pays to state Medicaid programs for the drug. These settlements resolve allegations that AstraZeneca and Cephalon underreported AMPs for a number of their drugs by improperly reducing the reported AMPs for service fees they paid to wholesalers. As a result, the government contends that AstraZeneca and Cephalon underpaid quarterly rebates owed to the states and caused the United States to be overcharged for its payments to the states for the Medicaid program.
The two settlements partially resolve a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The amounts to be received by the whistleblower in this suit, Ronald J. Streck, a pharmacist, have not yet been determined.
“We will continue to police the pharmaceutical industry when the Medicaid program overpays for drugs,” said First Assistant U.S. Attorney Louis D. Lappen of the Eastern District of Pennsylvania. “As these settlements demonstrate, it is critical for pharmaceutical manufacturers to comply with requirements of programs such as the Medicaid Drug Rebate Program to ensure that the government and the taxpayers are treated fairly in the reimbursement process.”
“The Medicaid Drug Rebate Program relies on drug manufacturers reporting accurate pricing information used in the rebate calculations,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, the head of the Justice Department’s Civil Division. “These settlements demonstrate the Department of Justice’s commitment to ensuring that state Medicaid programs receive the full amount of rebates from manufacturers that Congress intended.”
The settlement with AstraZeneca LP and Cephalon Inc. was the result of a coordinated effort among the U.S. Attorney’s Office of the Eastern District of Pennsylvania, the Civil Division’s Commercial Litigation Branch, and Health and Human Services-Office of Inspector General.
These settlements illustrate the government’s emphasis on combating health care fraud and mark 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 $24.8 billion through False Claims Act cases, with more than $15.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The lawsuit is captioned United States ex rel. Streck v. Allergan, Inc., et al., Case No. 08-cv-5135 (E.D. Pa.). The claims settled by these agreements are allegations only, and there have been no determinations of liability.
Pine Lawn Mayor Sentenced on Extortion ChargesRead the Press Release
St. Louis, MO – The mayor of Pine Lawn, Missouri, SYLVESTER CALDWELL, was sentenced to 33 months in prison on charges involving the extortion of cash payments from the owner of a local towing company and from the owner of a Pine Lawn convenience store. In addition to the prison sentence, he was also ordered to pay $5,500 restitution.
According to court documents, from December 2013 through April 2014, FBI agents were conducting an ongoing public corruption investigation into the activities of Sylvester Caldwell, who was Mayor of the City of Pine Lawn. As Mayor, he exercised authority and control over which towing company provided the primary towing service for the City. During the public corruption investigation, the owner of a towing company, who was cooperating with the FBI, met with Mayor Caldwell on several occasions for the purpose of making cash payments to the Mayor in order to remain as the primary towing service for Pine Lawn.
On at least five occasions, Mayor Caldwell met with the tow company owner at various locations and accepted cash payments in exchange for continuing to give work to the towing company. At times Mayor Caldwell used coded language when requesting the cash payments. For example, he commanded the tow company owner to place “green Mountain Dew in a cup,” which was code for directing that the cash be placed in a disposable cup. He also induced payments by threatening to use a competing towing company.
From at least February 2013 through September 2014, Mayor Caldwell also extorted numerous payments of money from the owner of a convenience store known as Pine Lawn Market. He attempted to disguise the payments as donations to the City of Pine Lawn. The owner paid the money to Mayor Caldwell out of fear that the Mayor would make trouble for the store. The owner of the store also allowed him to take goods from the store out of fear that his business could suffer economic harm if he refused.
Caldwell, Florissant, Missouri, pled guilty in April before United States District Judge Catherine D. Perry to one count of attempted extortion and one count of extortion.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorneys Reginald Harris and Anthony Franks handled the case for the U.S. Attorney’s Office.
Pharmacist Sentenced to More Than Eight Years in Federal PrisonRead the Press Release
Tampa, Florida – U.S. District Judge Elizabeth A. Kovachevich has sentenced Brian C. Weiler (56, Melbourne) to eight years and one month in federal prison for conspiracy to distribute and dispense oxycodone not in the usual course of professional practice. The Court also ordered him to forfeit his Florida pharmacist license and imposed a forfeiture money judgment in the amount of $274,400.
Weiler was found guilty by a federal jury on December 12, 2014.
According to evidence presented at trial, from February 2010 through May 2011, Weiler worked at two Tampa pharmacies, VIP Pharmacy on Martin Luther King, Jr. Boulevard; and New Tampa Pharmacy on Waters Avenue. During that time, he filled hundreds of prescriptions for very large doses of oxycodone. The recipients included drug addicts and members of doctor shopping organizations who traveled from Ohio, Kentucky, and Tennessee. Owners and operators of the VIP Pharmacy and New Tampa Pharmacy have previously been convicted of federal conspiracy charges.
This case was investigated by a joint task force including the Drug Enforcement Administration, the Pasco County Sheriff's Office, and the Temple Terrace Police Department. It was prosecuted by Assistant United States Attorney Maria Chapa Lopez.
Ottawa County Business Owner Sentenced for Clean Water Act ViolationsRead the Press Release
TOPEKA, KAN. - The owner of a metal plating company in Minneapolis, Kan., was sentenced Monday to four months in federal prison followed by six months home confinement for violating the federal Clean Water Act. His company was fined $10,000. In addition, he and his company were ordered to pay $281,503 in restitution.
Kevin L. Cline, 56, Minneapolis, Kan., owner of C & R Plating, pleaded guilty to one count of violating the federal law that regulates discharges into America’s creeks and rivers. The company pleaded guilty to the same count.
In his plea, Cline admitted he was responsible for high levels of zinc found in a sewer system operated by the City of Minneapolis, Kan. Beginning in 2007, Cline submitted false and fraudulent samples and reports to the Kansas Department of Health and Environment to conceal the fact that untreated waste water from C & R Plating was being delivered to the Minneapolis sewer system. The water came from spent chemical baths used in treating metals. The city sewer system discharges into the Solomon River via Lindsey Creek and an unnamed tributary.
Grissom commended the Environmental Protection Agency and Assistant U.S. Attorney Richard Hathaway for their work on the case.
Ohio Man Who Sold Synthetic Urine on the Internet Sentenced to Probation with Home DetentionRead the Press Release
PITTSBURGH – An Ohio resident has been sentenced in federal court to five years’ probation with six months’ home detention and ordered to pay a fine of $7,500 on his conviction of one count of conspiracy to defraud the United States and one count of introduction of misbranded drugs into interstate commerce, United States Attorney David J. Hickton announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on David Neal, 62, of Middletown, Ohio.
According to information presented to the court, Neal is the owner ACS Herbal Tea Company, a national Internet business located in Middletown, Ohio. Neal, using ACS Herbal Tea Company and the Internet websites www.123zip.com and www.passthetest.com, conspired to defraud the Substance Abuse and Mental Health Services Administration (SAMHSA) of the United States Department of Health and Human Services by obstructing and interfering with the lawful governmental functions of SAMHSA in overseeing, monitoring and establishing scientific and technical guidelines for federal workplace drug testing programs, and standards for certification of laboratories engaged in urine drug testing for federal agencies and federally-regulated industries, under the Federal Agency Drug-Free Work Place Program. For the past eight years, through the Internet websites www.123zip.com and www.passthetest.com, Neal sold, in interstate commerce, products such as the “Magnum Unisex Synthetic Urine-Never Fail a Urine Drug Test” and “Urine Luck” to customers who intended to use the products for the purpose of defeating federal, and federally regulated, employment drug urine tests overseen by SAMHSA. Additionally, some of the products sold through Neal’s websites were drugs, as defined by the Food and Drug Administration, but did not bear appropriate labeling.
“Federally mandated drug testing of transportation workers ¬¬¬is in place to ensure public safety; criminals who enrich themselves by distributing products designed to circumvent and defeat such testing endanger those who rely on transportation workers for safe passage; they also risk the health of the workers who take a product of unknown safety and efficacy,” said Antoinette V. Henry, Special Agent in Charge, FDA Office of Criminal Investigations’ Metro Washington Field Office. “We will continue to protect the public health by bringing to justice criminals who distribute products that are designed only to defeat consumer safety.”
Judge Conti stated that the seriousness of the offense, when considering the public safety concerns implicated, supported the imposition of a guideline sentence.
Assistant United States Attorney Tonya Sulia Goodman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service, Criminal Investigation Division along with the Federal Bureau of Investigation and the Food and Drug Administration, Office of Criminal Investigations for the investigation leading to the successful prosecution of Neal.
New Hampshire Man Pleads Guilty to Firearms ChargesRead the Press Release
CONCORD, N.H. – Nickolas Oliva, 27, of Dover, New Hampshire, pleaded guilty in United States District Court for the District of New Hampshire to being an unlawful user in possession of a firearm and possession of stolen firearms, announced Acting United States Attorney Donald Feith.
On December 20, 2013, the Dover Police Department learned that several of Oliva’s grandfather’s firearms were missing. A subsequent investigation revealed that the defendant had taken several firearms, without the permission of his grandfather and sold the firearms to third parties. Upon speaking with law enforcement, the defendant subsequently admitted that he took the guns from his grandfather's safe, without his permission, and sold them. The defendant further admitted that he had an addiction to narcotics and that he sold the guns to get money for drugs. Agents from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) were able to recover many of the firearms.
"The federal firearms laws are designed to ensure that firearms do not fall into the hands of those prohibited from having them," stated Acting United States Attorney Don Feith. "We will continue to investigate and prosecute those individuals who violate the firearms laws by delivering weapons to prohibited persons. I want to congratulate the ATF for its excellent work in this case.”
Oliva faces a maximum sentence of ten years imprisonment. Oliva is scheduled to be sentenced on November 2, 2015. Oliva was released pending sentencing.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Dover Police Department and is being prosecuted by Assistant U.S. Attorney Debra M. Walsh.
Neosho Man Convicted of Illegal FirearmsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Neosho, Mo., man has been convicted in federal court of illegally possessing firearms.
Louis Anthony Hardison, also known as Mohammad L. Carrol, 54, of Neosho, was found guilty on July 2, 2015, of being a felon in possession of two firearms, in an order by U.S. District Judge M. Douglas Harpool, following a bench trial on June 15, 2015.
Hardison was in possession of an Intratec 9mm pistol (along with 140 rounds of ammunition) and a Cobray Derringer .45-caliber pistol (along with two rounds of ammunition) on Nov. 27, 2013.
According to court documents, a 911 dispatcher received a desperate call for assistance at about 4 a.m. on Nov. 27, 2013. The caller reported that someone had a gun and knives and told the dispatcher, “I will be . . . dead before you get all this information . . . he got a butcher knife to my . . . neck and he got a gun.”
When Neosho police officers arrived at the residence, they found the caller standing near her vehicle parked on the roadside in front of Hardison’s residence. Hardison was standing near the front door of the residence. The officer noticed that Hardison smelled of intoxicants and his speech was slurred.
Another police officer, who arrived a few minutes later, asked Hardison about the gun. Hardison pointed to a green duffel bag on the floor in the hallway. Inside the bag, the officer found a Tech 9 Intratec 9mm handgun. The gun had a magazine in it, and there were four other magazines in the duffel bag.
A police officer, who had been informed by the victim that Hardison had a Derringer, told Hardison he was sure there were other weapons in the residence. Hardison then told the officer he had another handgun in the bedroom. Hardison escorted the police officer to the bedroom and told him that the gun was in the ductwork. The officer removed the ductwork and located the derringer two-shot pistol.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Hardison has two prior felony convictions for forgery and prior felony convictions for escape, grand theft auto and non-sufficient funds.
Under federal statutes, Hardison is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull II. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Missouri State Highway Patrol and the Neosho, Mo., Police Department.
Moore County, Texas, Man Pleads Guilty to Federal Obscenity OffenseRead the Press Release
AMARILLO, Texas — Bassam Arif Al Zarkani, 33, of Dumas, Texas, appeared today before U.S. District Judge Mary Lou Robinson and pleaded guilty to one count of attempted transfer of obscene material to a minor, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
Al Zarkani, who has been in custody since his arrest on a related state charge in April 2015, faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. A sentencing date was not set.
According to documents filed in the case, on approximately April 14, 2015, Al Zarkani sent a “friend request” to an undercover officer’s Facebook account, and the undercover officer accepted that friend request. Al Zarkani and the undercover officer exchanged messages and in response to Al Zarkani’s inquiry, the undercover officer responded, “single…no kids thank god…im 15.”
The conversation turned sexual in nature and Al Zarkani sent the undercover officer a sexually explicit photo of himself, and for almost two weeks, Al Zarkani and the undercover officer, whom Al Zarkani believed was a 15-year-old female, sent private messages to each other through Facebook. During the conversations, Al Zarkani warned the undercover officer to keep him a secret from her dad and not tell anyone about him until she is 18 years old. On April 28, 2015, a meeting site was established, and Al Zarkani traveled from Dumas to Amarillo, Texas, to meet the girl. He was arrested when he arrived at the meeting location
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Amarillo Police Department investigated. Assistant U.S. Attorney Joshua Frausto is in charge of the prosecution.
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Monticello Man Sentenced to over 10 Years for Attempted Enticement of a MinorRead the Press Release
A man who attempted to entice a minor to engage in sexual activity was sentenced July 2, 2015 to over 10 years in federal prison.
Colton Rickels, age 20, of Monticello, Iowa, received the sentence after an April 20, 2015 guilty plea to one count of attempted enticement of a minor. At the guilty plea hearing, Rickels admitted that, in October 2014, he used the Internet to attempt to persuade, induce, entice, or coerce a 12-year-old girl to engage in sexual activity. At the sentencing hearing, the court also discussed defendant’s repeated sex acts with another 12-year-old girl and his inappropriate contact with a 13-year-old girl.
Rickels was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Rickels was sentenced to 121 months’ imprisonment. A special assessment of $100 was imposed, and he must also serve a 10-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Iowa Division of Criminal Investigation, the Monticello Police Department, and the Cedar Rapids Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 15-20.
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Massachusetts Man Sentenced on Firearm ChargeRead the Press Release
CONCORD, N.H. – Jason Martinez, 20, of Methuen, Massachusetts, was sentenced today in the United States District Court for the District of New Hampshire to 48 months imprisonment after pleading guilty to conspiracy to make a false statement during the acquisition of a firearm, announced Acting United States Attorney Donald Feith. Upon his release, Martinez will be placed on three years of supervised release which is monitored by the United States Probation and Pretrial Services Office.
Beginning in August 2014, agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives in Boston were involved in an investigation of the illegal purchase and sale of firearms. During the investigation, ATF agents utilized an informant (CI-1) to purchase firearms from Martinez.
Martinez and others solicited a co-conspirator to purchase firearms because the co-conspirator possessed a New Hampshire identification and could provide that identification to the federal firearms licensee making the sale. Using money provided by Martinez, the co-conspirator purchased, on four separate occasions between October 31, 2014 through November 8, 2014, nine firearms for Martinez and others. On November 26, 2014, the co-conspirator attempted to purchase, with money provided by Martinez, three additional firearms but was denied because ATF was alerted to the purchase. During each of the firearm purchases, the co-conspirator falsely claimed that he was the actual purchaser of the firearms when in reality he was purchasing the firearms for Martinez and others.
“This case is a classic example of the results that can be obtained when good investigative work is coupled with aggressive prosecution,” stated Acting U.S. Attorney Donald Feith. “By refusing to be satisfied with investigating only the purchaser of these firearms, the ATFE was able to identify and arrest the defendant, who was the money man selling on the street the guns he illegally obtained. Our office is committed to pursuing these “lie and buy” cases to identify and prosecute those who would trade in the illegal transfer of firearms.”
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and was prosecuted by Assistant U.S. Attorney Debra M. Walsh.
Mansfield Man Charged with Threatening President ObamaRead the Press Release
BOSTON – A Mansfield man was charged in U.S. District Court in Boston with posting on-line threats to the President of the United States.
Andrew J. O’Keefe, 28, was charged on June 15, 2015, in a criminal complaint that was unsealed today with posting an online threat to the President of the United States. He is scheduled to appear before U.S. District Court Magistrate Judge Donald L. Cabell at 11:15 a.m. this morning.
According to court documents, on May 13, 2015, an individual, later determined to be O’Keefe, posted a threat on an FBI website stating that he planned on killing President Barack Obama. On May 15, 2015, law enforcement officers attempted to interview O’Keefe regarding the posting; however, O’Keefe refused to speak with officers outside his residence. A search warrant executed on O’Keefe’s residence and vehicle recovered over 100 weapons including swords, double-edged knives, hatchets, spears, an air gun, and two laptop computers.
The charging statute provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Lisa A. Quinn, Special Agent in Charge of the U.S. Secret Service; and Mansfield Police Chief Ronald A. Sellon, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crime Unit.
LB&B Associates Inc. Agrees to Pay $7.8 Million for Alleged False Claims Related to Small Business Administration Set Aside ContractsRead the Press Release
LB&B Associates Inc. and its principals, Lily A. Brandon and F. Edward Brandon, have agreed to pay the government $7.8 million to resolve allegations that they made false statements to obtain contracts through the Small Business Administration’s (SBA’s) 8(a) Business Development Program for Small Disadvantaged Businesses, the Justice Department announced today. LB&B is a North Carolina corporation headquartered in Columbia, Maryland.
“The purpose of the 8(a) Program is to assist small disadvantaged businesses to compete in the American economy,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “The Justice Department is committed to making sure that those who participate in 8(a) contracts do so honestly and fairly.”
“The basic purpose of this federal program is undermined when contractors falsely claim to be a small or disadvantaged business,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia. “This $7.8 million settlement demonstrates our commitment to protecting the integrity of this important program. Working with relators and federal investigators, we will do all that we can to act against those who illegitimately bill the American taxpayers.”
The government alleged that in seeking certification under SBA’s 8(a) Program, LB&B falsely represented that Lily Brandon – who satisfied the criteria for a socially and economically disadvantaged person under the program – controlled the operations of LB&B, when she did not. Securing 8(a) certification allowed LB&B to obtain 8(a) set aside contracts from various government agencies. Throughout the performance of these contracts, Lily Brandon allegedly failed to exercise actual control over LB&B’s operations, a key component to qualifying for the set aside contracts.
“This case shows the lengths we will go to protect the integrity of SBA’s 8(a) program,” said General Counsel Melvin F. Williams Jr. of the SBA. “Both the Justice Department and SBA are prepared to do what it takes to make certain that the program helps folks who are really disadvantaged, and for whom it is intended to assist.”
The civil settlement resolves a lawsuit filed by Steven O. Sansbury and James T. Buechler, former employees of LB&B, under the whistleblower provision of the False Claims Act, which permits private parties, known as relators, to file suit on behalf of the government for false claims and to share in any recovery. The act permits the government either to intervene in and take over the whistleblowers’ suit, or to allow the whistleblowers to pursue the action. In addition to alleging LB&B’s improper receipt of 8(a) set aside contracts, Mr. Sansbury and Mr. Buechler alleged that LB&B made false claims in connection with contracts it obtained pursuant to the SBA’s Mentor-Protégé Program, which allows participants to obtain set aside contracts following LB&B’s graduation from the 8(a) Program. The United States intervened in the whistleblowers’ 8(a) claims but not the Mentor-Protégé claims. The settlement resolves both claims, and Mr. Sansbury and Mr. Buechler will recover a total of $1.5 million of the settlement.
The settlement with LB&B was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the District of Columbia, the SBA’s Office of Inspector General and SBA’s Office of General Counsel.
The civil lawsuit was filed in the District of Columbia and is captioned United States ex rel. Sansbury, et al. v. LB&B Associates, Inc., et al., No. 07-cv-00251 (D. D.C.).
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
LB&B Associates Inc. Agrees to Pay $7.8 Million for Alleged False Claims Related to Small Business Administration Set Aside ContractsRead the Press Release
WASHINGTON – LB&B Associates Inc. and its principals, Lily A. Brandon and F. Edward Brandon, have agreed to pay the government $7.8 million to resolve allegations that they made false statements to obtain contracts through the Small Business Administration’s (SBA’s) 8(a) Business Development Program for Small Disadvantaged Businesses, the Justice Department announced today. LB&B is a North Carolina corporation headquartered in Columbia, Maryland.
“The basic purpose of this federal program is undermined when contractors falsely claim to be a small or disadvantaged business,” said Acting U.S. Attorney Vincent H. Cohen, Jr. “This $7.8 million settlement demonstrates our commitment to protecting the integrity of this important program. Working with relators and federal investigators, we will do all that we can to act against those who illegitimately bill the American taxpayers.”
“The purpose of the 8(a) Program is to assist small disadvantaged businesses to compete in the American economy,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “The Justice Department is committed to making sure that those who participate in 8(a) contracts do so honestly and fairly.”
The government alleged that in seeking certification under SBA’s 8(a) Program, LB&B falsely represented that Lily Brandon – who satisfied the criteria for a socially and economically disadvantaged person under the program – controlled the operations of LB&B, when she did not. Securing 8(a) certification allowed LB&B to obtain 8(a) set aside contracts from various government agencies. Throughout the performance of these contracts, Lily Brandon allegedly failed to exercise actual control over LB&B’s operations, a key component to qualifying for the set aside contracts.
“This case shows the lengths we will go to protect the integrity of SBA’s 8(a) program,” said General Counsel Melvin F. Williams Jr. of the SBA. “Both the Justice Department and SBA are prepared to do what it takes to make certain that the program helps folks who are really disadvantaged, and for whom it is intended to assist."
The civil settlement resolves a lawsuit filed by Steven O. Sansbury and James T. Buechler, former employees of LB&B, under the whistleblower provision of the False Claims Act, which permits private parties, known as relators, to file suit on behalf of the government for false claims and to share in any recovery. The act permits the government either to intervene in and take over the whistleblowers’ suit, or to allow the whistleblowers to pursue the action. In addition to alleging LB&B’s improper receipt of 8(a) set aside contracts, Mr. Sansbury and Mr. Buechler alleged that LB&B made false claims in connection with contracts it obtained pursuant to the SBA’s Mentor-Protégé Program, which allows participants to obtain set aside contracts following LB&B’s graduation from the 8(a) Program. The United States intervened in the whistleblowers’ 8(a) claims but not the Mentor-Protégé claims. The settlement resolves both claims, and Mr. Sansbury and Mr. Buechler will recover a total of $1.5 million of the settlement.
The settlement with LB&B was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the District of Columbia, the SBA’s Office of Inspector General and SBA’s Office of General Counsel.
The civil lawsuit was filed in the District of Columbia and is captioned United States ex rel. Sansbury, et al. v. LB&B Associates, Inc., et al., No. 07-cv-00251 (D. D.C.).
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Janitor Employed by Las Cruces Elementary School Arrested on Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE – David Anaya Garcia, 31, of Las Cruces, N.M., was arrested on July 2, 2015, on federal child pornography charges. Garcia made his initial appearance in federal court earlier today. He remains in custody pending a preliminary hearing and detention hearing, both of which currently are scheduled for later this week.
The criminal complaint charges Garcia with distribution of child pornography and possession of child pornography. According to the complaint, HSI initiated the federal investigation leading to Garcia’s arrest on June 30, 2015, after the New Mexico Attorney General’s Office reported that an investigation by the New Mexico Internet Crimes Against Children (ICAC) Task Force revealed that an IP Address subscribed to Garcia’s residential address in Las Cruces was being used to download images consistent with child pornography. The Las Cruces Police Department and HSI arrested Garcia and executed a federal search warrant at his residence on July 1, 2015.
If convicted on the distribution charge, Garcia faces a prison sentence of not less than five years and not more than 20 years. If convicted on the possession charge, Garcia faces a federal prison term of up to ten years. Garcia also would be required to register as a sex offender. Charges in criminal complaints are merely accusations and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Las Cruces office of HSI, the Las Cruces Police Department, the New Mexico Attorney General’s Office, the New Mexico ICAC Task Force and the New Mexico Regional Computer Forensic Laboratory. The case is being prosecuted by Assistant U.S. Attorney Alexander Shapiro of the U.S. Attorney’s Las Cruces Branch Office as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are [82] federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the NMAGO. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Illegal Commercial Driver License Conspiracy ExposedRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Ellariy Medvednik (48, Oviedo), Natalia Dontsova (49, Oviedo), Adrian Salari (44, Orlando), and Clarence Davis (76, Winter Garden) with conspiracy to aid and abet the unlawful production of Florida driver licenses and commercial driver licenses (“CDLs”). If convicted on all counts, each defendant faces a maximum penalty of 30 years in federal prison.
According to the indictment, Medvednik, Dontsova, and Salari were affiliated with Larex, Inc., a commercial truck driving school. Larex marketed itself to Russian speakers online. Individuals residing out-of-state seeking Florida CDLs would contact Medvednik to arrange for Larex’s services at the cost of approximately $2,000. Those individuals would then travel to Florida to obtain their CDLs with the intention of returning to their home states immediately afterward. However, to obtain a Florida CDL, an individual must first possess a Florida driver license. The State of Florida restricts its driver licenses and CDLs to Florida residents. Medvednik, Dontsova, and Salari conspired to provide false documentation that the individuals resided with them, so that the individuals could obtain Florida driver licenses.
After providing the false residency certifications, Larex assisted the students with the additional requirements for obtaining a CDL. First, Dontsova, using covert communication equipment, provided answers to the students during the written portion of the CDL exam, the successful completion of which led to the issuance of a commercial learner’s permit. Second, Larex hired Davis, a third-party tester authorized by the State of Florida, to administer vehicle inspection tests, basic control skills tests, and road tests. Davis routinely passed and certified students who should have failed based on their test performance. As a result of Davis’s certifications, the individuals were able to obtain Florida CDLs. In return, Davis received from Medvednik approximately $75 per student above his posted rate. At least 600 individuals have been identified as utilizing Larex’s services with Davis as the third-party tester.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the U.S. Department of Transportation’s Office of Inspector General, the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the Florida Highway Patrol. It will be prosecuted by Assistant United States Attorney Embry J. Kidd.